The Future of Europe: Democracy, Legitimacy and Justice After the Euro Crisis 1783481145, 9781783481149

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The Future of Europe

Future Perfect: Images of the Time to Come in Philosophy, Politics and Cultural Studies Series editors: Michael Marder, IKERBASQUE Research Professor of Philosophy, University of the Basque Country, Spain, and Patricia Vieira, Associate Professor, Spanish and Portuguese, Georgetown University, USA

The Future Perfect series stands at the intersection of critical historiography, philosophy, political science, heterodox economic theory, and environmental thought, as well as utopian and cultural studies. It encourages an interdisciplinary re-assessment of the idea of futurity that not only holds a promising interpretative potential but may also serve as an effective tool for practical interventions in the fields of human activity that affect entire countries, regions, and the planet as a whole. Titles in the Series The Future of Europe, edited by Serge Champeau, Carlos Closa, Daniel Innerarity and Miguel Poiares Maduro

The Future of Europe Democracy, Legitimacy and Justice After the Euro Crisis Edited by Serge Champeau, Carlos Closa, Daniel Innerarity, and Miguel Poiares Maduro

London • New York

Published by Rowman & Littlefield International, Ltd. Unit A, Whitacre Mews, 26-34 Stannary Street, London SE11 4AB www.rowmaninternational.com Rowman & Littlefield International, Ltd. is an affiliate of Rowman & Littlefield 4501 Forbes Boulevard, Suite 200, Lanham, Maryland 20706, USA With additional offices in Boulder, New York, Toronto (Canada), and Plymouth (UK) www.rowman.com Copyright © 2015 by Serge Champeau, Carlos Closa, Daniel Innerarity, and Miguel Poiares Maduro and contributors All rights reserved. No part of this book may be reproduced in any form or by any electronic or mechanical means, including information storage and retrieval systems, without written permission from the publisher, except by a reviewer who may quote passages in a review. British Library Cataloguing in Publication Information Available A catalogue record for this book is available from the British Library ISBN: HB 978-1-78348-112-5 ISBN: PB 978-1-78348-113-2 Library of Congress Cataloging-in-Publication Data The future of Europe : democracy, legitimacy and justice after the Euro crisis / edited by Serge Champeau, Carlos Closa, Daniel Innerarity and Miguel Poiares Maduro. pages cm. Includes bibliographical references and index. ISBN 978-1-78348-112-5 (cloth : alk. paper) — ISBN 978-1-78348-113-2 (pbk. : alk. paper) — ISBN 978-1-78348-114-9 (ebook : alk. paper) 1. European Union countries—Economic conditions—21st century. 2. European Union countries— Economic policy—21st century. 3. Financial crises—European Union countries—History—21st century. 4. Eurozone. 5. Social justice—European Union countries. 6. European Union countries— Politics and government—21st century. 7. Political stability European Union countries. 8. Democracy—European Union countries. I. Champeau, Serge, 1950– HC240.F87 2015 330.94—dc23 2014026375 TM The paper used in this publication meets the minimum requirements of American National Standard for Information Sciences Permanence of Paper for Printed Library Materials, ANSI/NISO Z39.48-1992.

Printed in the United States of America

Contents

Preface Introduction Serge Champeau

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The Euro Crisis and Its Constitutional Implications Sergio Fabbrini 2 The Transformation of Macroeconomic and Fiscal Governance in the EU Carlos Closa 3 The Current European Crises: The End of Pluralism? Joxerramon Bengoetxea 4 Is There a Guardian of Constitutionalism in the European Union? Christian Joerges 5 Carl Schmitt and the Deconstitution of Europe Michael Marder 6 A Hidden Asset in Times of Crisis: The EU’s Unbound Constitutional Quality Antje Wiener 7 Europe’s Nemesis?: European Integration and Contradictions of Capitalism and Democracy Gerard Delanty 8 Double Trust: Creditors’ and People’s Confidence in the Euro Crisis Jenny Preunkert 9 What Must Be Democratized?: The European Union as a Complex Democracy Daniel Innerarity 10 Populist Movements and the European Union Serge Champeau 11 Legitimacy in a Neomedieval (Postcrisis) Europe Jan Zielonka 12 The Euro Crisis and Institutional Reform in the EU Miguel Poiares Maduro v

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13 About the Democratic Governance of the Euro: How the Crisis Is Changing Europe Josep Borrell 14 The Eurozone Crisis in Light of the EU’s Normativity Erik O. Eriksen 15 Beyond the Markets: Citizen Participation and Social Progress for a More Popular and Inclusive Europe Beatriz Pérez de las Heras Index Contributors

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Preface

This book stems from a workshop on “Europe after the Euro Crisis: Legitimacy, Democracy, and Justice” that took place in Bilbao, Spain, on September 2 and 3 of 2013. It was organized by three academic institutions whose research agendas include the future of the European Union: the Institute for Democratic Governance at the University of the Basque Country (Globernance), the Global Governance Programme at the European University Institute of Florence, and the Institute for Public Goods and Policies (Consejo Superior de Investigaciones Científicas, Madrid). The rationale for the conference was the situation that is seriously affecting the current process of European integration. The EU has responded to the financial and fiscal crisis that began in 2008 with a number of policy instruments (from the Six Pack to the Fiscal Compact) that have afforded some relief to some of the Union’s most immediate problems. However, important issues remain unaddressed and, more importantly, the crisis seems far from being definitively resolved. Moreover, deep concerns and issues regarding the meaning of the EU and integration now trouble public perception in many member states, provoking a sceptical attitude not previously encountered. Challenges range from concern about the disintegration of the euro to the difficulties of generalising differentiated integration, but without a doubt, they converge around the discussion of three basic principles: legitimacy, democracy, and justice. The conference focused on these three guiding principles with a view toward the eventual forthcoming reforms in EU legal and political structure. The conference that led to this book was made possible thanks to the assistance of the Minister of External Affairs of the Government of Spain, the Government of the Basque Country, the Government of the Province of Biscay, the City Council of Bilbao, the University of the Basque Country, and Kutxabank. I would like to acknowledge the commitment these institutions have made to academic discourse regarding the future of Europe. We are enormously grateful for their support. We would also like to thank the people who helped organize the conference, the means of communication who spread the word about our debates, the audience who attended, and the enthusiasm with which Rowman & Littlefield Publishers welcomed the idea of publishing these papers in the form of a book. All that remains, therefore, is to hope that these theories and convii

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cepts will be transformed into debates and decisions, because they are all needed to construct the future of Europe. —Daniel Innerarity, director of the Institute for Democratic Governance

Introduction Serge Champeau

What is the current situation of the European Union after the euro crisis and what might its future hold? The question posed to the fifteen specialists on Europe who were meeting in Bilbao could not fail to provoke divergent approaches. Of course, the term after led to many interrogations as well as smiles or even sarcasm. Additionally, for many participants, the crisis, even if it has been overcome, could not be reduced to a euro crisis. The concept of crisis itself, whether viewed as a euro crisis or a more general one, was certainly interpreted in more than one way. Finally, regarding the future, everybody knows how social scientists, aware of the weakness of our knowledge and the contingency of history, are reluctant to engage in this area. The organizers of the conference, aware of these conceptual challenges and difficulties, nevertheless wanted to encourage debate on the current state of the European Union and its future. The social sciences, whether economics, law, political science, sociology, or philosophy, cannot aim at the scientificity—often widely idealized—of the natural sciences. On the one hand, they stem necessarily from issues that are spontaneously born in a society, even if they have to be reformulated—and those questions (Where are we? Where are we going?) are the ones asked by today’s European citizens, who are plagued by doubts and anxiety. On the other hand, the demand for scientificity in the social sciences is by no means incompatible with the existence of divergent results, the observation of which does not lead to scepticism or to relativism but rather to partial and provisional syntheses that ultimately have to be completed by the reader. The fifteen chapters in this volume develop their own arguments on three levels. Each of them proposes (1) an interpretation of the European Union crisis, (2) considerations about the democratic and legitimate character of European policies, and finally (3) hypotheses on the future of the European Union, from a factual or normative point of view (related to European Union ideals of justice and solidarity). But the proportion of these three elements varies from one contribution to the other. Some remain within the domain of the first question, others relate primarily to number 2, and others mainly reference number 3. For this reason, we 1

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have chosen to divide the book into three parts: Part I: The Dimensions of the European Crisis; Part II; Legitimacy and Democracy; and Part III: The Future of Europe: Building Integration, Justice, and Solidarity. Such a distribution, as the reader will note, necessarily implies a degree of arbitrariness. Part I addresses different interpretations of the crisis, which is economic but also political and constitutional (due to the new powers given to the different branches of the European executive to escape the euro crisis as quickly as possible), as well as social and cultural (the “European social model” seems to be threatened). The contributions, which agree on numerous issues, disagree (a) about the respective weight that has to be given to those different aspects of the European Union crisis, (b) about the links that should be established among them (are each of the areas of the crisis developing independently of the others or must we view some of them as cornerstones?), and (c) about the perspectives faced by the European Union (is it on the verge of collapse? Or simply weakened? Or sounder than it might appear?). The chapters in Part II describe and interpret more specifically the constitutional and political crisis of the European Union that was triggered by the new balance that has gradually been introduced within European institutions in favour of the different branches of executive power. Is there a constitutional order in Europe, and who is its ultimate guardian? To what extent was the confidence of creditors and citizens lost? The contributions in this part aim at measuring the seriousness of this political and constitutional crisis. Despite the different answers given to these questions, they all acknowledge that these crises need not be measured in light of the politics and constitutionalism of the nationstates. Part III, more predictive, combines the viewpoints of European Union specialists with those of politicians with national- or European-level responsibilities who are known for their theoretical contributions to European studies. Is the Union going to fail or disappear? If so, is this going to mean the end of the process of integrating European countries? Or is this multidimensional crisis going to open the door for a reform of the Union that is going to address its democratic and executive deficits? Under these circumstances, which realistic and effective measures could we consider in the short, medium, and long term in order to revive the ideal of what one of the authors of the volume calls “the post-humiliation society”? The editors of this collection hope that the reader, in view of the range of contributions afforded here, will understand the reasons we felt the need to tackle the question of the future of the European Union from a multidisciplinary point of view. Common exercises in futurology, even when they are carried out with a concern for scientific rigor, are generally satisfied by addressing the changes that could take place “within a specif-

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ic kind of future,” almost always the future dictated by our current condition. When it comes to the European Union, futurology will measure, for example, movement forward or backward within an integrative style that has characterized the European Union from the start. This collection has a different frame of reference. What the various contributions reveal is instead the plurality of the types of future that we can glimpse based on the current configuration, which is strongly marked by uncertainty: whether it is an evolution that delves more deeply into the European Union’s current paradigm, a future of “differentiated integration”; whether it is the emergence of new paradigms of integration, as presumed by the majority of the authors who contributed to this volume; or whether, as some contributors think, new integrative paradigms emerge between European countries that end up relegating the current Union to the past. Or, as one of the authors claims, eschewing the customary paradigm of progress, whether Europe’s distant past may help us understand a “neomedieval” future that will be radically different than the future we tend to contemplate, for lack of sufficient imagination. No matter what comes of these various types of future, all of the authors in this collection are in agreement on two points: we Europeans are living through a period of profound uncertainty, and this crossroads means we must think about the future and make it present beyond predetermined paths, without any guarantee as to results. PART I Sergio Fabbrini, in “The Euro Crisis and Its Constitutional Implications,” notes that “the euro crisis has radically called into question the constitutional system of the European Union as formalized by and in the Treaty of Lisbon.” This system was based on three compromises (between supranational and intergovernmental unions; between the Eurozone and the countries which are not part of it; and between the centralization of monetary policy and the decentralization of economic, fiscal and budgetary policies) which are now threatened by the new Treaties (the European Stability Mechanism, the Fiscal Compact, etc.) adopted to deal with the crisis. These Treaties, constructed outside of the constitutional framework of the Lisbon Treaty, have led the Union to a “constitutional disorder.” After describing the precise impact of European policies on these three compromises, Fabbrini argues that it threatens the paradigm of a “differentiated integration.” The growing differences within the EU appear as what they are: not only different degrees of participation in the same project, but differences about the way the Union is conceived. It is therefore necessary to consider other paradigms in order to put an end to this constitutional disorder, to harmonize the supranational and the intergovernmental, the common currency and the single market, and to

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build a Eurozone that has fiscal autonomy and a legitimate and effective government. Fabbrini first considers the parliamentarist solution, in order to show its limits. He then presents a second solution, based on “a fully separated system of government,” in which the “asymmetries and differences between states have been tamed by the institutionalization of a decision-making system diffusing decision-making power among institutions rather than concentrating it in only one institution.” Such a solution involves a real politicization of these institutions (Parliament and European Council, in particular), autonomous resources, and true control by the citizens. Aware of the concerns that this solution raises, Fabbrini emphasizes that “inevitably any union trying to keep asymmetric and differentiated states balanced, any project of federalizing nation-states, will be characterized by imperfection.” Nevertheless “in order to escape from the euro crisis and its constitutional implications, a new paradigm concerning the process of integration must be defined.” He concludes with the idea that the euro crisis has opened the possibility of looking for “a new institutional perspective . . . on the future of Europe.” Carlos Closa, in “The Transformation of Macroeconomic and Fiscal Governance in the EU,” argues that macroeconomic and fiscal reforms of the EU since 2010 have entailed a deep change in the constitutional and institutional structure of these policies with implications for the EU as a whole. There are four types of changes: (1) the fragmentation and differentiation of the legal structure of these policies, while maintaining their institutional coherence and substance; (2) the europeanization of German preferences in macroeconomic and fiscal matters, in other words the germanization of euro governance; (3) the solidification in the primary legislation of a certain number of macroeconomic and fiscal political options (an essential component of German preferences) which in turn entails a “constitutional mutation” limiting the possible development of the “social constitution” (which, on the other hand, is limited to the national sphere); and finally, (4) the “agency-itis” of the governance model: the assignment of greater responsibilities to depoliticized bodies to the detriment of the political bodies (national parliaments and the European Parliament). All together, these changes amount to a subtle constitutional mutation which has changed much of the essence of EU fiscal and macroeconomic policies without much of a deep constitutional revision. Joxerramon Bengoetxea, in “The Current European Crises: The End of Pluralism?” argues that “even if euro-Europe, the eurozone, could be said to have left the crisis behind, there may still be, indeed there are, other types of crises lingering on either brought about by the euro crisis or accelerated by it.” The European crisis is also a political, constitutional, democratic, and—because it threatens inclusion, solidarity and welfare— a social and cultural crisis. The reasons for this systemic crisis lie, according to Bengoetxea, in “faulty institutional design, mismanagement or ideological-cultural factors.” In particular, the austerity measures imple-

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mented to solve the crisis have generated a widespread sense of social panic and the development of protest movements in the southern countries. The crisis is currently slipping “into dangerous widespread populist, totalitarian and anti-immigrant positions and provoking ‘technocratic’ and market interferences into politics.” This type of evolution raises questions, both from the point of view of democracy (the European executive has taken on powers that go well beyond the rights conferred by the Treaties), of the construction of solidarity (the European project, initially oriented towards solidarity leading to peace and prosperity, has turned into one of austerity, sacrifice, and mistrust), and from the point of view of pluralism (anticosmopolitan feelings are exacerbated by decreased internal and external solidarity provoked by the economic and social welfare crises). How can the European Union meet these challenges? Will a European people, a new constituent demos, emerge from this systemic crisis? Will the multiple demoi learn to coordinate their policies? Will the states or the substate unities remain “the default level natural forum of austerity and solidarity politics”? Once the crisis is over, a public space, both local and European, could arise “where the hard decisions required in order to weather the economic and financial crisis are deliberated and become effective and where the social solidarity necessary for inclusive strategies to manage socioeconomic inequalities and cultural diversity inspires harmonizing measures in the EU and especially the Eurozone.” The aim of such a democratic forum should be to clarify the level at which it would be possible to give an effective and legitimate answer to the challenges posed by the European crisis. In other words, it becomes essential “to recover the art of politics.” PART II Christian Joerges, in “Is There a Guardian of Constitutionalism in the European Union?” notes that the European crisis has led to a renewed interest in Carl Schmitt’s thought. In the exceptional situation experienced by the EU, we have been witness to an “unprecedented rise and exercise of executive powers,” to such an extent that the constitutionalization of the Union, its process towards an “ever closer and then ever more democratic Europe,” can no longer be guaranteed. The economic crisis has led to giving the European executive (European Council, ECB) powers that do not take into account the balance of powers as provided for in the Treaties and hence “cannot respect the democratic legitimacy of national institutions, in particular, the budgetary powers of parliaments.” In other words, rule-of-law and legal protection requirements have been suspended. We have therefore to look in detail at “how the crisis is affecting Europe’s constitutional constellation.” Of course, today’s Europe is not Schmitt’s Weimar Republic. But the current situation brings about a

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question already faced by Schmitt: “Which institution is in a position to exercise the function of constitutional guardianship under such circumstances?” The CJEU (Court of Justice of the European Union) cannot, by all accounts, play this role (the Treaties have not entrusted it with an encompassing constitutional function, and it has to deal with a broad variety of democratically legitimated polities and their constitutional national courts). We should therefore consider reconceptualizing its vocation in a twofold way. Rather than assuming a supranational prerogative to define uniform rules for the entire EU, the court should be entrusted with the task of a fair resolution of conflict constellations, which an ever more diverse Union is bound to generate. It should furthermore foster the development of cooperative solutions of the steadily growing range of problems which the member states, due to the manifold interdependencies of their economies and societies, cannot resolve autonomously. Europe’s present crisis management is instead characterized by a strengthening of executive powers, the establishment of hierarchical governance structures, and strong supervisory mechanisms. The outcome, and even more so the sustainability, of these new modes of economic governance is far from clear. Europe’s judiciary seems overburdened with the assessment and control of such uncertainties. What we are witnessing, however, is a transformation of Europe’s constitutional constellation: The community method and core elements of the institutional order of the Union have been abrogated, while no normatively viable alternative order could be established. The judiciary is not in a position to fill that gap. It cannot act as Europe’s pouvoir constituant. Joerges frames his conclusions in a nuanced manner. Under the present uncertainties, we, the jurists, “must neither be surprised by the takeover by crisis managers and their practices of muddling through nor be arrogant in our evaluation of all that.” Recognising the limits of constitutional law is not, according to the author, an attitude of resignation, but can help in restoring the law’s integrity, if lawyers, rather than prescribing a specific outcome or instead of subscribing without further ado to the prerogative of a politicized executive, become sensitive to Europe’s new conflict configuration and help to define procedures within which these conflicts can be fairly mediated and the return into a constitutional condition be achieved. Michael Marder, in “Carl Schmitt and the Deconstitution of Europe,” notes that after the bursting of the “constitutional bubble” (the failure of 2005), the economic crisis has destroyed, at least in the southern countries, the EU’s “legitimation through prosperity.” The policies implemented to escape from the crisis, in addition to being ineffective, “do not emanate from a procedurally defined source.” They are, to use a Schmittian concept, extralegal sovereign acts, giving evidence to the strong inequalities of political power within the European Union. Leading to strong opposition in the southern countries, they have removed the legit-

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imacy illusion enjoyed by European bodies. The Union, as an economic integration process, is suffering from a political deficit: “the clandestine sovereignty of the Troika stepped into the vacant political and constitutional space of the EU.” The European Union is now facing the task of going beyond this stage of “liberal depoliticization.” Marder argues that the European Union is not a constitutional political body, that its Treaties are only “formal guidelines” for membership, and that the power division within the Union only sets up “an abstract order that suspends in midair the relations of supremacy and subordination.” Such a situation “sets the stage for a violent standoff between the emergent realities of political existence and the ideal of an alien form foisted upon them.” Do we have to seek a solution in the dynamism of integration within the European Union? There are two reasons to doubt this solution: successive enlargements do not deepen integration, and they do not lead to a fruitful tension among the constitutional traditions of different countries, but to the domination of some of them. The construction of the political existence of Europe can only be done, in such conditions, outside the legal framework, through the action of the “the suprapolitical economic agents and the infrapolitical seeds of popular sovereignty.” In other words, it must be constructed by the rating agencies, financial institutions, and banks, on the one hand, and on the other, by “an alliance of people who are intensely distrustful of states and who are palpably disenfranchised by the status quo.” How, in this situation, will the EU manage to build its political existence? Marder believes that, “the crisis of sovereignty in Europe, where that idea was born, foreshadows, rather than a soft descent into political nothingness, a harsh contestation—perhaps the harshest ever—of the meaning of the political.” The question “Who is its selfconstituting subject?” takes precedence over the question “What is the best form for the EU constitution?” Is this subject a union of states, a union of peoples, or a third, as yet unknown, constitutional subject? The political conflicts currently encountered by Europe are the melting pot for this political issue. Antje Wiener, in “A Hidden Asset in Times of Crisis: The EU’s Unbound Constitutional Quality,” suggests addressing the issue of the European crisis not only from an economic and political angle but rather from the robustness of European institutions. From this point of view, the Union is not in as much of a crisis as we might think: “I argue that all is not lost, for the EU is able to resort to a sustainable constitutional quality.” Proof of this is the fact that its constitutional order, “the world’s leading non-state polity,” serves as a reference for numerous organizations and communities, “prior to, during and despite the situation of ‘crisis’ in the EU.” Wiener first focuses on the extent to which the EU might be a blueprint. Far from being an external phenomenon, this creative appropriation of EU-ropean institutions is a central element of the construction of Europe: the ways in which EU-ropean norms are incorpo-

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rated into other contexts provide an important criterion for assessing their ultimate meaning. Secondly, Wiener underlines the major feature that enables the EU to become such a blueprint: it is the only political entity that has grown from “state-bound constitutionalism” to a process of constitutionalization that are “unbound from the state” (this expression not only implies a constitutional process involving different states but also the fact that “actors other than the state are involved”). Thirdly, the author attempts to differentiate the guiding principles underpinning her analysis of the European blueprint appropriation process from those of other theoretical approaches. Wiener’s approach highlights the interactions and discussions deriving from these norm transfers within the organizations and communities that refer to the European Union. The conclusion of the chapter illustrates this theoretical approach with reference to some case studies regarding creative appropriation of European constitutionalism (ASEAN [Association of Southeast Asian Nations], SADC [South African Development Community]). Gerard Delanty, in “Europe’s Nemesis? European Integration and Contradictions of Capitalism and Democracy,” argues that the EU and member states are facing a new kind of legitimacy crisis. The recent evolutions of capitalism since 2008 have shown the states’ inability to balance “management with democracy, efficiency with legitimacy.” Economic globalization undermines the power of democracies over capitalism everywhere. These developments have led to a social discontent that “has now crystallized in numerous forms—both to the right and to the left— provoking a democratic challenge to the state and to the EU opening up different future scenarios.” The weakness of states brings about a strong demand from the people, with unpredictable results. Delanty is aware that by saying that “democracy has been undermined by capitalism,” he is interpreting the crisis Europe is traversing against the current. The chapter presents four competing interpretations that are partially true for the author but cannot fully explain nor solve “a problem that has its origins in uneven capitalist accumulation and a disjuncture of economy and state.” The model of democratic capitalism that has been at the foundation of Europe’s construction is facing a crisis. The way in which the European Union is attempting to escape the crisis does not solve this legitimacy problem. European policies lead to what the author calls “the recalcitrance of the political”: the proliferation, from right and left alike, of numerous demands that neither the states nor the EU can satisfy and that could eventually jeopardize democracy. Where will such a frustration lead us? Could it bring about a true “repoliticization of the economy and state”? Delanty points out the difficulties of this repoliticization. The realization at a European level of some of the components of democracy (“egalitarianism and social inclusion,” “citizenship” as civic participation) requires a radical transformation of the EU “which will paradoxically require what it needs to bring about.” Indeed, the return to a Europe of

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the nations is highly unlikely, but the risk of a less integrated Union is real: what is desirable from an economic point of view, a stronger Europe, with resources and redistribution powers, is “either not desirable or impossible politically.” There are many forces in favour of a transformation of the Union (right-wing populism, anticapitalist movements, antiausterity protests, alternative economic practices), but “what they do not offer is a basis on which to build a democratic future.” The crisis will last for years and, unless it gets worse and mobilizes the middle classes, it shall not give rise to any social movement able to transform the European Union in the sense of what is “the core of European modernity”: a balance between capitalism and democracy, “a social as opposed to either a market- or state-based conception of society.” However, hope remains that “the realisation that European integration has delivered neither democracy nor made capitalism work may be the call that will awaken the democratic spirit.” Jenny Preunkert, in “Double Trust: Creditors’ and People’s Confidence in the Euro Crisis,” starts from a concept of crisis wrought by Habermas and Sztompka. From this basis, the European crisis and its outcome can be understood when the crisis interpretation of the actors and the crisis management is included in the analysis. To reassure the financial markets, the management of the crisis by European institutions has focused on the recovery of creditor confidence, by helping the countries facing difficulties and by reforming the institutional framework in order to prevent similar future crises. This has led to a new step ahead in the integration process, most particularly within the Eurozone. But the social consequences of the crisis (a rise in unemployment, particularly among young people) have not been taken into account by European institutions. Despite a few late and limited reactions (the Youth Employment Package, the Youth Employment Initiative), there is still a question about “how effective national and European efforts will be and whether they will be sufficient to combat the problem.” The social consequences of the crisis might have negative effects not only on the peoples of the countries in difficulties, but also at a political level. The loss of confidence in national elites is obvious, but “people have also lost their positive understanding of the EU and their trust in the European project.” This type of management of the euro crisis, with the subsequent destabilization of the peoples, could have serious effects on the confidence of the financial markets and on the European integration process, due to the increase in Euroscepticism. Preunkert cautiously concludes that the future will show if the European elites are able to use the new awareness and new attribution of responsibility to strengthen their own legitimate basis or if the loss of trust will strengthen nationalistic and eurosceptical powers on the national and European level and therefore endanger further European integration.

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“What are the criteria for judging the democratic quality of the European Union? Who vouches for it? Is it possible to reconcile our democratic criteria with the intense, extensive complexity of a polity such as the European Union?” Daniel Innerarity, in “What Must Be Democratized? The European Union as a Complex Democracy,” starts by recalling that the perplexities we experience when attempting to answer these questions often have their origin in the fact that many of the concepts that are applied to the study of European integration are tied to the conceptual universe of the nation-state. The first challenge to be met is to think about European integration without resorting to state concepts which have locked up the debate in opposition to federalism and intergovernmentalism and have focused it on the “democratic deficit.” We must begin with the European Union’s complexity, which finds its origin in the need for combining the state realities that comprise it with the challenges of transnational governance. This complexity leads to a joint, or pluralistic, constitutional regime, which combines governmental structures on different levels. For Innerarity, such hybridity, midway between a federal state and a confederation of states, is not a weakness but rather an asset. It gives the opportunity to articulate political unity and diversity, and thereby to develop democratic theory. Certainly, in such a political entity, decision making and responsibility become more complex. But this should not obscure the democratic innovation of the European Union: the search for a “correct combination of the diverse components of a complex democracy: representation, effectiveness, delegation, election, participation, advice, balance, responsibility”; the implementation of a supranational and intergovernmental power which consists of a “multilevel and pluralist structure, more consensual and cooperative than antagonistic and hierarchical”; the construction of “a response to the process of functional differentiation and globalization that weakens forms of territorial power, in such a way that it makes it possible to recuperate spaces of political configuration.” Who in such a system is the ultimate guarantor of democracy? Innerarity recalls that “for some years now, there has been increased resistance to recognizing any democratic or constitutional originality in European governance beyond the mere national delegation.” Proof of this is, in particular, the debate generated by the interventions of the German Constitutional Court. After analysing these interventions, the author concludes that the idea of the nation-state as the primary political realm in which community is achieved is wrong, both from the normative and the practical point of view: “it does not sufficiently understand the evolution of the context in which democratic ideals are developed today, it is not consistent with the values that should rule relationships between political actors, and it puts into motion a dynamic that ends up being unsustainable.” The integration movement of the European Union requires that “we elaborate a postsovereign idea of the control of constitutionality, of communitarian interest, and of democratic legitimacy.”

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The question is not about who holds sovereignty (the nation-states or the federal state) but to be aware of the fact that in this integration process the Union needs to develop “its own mechanisms of democratic legitimation” and therefore that the States cannot “claim control over the democraticity of the European Union.” For Innerarity, the European Union, a polity which comes after the Greek cities and the modern states, opens a new phase in the history of democracy. In this third moment, expansion and heterogeneity, far from being contradictory as regards democracy, represent a creative development. The experimentation of constructing the Union charges us with the task of building, for the first time in history, “a complex democracy, a democracy that is not coercive or based on a homogeneous people”—a process whose outcome is unknown. Serge Champeau, in “Populist Movements and the European Union,” argues that, beyond the euro crisis, Europe is going through a political crisis. Focusing on the interpretations of the populist movements in Europe, Champeau begins by rejecting two prevailing theories and proposes to understand populism as “a truly political phenomenon that need not be interpreted as a manifestation of citizen ignorance or mistrust of representative democracy and a demand for direct or participatory democracy.” Empirical investigations highlight the fact that the citizens who support these movements are far from sharing the ideas of demagogic leaders. They do not challenge representative democracy; instead, they express their will to be governed according to the common good. Facing institutions they perceive as paralysed by rivalry and powerlessness, they require coherence and efficacy. We could reject such political demands by arguing that they project on the European Union a conception of policy that is only valid for the nation-states. Though aware of the limitations of these demands, Champeau believes that European institutions must hear what the people are saying. They want the Union to live up to its ideals, to construct a type of coherence and effectiveness of its own. Interpreted in this way, populist movements are a normal political phenomenon that can help the Union give greater coherence, effectiveness, and visibility to its actions and encourage it to focus on its limited major tasks. If Europe does not turn in this direction, it is likely that the populist movements will in the end be exploited by demagogic or even totalitarian movements. Champeau invites the advocates of the European Union to escape the moral idealism which too often characterizes EU actions (as shown in “the creation of the Eurozone without the necessary guarantees, in a period of general optimism, or in the failed attempt at the constitutionalization of treaties, in an atmosphere of nearly Philadelphian enthusiasm”) and to cultivate political realism. The conclusion of the contribution insists on the fact that the deficit of the European Union is as executive as it is democratic. Even though both deficits are closely linked, democratization, no more than the politicization of European entities, does not single-handedly ensure coherent and effective results. But democrat-

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ization and politicization are highly necessary in the sense that the European Union must meet the demands of the peoples with decisive actions and become “more conscious of the limits of European policies and the absolute need for coherence and efficacy, making an effort to make the order inherent to the European ideal emerge.” PART III Jan Zielonka, in “Legitimacy in a Neomedieval (Postcrisis) Europe,” notes that neither the EU nor the member states have been able to come out of the crisis and recent politics unhurt: “today the European welfare system is in tatters in most of Europe and the EU is seen as an agent of globalization, imposing severe domestic constraints on its member states.” In this situation, neither the federalist nor the national solution can be effective: the first will only reinforce the institutions that have not been able to deal with the crisis or have made it worse, the second will lead to highly unequal states which will end up facing the same problems on their own. On the basis of this analysis, Zielonka contemplates Europe’s future as “a maze without a clear hierarchy or structure”: different legal, economic, security and cultural spaces are likely to be bound separately, crossborder multiple cooperation will flourish and the inside/outside divide will be hazy. Most states will enjoy limited sovereignty not just because of mounting global economic pressures, but also because of the demands coming from powerful regions, cities, and neighbouring states (or if you wish, local hegemons). Citizen’s loyalties will be split; democracy will function differently and independently at the local, national and regional levels; social and administrative provisions will be offered by diverse public and private actors operating transnationally.

For Zielonka such a “neomedieval,” pluralistic, hybrid, and heterogeneous Europe is not necessarily a system doomed to anarchy and war. The integration is likely to continue. Integration could come not only from the EU and the most powerful nation-states, but from numerous public and private players (strong regions and cities, the remnants of EU institutions, and numerous European NGOs): “functional clubs and networks will represent a viable alternative to the current overcentralized and overpoliticized arrangement embodied by the EU.” The conclusion of the contribution addresses the issue of legitimacy within this neomedieval Europe. Zielonka does not believe in the efficacy of the solutions that are usually put forward (strengthening the power of the European Parliament, for instance). Such a neomedieval Europe will see “the rapid growth of numerous extraparliamentary, power-scrutinizing mechanisms.” Democracy no longer means the delegation of power to elected officials within confined territorial states, nor government implementa-

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tion of the common “will” of any given national majority. The author concludes that legitimizing complex polities is certainly a challenge, but it is not necessarily a greater one than legitimizing the current EU. Legitimacy of networks can be based on expert knowledge and moral authority. Those networks that enhance civic participation, public discourse or contestation will enjoy a republican type of legitimacy.

Miguel Poiares Maduro, in “The Euro Crisis and Institutional Reform in the EU,” argues that “the origins of the financial and economic crisis of the euro system are state- and market-based democratic failures that the original regime of euro governance did not adequately address.” If we believe that the crisis is due to fiscal irresponsibility and to the lack of competitiveness in some countries, this means that, in those countries, the democratic process has not taken other countries’ interests into account. If we believe it is due to the excessive flux of capital that the northern countries have invested in the southern ones since the euro’s introduction, this means that the impact of this flux in some countries has not been subjected to democratic control. Rejecting this second explanation (the control of the flux of capital is incompatible with the monetary union), Maduro argues that the solution to the crisis correctly interpreted requires fiscal discipline, which is a necessary condition for restoring market confidence as well as confidence among member states, but that this discipline is not enough, for both economic and democratic reasons. A fiscal union also requires a coordination of the economic policies among the states in order to make them complementary. It is also necessary to consider the impact of such discipline on democracy (respect for the democratic process could challenge this discipline, and the fact that it is imposed by a technocratic institution could jeopardize the democratic process). This analysis leads Maduro to propose another solution. He begins by listing six conditions that must be met by any European policy (political authority in the Eurozone; clearly assignable responsibility; the restoration of mutual trust between states and citizens; visibility of the profits and democratic consequences of interdependence; the legitimation of financial solidarity; and lastly, political integration, in particular by the construction of a European public space, which is a condition of new power transfers and real financial solidarity). On the basis of these conditions, Maduro presents three specific suggestions: (1) “an increased EU or euro budget supported by real EU revenue sources” (in order to implement the policies capable of addressing the asymmetries that affect the good functioning of the monetary union); (2) “new and different kinds of EU policies” (in particular, policies “structured around citizen benefits and rights instead of simply being allocated by national quotas”); and (3) “more effective political authority supported by a European political space” (in particular a Commission drawing its legitimacy from a

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more direct link with the results of European elections). Without such new democratic policies handling the crisis, European citizens will not be able to escape the alternative to which they are confined at present: “to be for or against Europe.” Josep Borrell, in “About the Democratic Governance of the Euro: How the Crisis Is Changing Europe,” denies the idea that we have left the crisis behind us. It may be that the monetary union is no longer threatened with disintegration, but we have “entered into a chronic phase of weak growth, unemployment and recession in the ‘peripheral’ . . . countries . . . and high risks of social disintegration.” The reason for this situation is known: the euro has covered up growing differences in competitiveness and has favoured the indebtedness of some countries. European policies, in dealing with this problem, may have saved the euro but “at the cost of sacrificing Europe.” The current European crisis can be read on the basis of three axes: loss of legitimacy, insufficient democratic functioning, and increasing inequalities and precariousness throughout Europe. This leads to a profound distrust regarding the Union, both from northern and southern countries. Borrell, to underpin this diagnosis, recalls what has been EU policy in response to the crisis since 2008. The changes in the economic government of the Eurozone, even though they were late, have been important: creation of the ESM (European Stability Mechanism), interventions of the ECB, reinforcement of the budget surveillance system, implementation of the banking union, measures in favour of a growth policy, and so on. But these late, shy, and sometimes unfinished changes have led, in the author’s opinion, to many mistakes. The results can be seen: austerity measures have dampened economic activity, without putting an end to the vicious circle between the indebtedness of the states and the insolvency of banks, while considerably minimizing member state autonomy. These policies are doomed to failure, because “they are economically counterproductive and politically and socially impossible.” The conclusion of the contribution considers alternative solutions to get Europe out of the crisis: different policies (finding a balance between fiscal stabilization and the stimulation of demand, the financing of major European projects, the adoption of eurobonds, etc.) and institutional changes. On this last point, Borrell, aware of the difficulty with constructing a more “federal” European Union, argues that the Union (or the Eurozone) must develop its own fiscal capacity to finance European public goods and to stabilize transfers, under the control of the European Parliament; that it must go beyond the framework of solidarity among states, breaking the taboo which bans “interpersonal transfers”; and, finally, that it must evolve towards a bicameral system in which the Parliament assumes the full representation of the peoples and the Council of the EU, territorial representation (the Commission being an executive power supported by a parliamentary majority). Borrell’s conclusion does not minimize the magnitude of the task.

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Erik O. Eriksen, in “The Eurozone Crisis in Light of the EU’s Normativity,” argues that if the European Union’s responses to the crisis trigger reaction—despite its limited competences—it is due to the fact that “there has been an idea of a better Europe, of peace, justice, dignity and democracy, built into this project from the very beginning.” The European integration process carries hope for a post-humiliation society. Europe has indeed embarked upon a process building a democratic supranational federation inspired by the ideals of the French Revolution: equality, freedom, solidarity, peace, democracy. The member states, “entangled in a community of fate and of collectivized risks,” are now closely interrelated on the basis of mechanisms ensuring cooperation. They have given birth to democratic innovations: “constitutional fusion, shared sovereignty, stateless government, parliamentary interweaving, and a layered public sphere.” With the crisis, this moral ideal of European integration has become even more visible. The crisis has highlighted the fact that this integration is not only a matter of “joint convenience” but a matter of “justice and solidarity.” However, the political answers given to the crisis have undermined this ideal; they have “brought humiliation back—not only in the form of economic and social exclusion but in the form of executive, intergovernmental dominance as well.” Once more, the crisis has divided Europe: “naming, shaming and blaming take place among groups and states in Europe today, creating images of suppliers and spenders, of givers and receivers.” At the same time, it has made us crystal clear that this crisis can only be solved through a greater effort at solidarity. Can we implement such a solidarity without a collective identity, and all that depends upon it, “civic virtues and bonds of comradeship”? In short, can there be a fiscal union and redistributive policies without something like a state? The Eurozone’s contradiction is obvious: the implementation of such solidarity requires the resources of a state while the members are “neither sovereign states nor members of a federation.” Eriksen, in the conclusion to his contribution, claims that it is nevertheless possible for the European Union to implement a fiscal Union without a punitive state, with no external enemy and no collective identity. In the past, the Union has already moved in that direction. The current Eurozone crisis gives us “reasons for solidarity,” and these reasons are beginning to have an impact. The interest of the member states (getting out of the crisis) adheres closely to moral reasons (building solidarity). However, for this solution to be effective, another condition is necessary: “leadership and resolve.” Without it, catastrophe is looming in Europe: “a deeply divided continent leaving millions in misery and utmost poverty is a possible outcome of a solution with lax measures.” Beatriz Pérez de las Heras, in “Beyond the Markets: Citizen Participation and Social Progress for a More Popular and Inclusive Europe,” notes that there is a gap between the Treaty of Maastricht, in which the idea of European citizenship implies “a new civil status of a supranational na-

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ture,” and the disenchantment of European citizens: “Europe is still in the process of being constructed and its citizens, its future demos, have never before been as distanced from the European political project.” The economic crisis and European austerity measures have, in the eyes of European citizens, eroded the fundamental values of the Union, most particularly solidarity and social inclusion. And because they have gone beyond the legal framework of the Treaties, they have also tarnished the democratic legitimacy of the Union. Since no political measure aimed at getting out of the crisis can be implemented without the active support of the citizens, the Union’s priority should be to strengthen citizen participation. Pérez de la Heras believes that in the short term, two instruments could be effective: the European citizens’ initiative of the Treaty on European Union and the European elections of 2014. Jurists are discussing the full extent of the initiative, most particularly whether it can be used to reform the Treaties. Pérez de la Heras, while arguing in favour of a positive answer, believes that whatever the outcome of the legal controversy, EU citizens could encourage the Commission to propose constitutive modifications on which to later elaborate a legislative blueprint. If properly managed, citizens’ initiatives could become a bottom-up instrument for political innovation. Regarding the European elections, they might be followed by reforms strengthening the democratic character of the Union (greater visibility of the connection between the candidates and European political groups; elections taking place on the same day across Europe; the election of the president of the Commission by direct universal suffrage). In the longer term, these reforms will open the door to other measures (some of which demand a modification of the Treaties): the merging of the presidencies of the European Council and the Commission; the election of the members of the Commission by Parliament; approval by the Parliament of the candidate chosen by the Council to preside over the ECB; the right to a legislative initiative for the Parliament; the extension of the control power of the Parliament on common foreign and security policy, on safety, and on economic policy. In other words, Pérez de la Heras believes that “the only viable alternative to stanch the deep social wounds opened by the euro crisis is to move toward political integration in Europe.” For that purpose, the member states would have to “cede sovereignty,” and the citizens must “consent to it through respective constitutional procedures.” Although this political union is an ideal, major steps can be made in the short and medium terms (banking union, fiscal union, and economic union) together with the necessary institutional modifications. A key step toward this political evolution will be the implementation of a new European social model (with, for instance, a mandatory minimum level of social expenses for each country, according to resources, and sufficient power and resource transfers to the EU, in order for the Union to be able to implement a social policy). Lastly, the 2014 elections and institutional changes shape a scenario favourable

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to opening a constituent process to reform the Treaties, with a Convention in charge of leading the Union toward stronger political integration. A referendum at the European level might help to approve the texts written by this Convention. Pérez de las Heras sees the crisis as an opportunity to rebuild the European Union and transform it into a real democratic political community based on the solidarity of the states and the citizens, as well as on economic and social development.

ONE The Euro Crisis and Its Constitutional Implications Sergio Fabbrini

The euro crisis has radically called into question the constitutional system of the European Union (EU) as formalized by and in the Treaty of Lisbon (entered into force on 1 December 2009). The EU constitutional system was based on a plurality of constitutional compromises. First, the compromise between a supranational union (in charge of single-market policies) and an intergovernmental union (in charge of those policies traditionally close to national sovereignty, such as the economic and financial policy of the EMU [Economic and Monetary Union] and the foreign and security policy of CFSP [Common Foreign Security Policy] and ESDP [European Security and Defense Policy]). Second, the compromise between EMU countries (that is, the member states adopting the common currency, the euro, or engaged in meeting the macroeconomic criteria for adopting it, the “pre-ins”) and member states retaining their own traditional currency (because they were allowed to opt out from the EMU, the so-called “outs”). Third, the compromise, within the euro area, between the centralization of monetary policy by a supranational institution (the European Central Bank or ECB) and the decentralization of economic, fiscal, and budgetary policies in the member states, subject to the voluntary coordination of their governments. In order to meet the challenges posed by speculation in the financial markets, the EU has approved a panoply of new legislative measures through the procedures established by the Treaty of Lisbon, but a number of EU member states have also approved new intergovernmental Treaties (the European Stability Mechanism, or ESM, and the Treaty on 19

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Stability, Coordination and Governance in the Economic and Monetary Union, the so-called Fiscal Compact) outside of the Treaty of Lisbon, besides executive agreements (as the European Financial Stability Facility or EFSF and the Euro Plus Pact) binding of course only the signatory member states. These legislative measures, intergovernmental Treaties and special-purpose agreements have upset the multilayer structure of constitutional compromises. The EU is experiencing true constitutional disorder. How can it solve it? In order to answer this question, I will proceed as follows: In section 1, I will discuss the first compromise between two different political interpretations of the EU (the supranational and intergovernmental interpretations) that emerged definitively with the Maastricht Treaty of 1992. In section 2, I will enter more in detail into EMU structure, discussing the compromise between EMU member states (favouring a deeper political integration) and the member states outside of the EMU (interpreting the EU as an economic community), but also the compromise within the euro area between centralization and decentralization of the EMU. In section 3, I will analyse the consequences of the euro crisis on the multilayer structure of constitutional compromises, showing why the euro crisis has been transformed into a crisis of the EU. In section 4, I will investigate the plausible alternatives (the parliamentary union and the compound union), both centred around the euro area, for going beyond the current situation. Finally, I will draw some conclusions from the analysis. 1. THE MAASTRICHT COMPROMISE The Maastricht Treaty (1992) officially established that the economic and financial policy of the EU would be defined and regulated within a decision-making regime that was intergovernmental in nature. The Maastricht Treaty was necessarily conditioned by the historical context within which it was negotiated and then signed by the member states on 7 February 1992. Organized after the end of the Cold War, the intergovernmental conference held in Maastricht in 1991 had to deal inevitably with issues unconnected with the single market (Baum 1995–1996). For this reason, it was decided to bring those issues within the integration process, but on the condition that they should be strictly controlled by member-state governments. Indeed, the Treaty introduced an institutional differentiation that promoted different decision-making methods for dealing with different policy areas. Three distinct pillars were created, organized according to different decision-making regimes. The homogeneous character of the supranational entity which emerged from the previous decades was altered through the formation of different institutional settings separate one from the other. Indeed, since the Rome Treaties of 1957, the Union developed through the so-called

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“Community method” (Dehousse 2011) based on the idea that decisionmaking power has to be shared between supranational institutions (as the Commission—with its monopoly of legislative initiative—and later the European Parliament or EP become a true codecisional legislature) and the intergovernmental institutions (represented by the Council of Ministers or Council—the other codecisional legislature—and the informal European Council of the heads of state and government—with the role of defining the strategies of the Union). This supranational union was not considered the solution for solving the problems emerging with the end of the Cold War. In that historical context, the member states introduced an alternative constitutional model of integration for governing the policies traditionally close to national sovereignty. Those policies were Europeanized but kept under the control of the collectivity of national governments (as represented by the Council and the European Council, without involvement of the supranational institutions of the Commission and EP). It was also established that, in those policies, integration would have to proceed through political, not legal, acts. Since integration could not take place through law in those policies, the role of the European Court of Justice or ECJ (whose power was and has continued to be crucial in the supranational constitution) would have been curtailed. The two constitutional models (the supranational and the new intergovernmental model) reflected two different views of the political union being promoted in Europe (Laursen and Vanhoonacker 1992). The Maastricht Treaty formalized the compromise between political supranationalism and political intergovernmentalism. This compromise was accepted by many supranationalists on the assumption that the intergovernmental constitution would have been reabsorbed sooner or later by the supranational one “because of the logic of things.” The Constitutional Treaty (CT), elaborated by the Brussels Convention in 2002–2003 and thus signed by member-state governments in Rome in 2004, seemed to confirm that assumption. Although the CT preserved the double constitution of the Maastricht Treaty, it nevertheless created the momentum that would have plausibly led to the supranational overhauling of the EU. The defeat of the CT in the popular referendums held in France and in the Netherlands in 2005 interrupted the supranational narrative, legitimizing on the contrary the pact between the two political views of the Union. The Treaty of Lisbon abolished the structure of the pillars that had been formalized in the Maastricht Treaty, but it kept the two different decision-making regimes distinct. In the management of public policies linked to the internal market (which are the majority of policies undertaken by the EU), the Treaty of Lisbon prescribes a model of supranational federation where the decision-making power is shared by multiple institutions. Such a constitution sustains and justifies a system of government characterized by an interplay among the four institutions that participate in the decision-making process (the dual

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executive constituted by the European Council—recognized as a formal institution of the Union for the first time—and the Commission and the bicameral legislative branch constituted by the EP and the Council). At the same time, for policies that have traditionally been sensitive to national sovereignty (in our case, economic and financial policies), the Treaty of Lisbon prescribes a model of intergovernmental constitution with characteristics similar to a sort of executive federalism. Such a constitution sustains and justifies a system of governance, rather than a system of government, characterized by the pooling of decision-making power in the institutions, the European Council and the Council, representing the governments of the Union (on the Treaty of Lisbon, see Craig 2010 and Piris 2010). When the financial crisis struck Europe, at the same time as the Treaty of Lisbon was entering into force, not only was there an intergovernmental constitution in place for dealing with it, but there was also a general consensus that only national governments could find solutions for the financial turmoil. In particular between 2010 and 2012, it came to be believed that economic and monetary integration could develop only if controlled or governed by the national governments represented in the European Council by their leaders (coordinated by the now permanent president of that institution) and in the Council by their functional ministers (the Economic and Financial or ECOFIN Council in particular). It was thus not a surprise to hear former French president Nicholas Sarkozy say in his speech in Toulon on 1 December 2011: “the reform of Europe is not a march towards supra-nationality. . . . The crisis has pushed the heads of state and government to assume greater responsibility because ultimately they have the democratic legitimacy to take decisions. . . . The integration of Europe will go the intergovernmental way because Europe needs to make strategic political choices.” 2. THE EMU’S DOUBLE COMPROMISE The Compromise between the EMU and Opt-Out Member States After having accepted the reunification of Germany in 1990 and in order to keep the reunified Germany within a tighter framework, the Maastricht Treaty also set the criteria for launching an Economic and Monetary Union (or EMU) starting in 1994 (Martin and Ross 2004), which led to the common currency in 1999 (the euro) and its circulation in January 2002, in eighteen out of the twenty-eight member states (as of January 2014). The EMU aggregates a set of policies aimed at converging the economies of all the EU member states, thus creating the condition for the adoption and functioning of a common currency, to become the currency of the Union (Jabko 2006). Certainly this project was not thrown

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together in the aftermath of German reunification (Issing 2008). Indeed, it was largely defined by a 1988 ad hoc committee, chaired by the then president of the Commission Jacques Delors and constituted by the governors of the central banks of the then twelve member states. Already in the 1970s, after the collapse of the Bretton Woods currencies exchange system, projects and proposals for promoting a European monetary system were advanced and discussed. The Delors Report of 1988 was a solution in search of a problem. The problem arrived with the necessity to envelop a reunified Germany into a stronger European framework. Through the launch of the common currency project, a reunified Germany would continue to be a European Germany. Germany, in fact, was asked to give up the symbol of its own postwar economic resurgence, the deutsche mark, in order to be allowed to achieve the political end of that resurgence. The Maastricht Treaty set out a plan to introduce the EMU in three stages. On 1 January 1994, a European Monetary Institute was established as the forerunner of a new banking institution for controlling monetary policy. On 1 June 1998, this new institution, the European Central Bank (ECB), was created, tailored on the model of the Deutsche Bundesbank. On 31 December 1998, the conversion rates between the eleven participating national currencies and the euro were established. On 1 January 2002, euro notes and coins began to circulate. The EMU was not a policy as many others. Since its inception, it had a political, not merely an economic, rationale (Dyson and Quaglia 2010). In fact, it was based on the compromise between the United Kingdom (UK) and Denmark and the other member states. Although celebrated as the economic and monetary regime for all the EU member states, the UK and Denmark were allowed to formally opt out of the obligation to convert their national currencies into the new common currency, regardless of their macroeconomic conditions. De facto, a third member state, Sweden, has been allowed to keep its own national currency, thanks to a biased algebraic calculation regularly showing its inability to fulfil the required macroeconomic criteria. The three countries contributed with others in the 1960s to develop a project of economic coordination, the European Free Trade Association (EFTA), 1 which was in turn heir to the Free Trade Area (FTA), which was an alternative to the one begun with the 1952 Paris Treaty and the 1957 Rome Treaties. Indeed, Denmark, after having rejected the Maastricht Treaty in a popular referendum held in 1992, finally came to accept it through a new referendum held in 1993 because of the so-called Edinburgh Agreement of December 1992, which allowed the country to opt out from the need to adopt the future common currency. The Maastricht Treaty was also a symbolic turning point. The semantic change from the European Economic Community to the European Union, although inclusive of a pillar called the European Community (EC), signalled the deepening of the integration process. In exchange for

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accepting the qualitative leap of moving towards a Union, the member states supporting the vision of an economic community were thus allowed to opt out of the most integrationist policies. The opt-clause was the price to be paid for preventing the ex-EFTA countries from obstructing the extension of the integration process to policies traditionally close to national sovereignty. The opting out from undesired legislation or treaty provisions gave those member states the right both not to participate in specific policy areas and not to be subject to a general jurisdiction in it. The opting-out compromise has accompanied the process of integration from Maastricht to Lisbon. In addition to Denmark and the UK opting out of adopting the euro, protocol 30 of the Treaty of Lisbon asserts (article 1) that the Charter of Fundamental Rights “does not extend the ability of the Court of Justice of the European Union . . . to find that the laws, regulations or administrative provisions, practices or action of Poland or of the UK are inconsistent with the fundamental rights, freedoms and principles that it reaffirms.” The Czech Republic has joined the two member states in opting out of the charter with the 2013 treaty on the accession of Croatia. Regarding legislation, Denmark, Ireland, and the UK have opted out of policy regulation in the area of freedom, security, and justice. Ireland and the UK have opted out from the Schengen agreement on the free circulation of persons within the Union. 2 Denmark has opted out of foreign and security policies. At the end of 2013, five member states had these opt-outs: Denmark (four opt-outs), Ireland (two optouts), Poland (one opt-out), Sweden (one opt-out, but only de facto), the UK (four opt-outs), and the Czech Republic (one opt-out, ratified by the 2013 Treaty of the Accession of Croatia). The opting out of the adoption of the euro has, however, had a special character: it formalizes the existence of different economic constitutions. Notwithstanding what the Treaty of Lisbon (TEU, article 3.4) reasserted, namely that “the Union shall establish an economic and monetary union whose currency is the euro” or better that the euro is not an option but a requirement, the UK and Denmark were allowed to keep their national currencies. Formally, the Treaty of Lisbon (TFEU, article 139.1) recognizes this possibility only for those member states that do not “fulfil the necessary conditions for the adoption of the euro (and for this reason they, n.d.r.) shall hereinafter be referred to as ‘Member States with derogation,’ or ‘pre-ins.’” This has never been the case for Denmark and UK. Thus, different economic regimes came to coexist within the same integrated area. Within the EMU, there were the regimes of the euro-area member states (the “ins”) and the regimes of those member states not yet fulfilling the macroeconomic criteria but engaged in meeting them (the “pre-ins”). Outside the EMU, the monetary and economic regime of the member states self-excluded from the common currency (the “outs”). The Treaty of Lisbon has thus institutionalized in the same legal framework diverging economic and monetary interests, with the assumption that

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they would converge towards a shared goal of economic growth and monetary stability. The Compromise between Centralization and Decentralization There is a third constitutional compromise to consider, this time concerning the euro-area member states. This compromise consisted of combining centralization (of monetary policy) with decentralization (of the economic, budgetary, and fiscal policies connected to the common currency). The monetary policy of the common currency was put under the control of a federal independent institution, the ECB, but the other connected policies remained in the hands of member states. Once the process of setting up a road map for achieving the common currency was accepted, the German model of a strictly independent central bank pursuing an exclusively anti-inflationary monetary policy was adopted for the monetary side of the EMU, and for the economic side of the EMU, an intergovernmental model based on the voluntary coordination of policies by member-state governments was chosen. At the core of this compromise, there was the Stability and Growth Pact (Heipertz and Verdun 2010), constituted by a resolution, two council regulations and the Excessive Deficit Procedure Protocol approved in July 1997. The first regulation “on the strengthening of the surveillance of budgetary positions and the surveillance and coordination of economic policies,” known as the preventive arm, entered into force on 1 July 1998, and the second regulation “on speeding up and clarifying the implementation of the excessive deficit procedure,” known as the dissuasive arm, entered into force on 1 January 1999. Finally, although the member states can pursue their own policies, they have to do that within strict macroeconomic parameters (defining the ratio of public deficit and debt to GDP), formalized as proper statutory rules. This policy-making model has been subsequently conceptualized by several scholars (Heritier and Rhodes 2010; Kohler-Koch and Rittberger 2006; Caporaso and Wittenbrinck 2006) as new modes of governance, including the open method of coordination, benchmarking, mainstreaming, peer review. These modes of governance function through voluntary coordination between the governments, coordination thus regulated by macroeconomic rules that only the national governments can determine (as a collective in the ECOFIN Council) whether they have or have not been respected by one of them. There is no legal imposition on the behaviour of national governments by any of the supranational institutions (the Commission and the ECJ in particular). Through voluntary intergovernmental coordination, it was possible to keep the economic, fiscal, and budgetary policies decentralized, thus preventing the formation of a supranational authority and the allocation of supranational resources (as

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an autonomous Union’s budget independent from the transfer of money by member states) for managing those policies. In conclusion, the panoply of constitutional compromises was the price to be paid to maintain the balance between different political views about the EU, thus preserving the unitary character of the project of integration. The role of the various compromises was to accommodate different needs and perspectives, hoping they would not become mutually incompatible. The systemic condition for the success of the multiple constitutional balancing acts was the respective equilibrium between the interests and the views supporting each side of the forces stipulating the compromise. From Maastricht to Lisbon, the EU developed as an internally highly differentiated political system (Dyson and Sepos 2010), able to accommodate member states’ varying interpretations of the integration process and its institutional outcome. With the approval of the Treaty of Lisbon, it was generally thought that those constitutional compromises would finally be consolidated. Facts have not followed expectations. 3. THE EURO CRISIS AND THE CONSTITUTIONAL DISORDER The financial crisis—which impacted on the EU and EMU at the same time as the Treaty of Lisbon entered into force—has upset the complex structure of compromises built within the Treaty. First, it upset the equilibrium between the supranational and intergovernmental constitutions. As provided by the Treaty of Lisbon (Closa 2012), the European Council has become the true decision-making centre for the policies adopted in response to the financial crisis. Because the financial agenda has engulfed EU policy making, the European Council, now finally led by a permanent president, has become the true decision maker (De Schoutheete 2011; Eggermont 2012), not just an institution limiting itself to defining the general aims of the integration process. Given the constraints set up in the Treaty, the Commission has come to play a traditional administrative role, transforming the policy’s indications of the European Council in sound technical proposals. The more the crisis has deepened, the more the European Council has extended its executive role to other crucial policies of the EU. If it is true that the Commission was the Union’s executive when EU policies centred on the single market (Page 1997), this is no longer the case with the shift of the centre stage of the policies in the direction of euro stability. This does not mean that the Commission has become irrelevant. Indeed, because intergovernmental cooperation has not been able to overcome fundamental dilemmas of collective actions (as the enforcement and compliance dilemmas), the governmental leaders of the European Council have had to resort to the Commission. Legislative measures (the

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European Semester, the Six Pack, the Two Pack) and new intergovernmental Treaties have indeed increased the functional role of the Commission (and even of the ECJ, but also of the domestic constitutional courts) in monitoring member states’ behaviour regarding their respect and enforcement of intergovernmental decisions. Using an oversimplified picture of the policy-making process structured around three basic phases (elaboration, decision making and implementation), one might argue that the Commission has become the exclusive actor in the third phase, it has played a minor role in the second, and it has lost its traditional role in the first phase. In the first two phases, it has been the European Council (and in particular the meetings of the heads of state and governments of the euro area formalized as the Euro Summit by the Fiscal Compact) that played the crucial role. Moreover, also regarding the EP, there are signs of a significant political downsizing. It is true that many legislative measures were adopted through either the ordinary or the special legislative procedures that recognize a decision-making or consultative role to the EP, but it is also true that the deepening of the euro crisis has led to new Treaties that do not recognize the EP as a policy-making actor. Certainly, it was difficult to identify a role for the EP (which represents the citizens of the EU) in new organizations set up by not all the member states of the EU (Hefftler and Wessels 2013). In sum, in the aftermath of the financial crisis, a restructuring of the traditional equilibrium between supranational and intergovernmental constitutional regimes in favour of the latter has taken place. With the euro crisis, the decision-making barycentre has moved toward the relation between the European Council (and the Euro Summit) and the ECOFIN Council (and the Euro Group of the economic and financial ministers of the euro-area member states), rather than toward the relation between the Commission and the EP (as it was during Delors’s years of building the single market, between 1985 and 1994). Also the compromise between the UK (and more in general the exEFTA area) and the EMU member states has been upset by the euro crisis. The two new Treaties (ESM and Fiscal Compact) were established outside the legal order of the Treaty of Lisbon because of the difficulties encountered by the intergovernmental constitution in solving the veto dilemma. The objectives that were set out under those Treaties could have been attained through an amendment to the Treaty of Lisbon (or even through secondary EU law). However, the euro-area leaders chose to resort to international Treaties for neutralizing the veto threatened by the UK government. Indeed, in order to prevent future veto threats, those Treaties set up new organizations where unanimity is no longer needed for decision making. The Fiscal Compact has even established (title VI, article 14.2) that, to enter into force, it requires the approval of twelve out of the then seventeen euro-area member states (and out of the twentyfive member states signing it). Similarly, the disciplining powers of third institutions (like the Commission and the ECJ) have been strengthened.

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But the role of national constitutional courts has also been strengthened (F. Fabbrini 2014). The Commission’s intervention on a contracting party that disrespects the agreement is now quasiautomatic, an automaticity that can be neutralized only by a reversed qualified majority of the financial ministers of the signatory member states (Fiscal Compact, article 17). Furthermore the Fiscal Compact requires the contracting parties to introduce the balanced-budget rule at the constitutional level (or equivalent), thus limiting also from within the domestic system the possibilities for noncompliance. The new Treaties, however, raise crucial constitutional problems. If recourse to the ECJ is justifiable by the Treaty of Lisbon itself, the same cannot be said for the power given to the Commission to intervene automatically with respect to the noncompliant contracting party. Not only is the Commission constituted by commissioners proposed by member states that do not adhere to those Treaties (the UK and the Czech Republic), but above all the Commission is an institution representing the collective interests of a different organization. Moreover, the two Treaties exclude the EP from the policy making process, although that is the institution that represents the voters who will be directly affected by intergovernmental decisions. The formation of new legal orders outside the Treaty of Lisbon, although not incompatible with the latter (De Witte 2012), necessarily calls into question the constitutional compromise between the EMU and the opt-out member states, the UK in particular. With the Fiscal Compact, the large majority of member states will come to coordinate their economic, fiscal, and budgetary policies, leaving on the margin only the UK (the Czech Republic, which refused to sign the Treaty in 2011, is now reexamining its position). Moreover, the UK is also outside of the Euro Plus Pact, a political commitment (a sort of intergovernmental agreement) between the euro-area member states and several non-euro-area ones (as Denmark, Poland, Lithuania, Bulgaria, Romania, and Latvia, which entered the euro area in January 2014) aimed to foster stronger economic policy coordination between them. Certainly, the Fiscal Compact declares (article 16) that “within five years at most following the entry into force of this Treaty, on the basis of an assessment of the experience with its implementation, the necessary steps shall be taken . . . , with the aim of incorporating the substance of this Treaty into the legal framework of the European Union,” as already happened with the Schengen Agreement. The integration process would come to be regulated again by a single legal framework, with functional internal differentiations concerning specific policies. However, for this incorporation to take place, the consent of the UK will be required, an unlikely outcome, given that the treaty’s clauses would continue to affect London’s financial district negatively, as it would have done at the moment of its opposition to the Treaty of Lisbon’s amendment. Indeed, the UK and the EMU member states have come to acknowledge that their

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economic and monetary interests diverge. The economic community’s view has shown to be incompatible with the need to govern the euro. The new organization set up by the Fiscal Compact has made evident this reality. The most crucial decisions have been taken in the meetings of the governmental leaders of the member states adopting the euro (Euro Summit), with the pre-ins and the outs member states informed only later about their content, a situation that will incentivize the pre-ins (or at least the bigger ones, such as Poland) to accelerate the adjustment of their economies for adopting the euro, leaving the outs (and the UK in particular) further isolated. Finally, the third compromise (between a centralized monetary policy and nationalized economic policies) has not held up in the course of the euro crisis. Constrained by the intergovernmental constitution, the voluntary coordination of national policies has been unrelentingly challenged by its internal dilemmas (S. Fabbrini 2013a). The answer to those difficulties has been a further judicialization of the governance of the euro area, through the formalization of stricter macroeconomic and budgetary rules to be respected by the signatory states. Financial aid to member states that are unable to respect those requirements has been accompanied by rules of conditionality that have led to the downsizing of their decision-making autonomy. National independence has been unevenly restructured, with the debtor member states becoming less autonomous than the creditor member states for their inability to control the externalities of their policies. Within the European Council (and the Euro Summit), a decision-making hierarchy has emerged under the form of a German-French (and then only German) directorate of the financial policy of the Union. With the coordination of the Brussels office of the European Council president, the financial strategy for dealing with the crisis came to be dictated by Berlin and Paris agreeing not only on the strategic goals and the policies to achieve them. The German-French directoire, and then the growing German unilateral leadership of the euro area, have led to an unprecedented split between northern and southern member states. If the euro was adopted in the first place for preserving a European Germany, the euro crisis has brought about the opposite effect, that is, the emergence of a German Europe. Instead of giving the euro area an autonomous budget and legitimate political authority for dealing with the crisis, the outcome has been a convoluted imposition of rules aimed at preventing any political discussion on the policies to pursue (in coherence with the ordo-liberal economic tradition elaborated already in the 1930s by the Freiburg School, Young 2012). The assumption that it would have been possible to govern the common currency through the logic of voluntary policy coordination has been dramatically unmasked by the euro crisis.

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4. AFTER THE EURO CRISIS: POLITICAL AUTHORITY FOR THE EURO AREA With the multiplication of treaties, the EU has gone beyond the paradigm of differentiated integration that helped to accommodate the various needs of its participants within a unitary project. The euro crisis has made evident what emerged already during the constitutional debate of the 2000s: namely, the divisions within the EU concern different views of the Union (Piris 2012), not just different speeds in participating in it. The formation of different legal orders has made clear that there is more than one union within the EU, not just a multispeed Europe. If going back to the status quo ante is not a viable option, then a different paradigm should be considered for dealing with the constitutional disorder. A paradigm based on the recognition of the inevitable institutional separation between the single market and the common currency (that should then be reconnected through a looser treaty), on the necessity to recompose supranational and intergovernmental interests through a different institutional architecture, on the need to separate the governance of the common currency from the judicialization of economic policy. The euro area should be the basis for a redefinition of a new union. It should benefit from a budget expressing its independent fiscal capacity (along the lines convincingly proposed by Maduro 2012) and should be governed by a legitimate and effective governmental authority. Any strategy for promoting that political authority has to face the problem of setting up an institutional structure for the euro area out of the current institutional structure of the EU. This redesign might be more easily made regarding the intergovernmental institutions (which are already differentiating themselves between the European Council and the Euro Summit or the ECOFIN Council and the Euro Group), much less so regarding the institutions (such as the Commission, the EP and the Court of Justice) that represent the EU interests at large. A solution will have to be found to avoid the duplication of institutions (a euro Commission, a euro Parliament, a euro ECJ). For now, I continue to consider those institutions at their face value, as they are. Indeed, we should be discussing the institutions of a euro union and a non-euro union. I call the first one the “new” union. Thus, which political authority might be constructed for the new union of the euro area? The main answer has been the “parliamentary union” (Crum 2013; Schmidt 2012; Majone 2009; Hix 2008, inter alia). The Commission should be located at the centre of the decision-making system (from which it was excluded during the euro crisis) and, along with it, the role of the EP should be strengthened as the main institution conferring political legitimacy (through its power to approve or dismiss the Commission) to the Union’s executive. The effectiveness of the former and the legitimacy of the latter would constitute the democratic equation of the new union. The

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logic proper of this strategy can already be activated with the 2014 EP’s elections. Indeed, the main political parties proposed their respective candidates for the Commission president, with the aim of transforming those elections into the arena for politicizing the Union’s policy choices (Poguntke 2013). The task of the European Council and its president would be to formalize a decision made by voters and institutionalized by their parliamentary representatives. The European Council will have to step back to its traditional role of setting the strategies of the organization. At the same time, the Council should act as the chamber representing member states’ governments, without politically affecting the functioning of the new union’s executive. The new union would have its government (the Commission), its head of government (the president of the Commission) and (inter alia) its treasury secretary (its commissioner for economic and financial affairs). At the same time, being the expression of parliamentary elections and supported by the parliamentary majority, the Commission and its president and commissioners would have the legitimacy to mobilize the new union’s autonomous resources. Through the politicization of EP elections, voters would have the possibility to discuss and deliberate on the policies to pursue. The ECB would finally be checked by a political government. And the judicial review powers of the ECJ should be extended to cover all the policy areas of the new union. Although this strategy is clear and familiar, it has its counterarguments. The Union will have difficulty in becoming a federal parliamentary union because it is based on states that are asymmetrically correlated (S. Fabbrini 2013b). The puzzle the new union will have to resolve (in order to survive and consolidate itself) is as follows: how to keep together in a single political system member states with millions of inhabitants and member states with a few hundred thousand inhabitants. Turning the new union into a parliamentary system means transforming the EP into an institution with the exclusive prerogative of forming a government. But if that is so, then the voters of the larger member states will have a much greater weight in determining the outcome than the voters of smaller member states. Unless, of course, the elections are run on a transnational basis, which would require (first) that the main divisions within all member states are between the same parties and (second) that those divisions are politically homogeneous. But this is not the case, nor could it be. In a union of states, in addition to partisan cleavages, the divisions between member states and regional areas are the most significant, as shown by the split between northern and southern member states induced by the euro crisis. It is reasonable to assume that, given the asymmetry of the new union, the parliamentary perspective will meet high resistance from small- to medium-sized member states. In sum, the parliamentary perspective of the union aims to turn the intergovernmental union upside down: if the latter has tried to downsize the decisionmaking role of the supranational institutions, the former will not let the

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intergovernmental union play a significant role either. A difficult endeavour in a union constituted by very powerful and rooted nation states, with the capacity to resist any marginalization of their role. A different strategy might be considered, the strategy of the “compound union.” 3 Based on current institutional developments (Nicolaїdis 2013; De Schoutheete and Micossi 2013; Kreppel 2011; Shackleton 2005, inter alia), this institutional strategy aims to make the new union a fully separated system of government. A system of separation of powers has been the historical answer to the problem of compounding states of different sizes, capabilities, and cultures within a federal union. A federal union, not a federal state, because the separation of powers system does not require the existence of a common demos, indeed it would rather foster the preservation of separate demoi. The asymmetries and differences between states have been tamed by the institutionalization of a decision-making system diffusing decision-making power among institutions rather than concentrating it in only one institution. That means that the European Council and the Commission, the EP and the Council, should have their own source of legitimacy (none should be dependent on the confidence of the others), operate according to different timeframes, be accountable to different electorates, and, at the same time, be obliged to share the exercise of decision-making power. Nothing would prevent the combining of the roles of the presidents of the European Council and the Commission into a single office, granted that its holder is not elected by the EP. However, the euro crisis has probably made the transformation of the European Council into an executive institution irreversible, although it has also shown that the president is unfairly conditioned by the heads of state and governments of the larger member states in particular. However, there is also a good argument for keeping the dual executive as it is: namely, the need to guarantee a role for the government leaders of the member states. Moreover, politicizing the election of the European Council president would allow the Commission to carry out administrative and judicial functions above the fray. There are different ways to politicize the election of the European Council president. What matters is that those elections should affect the decision-making logic of one institution, not the entire union. At the same time, EP elections should also be politicized. Two different areas of politicization should thus be available to voters and citizens. The separate formation of the EP and the European Council president, with the Commission formed (as it is now) through the interlocking of the two institutions (and the Council playing its legislative role separate from the European Council), guarantees that each member state will not be swallowed up by the larger or more powerful member states. In a multicentred system, each member state would have many areas at its disposal for making its voice heard. The effectiveness of the decision making will be promoted by the European Council president supported by the Commis-

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sion. It should be the duty of the Commission, rather than the General Secretary of the Council, as it is now, to prepare the periodic meetings of the European Council and to structure its deliberations. The legitimacy of the policy-making process will be guaranteed by the role recognized for the EP and the Council in the latter. The dual executive would have the power of legislative initiative, however this power should also be recognized for the bicameral legislature. The EP’s most critical role should be the approval of the new union’s budget, on the basis of the proposals coming from the dual executive but also those emerging within it. Both the executive and the legislature should have a relative veto power in order to oblige each institution involved in the decision-making process to take into consideration the preferences of the other institutions. Here the conflict would be between institutions, not only between parties. This system also has its counterarguments. It could generate policy stalemates if the separate institutions express different views and are unwilling to negotiate and compromise. A separation of powers might obfuscate responsibility for the outcomes of particular decisions. The larger member states might offer resistance to a system aimed at constraining their influence. Inevitably any union trying to keep asymmetric and differentiated states balanced, any project of federalizing nation-states, 4 will be characterized by imperfection. CONCLUSION In order to escape from the euro crisis and its constitutional implications, a new paradigm concerning the process of integration must be defined. It requires the surrender of the unitary and expanding project of integration, without sacrificing its main achievement, that is, the single market. It requires recognition of the existence of multiple unions, thus connecting them in an original way. 5 The new union of the euro area should be organized according to an original system of the separation of powers able to guarantee effectiveness and legitimacy to its government of collective problems through independent budgetary and regulatory resources. Recognizing a proper role in the decision-making system for both member-state governments and their citizens, thus compounding them in a separation of powers architecture, the new union will have the chance to overcome the paralysing contrast between supranational and intergovernmental views. At the same time, endowing the new union with the resources and capabilities for developing policies independent of member states will give the separate political authorities the means for governing the union. In short, the euro crisis has opened the possibility of looking for a new institutional perspective, able to go beyond intergovernmental and supranational views, on the future of Europe, a perspective that recognizes the need of combining supranational and inter-

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governmental institutions and interests in an institutional architecture based on the original implementation of the principle of separation of powers. BIBLIOGRAPHY Baun, Michael J. 1995–1996. “The Maastricht Treaty as High Politics: Germany, France, and European Integration.” Political Science Quarterly 110/4: 605–24. Bickerton, Chistopher J. 2010. “Une Europe Neo-Madisonienne? Pouvoir Limité et Légitimité Démocratique.” Revue Française de Science Politique 60/6: 1077–90. Caporaso, Jim A., and Joerg Wittenbrinck. 2006. “The New Modes of Governance and Political Authority in Europe.” Journal of European Public Policy 13/4: 471–80. Closa, Carlos. 2012. “Institutional Innovation in the EU: The ‘Permanent’ Presidency of the European Council.” In The EU’s Treaty of Lisbon, edited by F. Laursen. Burlington, VA: Ashgate. Craig, Paul. 2010. The Treaty of Lisbon: Law, Politics and Treaty Reform. Oxford: Oxford University Press. Crum, Ben J. J. 2013. “Executive Accountability in the European Union.” Paper delivered at the EUSA Thirteenth Biennial Conference, 9–11 May, Baltimore. Delors, Jacques. 2012. “Visions d’Europe: Perspectives et priorités pour l’Union Européenne.” Conférence Mouvement Européen France, 6 July, Palais du Luxembourg, Paris. Dehousse, Renaud, ed. 2011. The “Community Method”: Obstinate or Obsolete? New York: Palgrave Macmillan. De Schoutheete, Philippe. 2011. “Decision-making in the Union.” Notre Europe policy brief 24, April. De Schoutheete, Philippe, and Stefano Micossi. 2013. “On Political Union in Europe: The Changing Landscape of Decision-making and Accountability.” Centre for European Policy Studies Essay 4, 21 February, Brussels. De Witte, Bruno. 2012. “European Stability Mechanism and Treaty on Stability, Coordination and Governance: Role of the Institutions and Consistency with the EU Legal Order.” In Challenges of Multi-tier Governance in the European Union: Effectiveness, Efficiency and Legitimacy. Brussels, European Parliament, Directorate General for Internal Policies: 78–84. Dyson, Kenneth, and Lucia Quaglia. 2010. European Economic Governance and Policies. 2 vols. Oxford: Oxford University Press. Dyson, Kenneth, and Angelos Sepos, eds. 2010. Which Europe? The Politics of Differentiated Integration. New York: Palgrave Macmillan. Eggermont, Frederic. 2012. The Changing Role of the European Council in the Institutional Framework of the European Union. Cambridge: Intersentia. Fabbrini, Federico. 2014. “The Euro-Crisis and the Courts: Judicial Review and the Political Process in Comparative Perspective.” Berkeley Journal of International Law 32/1, forthcoming. Fabbrini, Sergio. 2010. Compound Democracies: Why the United States and Europe Are Becoming Similar. Revised and updated edition. Oxford: Oxford University Press. Fabbrini, Sergio. 2013a. “Intergovernmentalism and Its Limits: Assessing the European Union’s Answer to the Euro Crisis.” Comparative Political Studies 46/ 9: 1003–29. Fabbrini, Sergio. 2013b. The Parliamentary Election of the Commission President: Constraints on the Parliamentarization of the European Union. Working paper, Luiss School of Government, SOG-WP9/2013 ISSN: 2282-4189. Hefftler, Claudia, and Wolfgang Wessels. 2013. “The Democratic Legitimacy of the EU’s Economic Governance and National Parliaments.” IAI Working Papers 13, 13 April, Rome.

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Heipertz, Martin, and Amy Verdun. 2010. Ruling Europe: The Politics of the Stability and Growth Pact. Cambridge: Cambridge University Press. Heritier, Adrienne, and Martin Rhodes, eds. 2010. New Modes of Governance in Europe. London: Palgrave Macmillan. Hix, Simon. 2008. What’s Wrong with the European Union and How To Fix It. Cambridge: Polity. Issing, Otmar. 2008. The Birth of the Euro. Cambridge: Cambridge University Press. Jabko, Nicolas. 2006. Playing the Market: A Political Strategy for Uniting Europe, 1985–2005. Ithaca, NY: Cornell University Press. Kohler-Koch, Beate, and Berthold Rittberger. 2006. “The ‘Governance Turn’ in EU Studies.” Journal of Common Market Studies 44: 27–49. Kreppel, Amie. 2011. “Looking ‘Up,’ ‘Down’ and ‘Sideways’: Understanding EU Institutions in Context.” West European Politics 34/1: 167–79. Laursen, Finn, and Sophie Vanhoonacker, eds. 1992. The Intergovernmental Conference on Political Union: Institutional Reforms, New Policies and International Identity of the European Community. Maastricht: European Institute of Public Administration. Maduro, Miguel Poaires. 2012. “A New Governance for the European Union and the Euro: Democracy and Justice.” In Challenges of Multi-tier Governance in the European Union. Effectiveness, Efficiency and Legitimacy. Brussels, European Parliament, Directorate General for Internal Policies: 27–50. Majone, Giandomenico. 2009. Europe as the Would-Be World Power. Cambridge: Cambridge University Press. Martin, Andrew, and George Ross, eds. 2004. Euro and Europeans: Monetary Integration and the European Model of Society. Cambridge: Cambridge University Press. Nicolaїdis, Kalypso. 2013. “European Democracy and Its Crisis.” Journal of Common Market Studies 51/2: 351–69. Page, Edward C. 1997. People Who Run Europe. Oxford: Clarendon Press. Piris, Jean-Claude. 2010. The Treaty of Lisbon: A Legal and Political Analysis. Cambridge: Cambridge University Press. Piris, Jean-Claude. 2012. The Future of Europe: Towards a Two-Speed EU?. Cambridge: Cambridge University Press. Poguntke, Thomas. 2013. “Electing the President of the European Commission?” Report for the Foundation of European Progressive Parties, mimeo. Schmidt, Vivien A. 2012. “Democracy and Legitimacy in the European Union.” In The Oxford Handbook of the European Union, edited by Erik Jones, Anand Menon, and Stephen Weatherill. Oxford: Oxford University Press: 661–75. Shackleton, Michael. 2005. “Parliamentary Government or Division of Powers: Is the Destination Still Unknown?” In With US or Against US? European Trends in American Perspective, The State of the European Union: Volume 7, edited by Nicolas Jabko and Craig Parsons. Oxford: Oxford University Press: 123–41. Young, Brigitte. 2012. “The German Debates on European Austerity Programs: The Ideas of Ordoliberalism against the Rest of the World,” mimeo.

NOTES 1. The European Free Trade Association (EFTA) was created in 1960 by seven countries as a looser alternative to the then European Economic Community (EEC). It was heir to the Free Trade Area (FTA), a project pursued by the UK between 1956 and 1958. The EFTA as a trade bloc was established by the Stockholm Convention held on 4 January 1960 in the Swedish capital. The founding members of EFTA were Austria, Denmark, Norway, Portugal, Sweden, Switzerland and the UK. During the 1960s, these countries were often referred to as the Outer Seven, as opposed to the Inner Six of the then EEC. Most of its membership has since joined the EEC and then the EU. At the end of 2012, EFTA was constituted by four countries: Iceland, Norway, Switzerland and Liechtenstein.

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2. The Schengen Agreement is a Treaty signed on 14 June 1985 in the town of Schengen in Luxembourg, by five of the then nine member states of the EU (then called the EEC). It was supplemented by the Convention implementing the Schengen Agreement five years later. The agreement, Convention and rules were implemented in March 1995. Together these treaties created Europe’s borderless Schengen area, which operates as a single area for international travel with external border controls for those travelling in and out of it, but with no or minimal internal border controls. The Schengen Agreement and the rules adopted under it were, for the EU members of the agreement, entirely separate from the EU legal order until the 1997 Amsterdam Treaty, which incorporated them into EU law. The borderless area created by the Schengen Agreements, at the end of 2012, consisted of twenty-five EU member states (Ireland and the UK having opted out to remain outside). In addition, four non-EU member states (Iceland, Liechtenstein, Norway and Switzerland) are members of the borderless area, and three European microstates (Monaco, San Marino and the Vatican City) do not have any immigration controls with the Schengen countries. 3. I elaborated the model of the compound union in S. Fabbrini (2010). For a critical review of the theoretical approaches supporting this strategy, defined as “NéoMadisonienne,” see Bickerton (2010). 4. In a 2012 speech, Jacques Delors began to introduce the “federation of nationstates” as the institutional philosophy, and he ended by pleading for “a good compromise between the community method and the intergovernmental method.” 5. In a speech given to the Nordic-Baltic Ambassadors, Lord Owen (2011) proposed setting up a Non Euro Group (NEG) whose eleven members, chaired by the president of the European Council, “would be able to adjust their currency exchange rates . . . to establish their own corporation tax levels, their own fiscal regimes and their own monetary policy governed by their own central bank.” This would reflect “an existing reality that there are at present two groupings in relation to currency management within the EU—an informal Euro Group and an informal Non Euro Group. . . . The EU is a mixture of the intergovernmental and the supranational. The mix will probably evolve in both directions.”

TWO The Transformation of Macroeconomic and Fiscal Governance in the EU Carlos Closa

From 2008 to 2013, the EU approved various regulations of different sizes that were meant to provide an urgent response to the fiscal (and macroeconomic) crisis that the EU and its member states had been experiencing since the first of those years. These regulations consist of three treaties, two ad hoc mechanisms and two sets of regulations (the Six and Two Packs) that have profoundly transformed macroeconomic and fiscal governance in the EU. This chapter develops the following thesis: the reform of macroeconomic and fiscal governance of the EU since 2010 has led to profound change in the constitutional and institutional substance of both policies and represents a true constitutional mutation (Jellinek 1991; see also Tuori 2013). There have been four types of changes: on the one hand, the fragmentation and differentiation of the legal structure of these policies, while still maintaining institutional coherence as well as coherence in policy substance. Secondly, the change has meant the Europeanization of German preferences in macroeconomic and fiscal matters or, if one prefers, the Germanization of the governance of the euro. One essential component of these preferences is the petrification in primary legislation of certain options of macroeconomic and fiscal policies, which, in turn, provokes a “constitutional mutation” limiting the possible development of the “social constitution” (which, on the other hand, is restricted to the national realm). Lastly, the change is finalized with “agency-itis” in the model of governance: assigning increasing responsibilities to depoliticized organizations to the detriment of political organizations 37

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(i.e., parliaments, both national parliaments and the EP itself). This chapter examines these four changes to conclude that the EU has altered its constitution and the constitution of the member states, and this transformation will have unpredictable effects. 1. THE INCREASE IN FRAGMENTATION AND INTERNAL DIFFERENTIATION The rules establishing changes in macroeconomic and fiscal governance are spread throughout various instruments of a distinct nature: the European Financial Stability Facility (EFSF); the European Financial Stability Mechanism (EFSM); the (nonbinding) Euro Plus Pact; the amendment to article 136 of the TFEU; the Treaty on Stability, Cooperation and Governance (TSCG); the Treaty of the European Stability Mechanism (TESM); and the legislation derived from reforming the Stability and Growth Pact and expanding macroeconomic and fiscal controls (the Six Pack and Two Pack). The fragmentation of the legal order is not something new for the EU, whose constitution has been constructed in “bits” and “pieces” (Curtin 1993). Furthermore, it is a relative fragmentation, since there are formal connections between the different Treaties. The formal connections refer to the mechanisms of legal connection between the different instruments. Thus, the reform of article 136 of the TFEU opened the door for the creation of the TESM and made previous funds (EFSF, EFSM) entirely accepted. The ECJ denied the connection between the TFEU and the TESM, arguing in the Pringle case that “Member States remain free to establish a stability mechanism such as the ESM, provided however that, in its operation, that mechanism complies with European Union law and, in particular, with measures adopted by the Union in the area of coordination of the Member States’ economic policies.” 1 Obviously, arguing for formal separation between instruments is an exercise in formalism more than a true representation of the substance of the relationships between them. In addition, there are formal connections between them: the ratification of the TSCG is an essential requirement for a state to be eligible to receive funds from the TESM in the future, and the TSCG includes a mandate to fuse with the TEU within 5 years. Although it has been argued that the new instruments introduce legal inconsistency (Bianco 2012), their fragmentation does not actually imply inconsistency because, in spite of appearances, all the instruments maintain a strong coherence both to the institutions that are charged with different functions of governance and to the options of substantive policies, where each of them completes and complements the others. Thus, in substantive terms, the Six Pack contains much of the substance of the TSCG; although the TSCG has innovated in some key areas, such as the important modification of limits to the deficit which should be in balance

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or in surplus (in the face of the SGP tendency toward balance) and signatory states’ explicit commitment to respect the Commission’s recommendations. The Euro Plus Pact anticipated some of the measures contained in the Six Pack and Two Pack, while the corrective and punitive components of the TESM (surveillance and sanctions in relation to macroeconomic imbalances) have been incorporated into the Two Pack. Finally, in institutional terms, in spite of impressions to the contrary, there has been no innovation; this has been concentrated in the TESM. In short, the new Treaties, regulations and leadership create the equivalent of a type of “block of constitutionality” regarding macroeconomic and fiscal governance. Therefore, fragmentation has not provoked inconsistency nor is it a novelty. But the new regulations (the combination created by extra-EU treaties and regulatory Packs to EU secondary law) do create a strong differentiation between the “euro” nucleus and the non-euro periphery. Furthermore, one could speak of a series of concentric circles determined by the degree of commitment to these rules. Thus, in the first place, euro members have ratified the TSCG and the TESM and they fall under the enhanced rules of the Six Pack and the Two Pack (specifically designed for euro members). The contractual agreements for negotiations are obligatory for euro members and voluntary for other EU members. Placing Eurozone membership as the hypothetical centre, the second circle would be composed of states that do not have an opt-out (in other words, states that should adopt the euro in the future). Out of this group, Romania has signed the complete TSCG, while Latvia, Lithuania, Hungary, Poland and Sweden have signed only Title V (related to economic governance). At least the first four should move into the first circle at some point, while Swedish exceptionality places it, in reality, in a third circle with Denmark (which, although it has been granted an exception, has nevertheless signed the totality of the TSCG). Finally, the fourth circle is made up of the United Kingdom and, perhaps, the Czech Republic. The United Kingdom possesses an explicit opt-out and has not signed the TSCG. The Czech Republic does not have an explicit opt-out, but various governments have questioned future Czech adhesion to the euro. It has not signed the TSCG either. To combat internal differentiation in a flexible manner, the TSCG maintains an expansion mechanism that allows any EU member state to be admitted to the Treaty (article 15). Again, the internal differentiation is nothing new; both the Schengen Agreement and the Prüm Convention precede it, as do the opt-outs of the United Kingdom and Denmark regarding the euro or the United Kingdom and the Czech Republic on the charter. What is novel is that this new and increased internal differentiation has for the first time necessarily allowed the real possibility of formalizing differentiation as official doctrine of the institutions. Both the Van Rompuy Task Force (VRTF) (Van Rompuy 2012) as well as the November 2012 Commission Plan

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(European Commission 2012) argue that the Eurozone should be able to move toward an integration that is faster and deeper than other European states while simultaneously remaining open to non-euro member states. This plan has become the revolutionary proposal of the Future of Europe Group (2012) for approving revisions to the Treaties by supermajorities of states and populations. These revisions would only be in force for the states that ratified them. Thus, the form in which the euro states have sought institutional solutions, that is, solutions through non-EU treaties, has undermined the veto as a regulated element of the EU’s ability for formal transformation. This has coincided with the Eurosceptic offensive launched by the British Conservative–Liberal Democrat government, which at first limited itself to the creation of the “referendum lock” but has later intensified into discussions of the possibility of Britain leaving the EU or, at least, the renegotiation of British status, meaning the repatriation of some powers. While they are important, the formal changes that have provoked the fragmentation of EU legal structure and growing internal differentiation are in no way the most detrimental results for European governance coming out of the answers given to the crisis. The most obvious consequence of the response to the crisis and the changes in macroeconomic and fiscal governance has been the substantive mutation of policies in those two areas, both at the European level as well as the national level. The bibliography has described the content of those changes extensively (Menéndez 2012); from the point of view of this chapter, it is more interesting to see how the transformation has taken place. The following section specifically describes this point. 2. EUROPEANIZATION OR GERMANIZATION OF MACROECONOMIC AND FISCAL POLICY The development of policy at the European level has been habitually described with the term Europeanization, which has been used to describe both top-down processes of transferring European policies to the national level as well as bottom-up processes of carrying national preferences or policies to the European level. Although these are analytically different activities, theoretical approaches tend to blur them (Closa 2006). The reform of macroeconomic and fiscal governance between 2008 and 2013 specifically shows both processes acting simultaneously. More precisely, in the area of fiscal rules, we have seen the transfer of both the substantive content and the institutional guarantee mechanisms of German fiscal and macroeconomic policy, just as they were constructed in that country, to the European order. The content of the rules reflects the hegemonic position of (and inside) Germany more than a collective agreement. The content is inspired in the

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doctrine of German ordoliberalism (Guérot and Dullien 2012), one of whose central tenets is the rejection of the use of fiscal and monetary policies as contracyclical stabilizers. These ordoliberal principles enjoy a broad consensus among German political parties (from the CDU-CSU to the SPD, and also including the FDP) and economists. In fact, it was a Social Democratic politician, Peer Steinbrük, who promoted reforms to the German constitution in 2009 to introduce the 0.35 per cent limit to the structural deficit. On the other hand, an appeal to the “stability culture” always finds resonance in German public opinion (Howarth and Rommerskirchen 2013). The consensus around these “ordoliberal” principles helps us understand the perception that the political and economic class, the media, and the public in Germany have of the crisis: the periphery’s deficit and debt crisis stems from excessive expenditures on the part of irresponsible governments that are exploiting low Eurozone interest rates. Commercial imbalances, on the other hand, result from the loss of competitiveness and excessive consumption in those countries. During the crisis, Angela Merkel repeatedly presented the crisis as the result of wasteful governments that “live beyond their means” or that manage finances in an unsustainable fashion (Merkel 2011). If the euro does contain economies based on two different modalities of capitalism, one based on exports and domestic savings and another based on internal consumption, both of which have supporting economic doctrines (Hall 2012), the solution to the crisis has solidified the ordoliberal position. Furthermore, this solution rests on a powerful moralizing discourse directed toward the southern states (Beck 2013). The consensual nature of this doctrine in Germany can be seen in the terms of the Coalition Agreement of the CDU/CSU-SPD created at the end of 2013. While the document admits that the causes of the crisis are “varied” and extend beyond excessive expenditures, when referring to the lack of competitiveness, imbalances and design defects of the EMU that led to problems in the financial markets, the agreement clearly reflects SPD support for its position that debt should not be mutualized and that each state should be responsible for itself. Fiscal discipline continues to be a priority, although it is combined with a vague promise of “European solidarity.” TESM loans are only possible if the stability of the Eurozone is threatened and if the Bundestag is in agreement and if strict measures to consolidate the budgets of state recipients are met. With these antecedents, it is not surprising that many of the changes to European economic governance simply replicate German preferences. Thus, the German government favoured greater automatism in monitoring and sanctioning mechanisms. In fact, the original design of the Stability and Growth Pact by German finance minister Theo Waigel in 1995 foresaw automatism in the application of sanctions for states that did not fulfil deficit and debt requirements (Collignon 2004). In the 2010–2013

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reforms, this preference for the automatism of controls and sanctions was reflected in two areas. On the one hand, the German government warned that euro members, debtor countries in particular, should include an automatic brake for public deficits as well as a guarantee of the priority of debt payment in national budgets and that both (the brake and the guarantee) should be introduced on a constitutional level. Moreover, the German government wanted this commitment to derive from an intentional treaty, which explains why they pursued with determination either reform of the TFEU or an alternative that did not apparently add much to the Six Pack itself: the TSCG or Fiscal Compact. For that reason, the existence of the TSCG owes a great deal to the German government’s insistence on creating a formal legal commitment to those principles. In fact, the German government was aiming toward a more binding instrument that would have further limited the constitutional autonomy of the states: by “Europeanizing” its own constitutional provisions, the German government wanted the TSCG to require signatory states to explicitly assign to their national constitutional courts the verification of the fulfilment of these obligations in agreement with criteria that would be introduced into each state constitution. To incentivize the approval of the TSCG and the internal changes that it required, the German government made any change in formal guarantees conditional upon the promise of assistance being strictly bound to the commitment to strict rules of fiscal discipline (Kreilinger 2012). In this way, the ratification of the TSCG is a necessary condition to accessing the emergency funds created through TESM. On the other hand, the German government also imposed its preference for a more automatic sanctioning mechanism in negotiations for the Six Pack, although in this case, other actors coincided in this preference. In fact, the coalition that supported the enhancement of automatism is, prima facie, somewhat surprising: the governments of Germany, the Netherlands and the United Kingdom as well as the Commission and the EP were in favour of automatic fines, while the governments of France, Spain and Italy advocated more political discretion (Spiegel and Hall 2010). What is interesting is that the German preference for automatism created a dilemma for them in the election of adequate institutions for the execution of changes in macroeconomic and fiscal governance. The “Union method” that Merkel (Merkel 2010) defended downgraded the Commission’s political role, and Merkel has always maintained that the Commission does not need any additional power and that the national governments should be the ones to cooperate on economic matters (Merkel 2013). In fact, the German government showed its displeasure (Waterfield 2011) with some of the Commission’s proposals, such as, for example, the suggested creation of “stability bonds” to help all Eurozone members satisfy their financial needs and to compete with US treasury bonds as a global standard (European Commission 2011).

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In part at least, German government demands stemmed from the existence of powerful national groups that restricted their maneuverability at the European level. In particular, the German constitutional court made four rulings related to fiscal and macroeconomic policies in just under twelve months. 2 The rulings construct an interpretation of the institutional mechanisms of European governance and sanction the “Germanization” of macroeconomic and fiscal policies. Regarding the first point, the court has systematically reiterated the need for parliamentary participation in budgetary decisions (see section 5.2). As for the second, the court has been concerned with eliminating any amount of discretion when it comes to contributing to the funds and, particularly, to TESM. In its ruling on this issue, the German Federal Constitutional Court declared that the limit of German contributions should coincide with those established in the Annex to the Treaty and that this limit could not be exceeded without explicit approval on the part of the German representatives to the TESM. But much more importantly, the Constitutional Court has used all these opportunities (beginning even with the Maastricht ruling) to construct an interpretation of the macroeconomic and monetary model of constitution stemming from the Basic Law. For example, in the ruling about the TESM, Germany’s Constitutional Court argued that: The current program of European integration designs monetary union as a community of stability. As the Federal Constitutional Court has emphasized various times (see BVerfGE 89, 155 [205]; 97, 350 [369]; 129, 124 [181–182]), this is the fundamental basis for the German Federal Republic’s participation in the monetary union. The Treaties are parallel to the obligations of article 88, subsection 2 of the Basic Law, and also article 14 (1) of the Basic Law, which makes the observance of the independence of the Central European Bank and the primordial objective of price stability permanent constitutional obligations for German participation in the monetary union (see Article 127 (1), article 130 of the TFEU). This parallelism operates not only regarding the stability of the currency; other central provisions about the design of the monetary union also safeguard (German) constitutional requirements of European Union law. This is applied in particular to the prohibition of monetary financing on the part of the Central European Bank, the prohibition on accepting liability (the no-bailout clause) and the criteria of stability for budget management (articles 123 to 126, article 136 of the TFEU, see BVerfGE 129, 124 [181]).

The German Constitutional Court’s efforts to shape European macroeconomic and fiscal governance have tried to extend to the regulation of ECB behavior. In the (preliminary) ruling on the TESM, the court noted the possible unconstitutionality of the program of Outright Monetary Transactions (buying debt) although this had nothing to do, strictly speaking, with TESM. In this way, the Constitutional Court tacitly invited an appeal. The question could present the Court with a dilemma, since

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the Bundesbank itself has opposed the program of OMT, 3 arguing that if the ECB incurred significant losses, it could go bankrupt. But on the other hand, the Constitutional Court has no direct jurisdiction over the ECB (although it may believe that the program violates the terms and conditions of German participation in the EU). Even though the program has not effectively been put into practice, a challenge to its legality would specifically destroy its greatest strength: the credibility that it could be used to intervene in secondary markets if any government were at risk of bankruptcy. Locked in this dilemma, the Constitutional Court decided in November 2013 to postpone the decision. Traditionally, Europeanization has sought to transfer internal policies to the European level to create powerful external restrictions on policies for those states that “Europeanize.” In this case, the objective has been to transfer a particular macroeconomic and fiscal model to the European level in order to make it descend and impose it on other states, which Ulrich Beck has called an accidental empire (2013). If the general adaptation mechanism has historically been goodness of fit (or compatibility), in this case, incorporation to the internal realm has had a lot more to do with the financial solvency of each state. Furthermore, as we will discuss in the following section, both substantive preferences and the system that has been adopted follow German dictates. Thus, the model of the German fiscal constitution has been transferred to the EU through the TSCG and back to the national constitutions, and this has occurred in a particularly pointed way in the constitutional “petrification” that will be discussed in the following section. 3. THE PETRIFICATION OF POLITICAL OPTIONS Every political system establishes a balance or trade-off between constitutionalized rules and what is left in the hands of the legislators. The decision about what is constitutionalized is based on a precommitment strategy: the states commit to constitutionalizing those rules that they consider essential for the functioning of democracy. In the area of the EU, the strategies of petrification consist of transferring decisions that are ordinarily left to the ordinary political process into primary legislation (that is, Treaties). Unlike what happens in the states, the goal of the precommitment strategy is not to make democratic decisions possible; instead, petrification in the EU arena derives from the search for predictability in the commitments of the member states. This is something that was presented clearly by the ruling of the German Federal Constitutional Court in 1992. In the arena of macroeconomic and fiscal governance, EU member states have favoured a displacement of commitments from secondary legislation to primary legislation. 4 The origin of this petrification tenden-

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cy is found, of course, in German preferences: the German government insisted on the necessity of reflecting the rules of strict fiscal discipline in the instruments of EU governance and they appeared, therefore, in the Six Pack. This ended up being insufficient and the German government, pressured by certain domestic actors, insisted on the necessity of including it in an instrument with the status of primary law and from there the TSCG (veto by the UK). Of course, the substantive aspects of the fiscal commitments that this Treaty includes already existed in the Six Pack, but transferring them to a treaty increases their rigidity or inaccessibility. The new Treaty represents one more step in the “constitutionalization” of strict and predefined monetary rules that limit the range of democratic policies. Elevating rules about monetary governance to the level of primary legislation has made them acquire the “rigidity” of constitutional agreements, which are not normally subjected to changes in majorities and can only be modified based on a process of Treaty revision. It is certainly the case that the TSCG has lowered the amount of rigidity regarding the TEU, substituting unanimity with a requirement that twelve of the seventeen euro members must ratify it in order for the Treaty to go into effect, but the Treaty says nothing about the revision process. According to the Vienna Convention, one could deduce that the mechanism for implementation will also apply to revisions. In addition, if additional states join the euro, the “cost” of obtaining a successful ratification is reduced, since the fixed number of twelve euro member states is maintained for eventual revisions. If the signatory states can carry out the fusion clause with the EU Treaties (which depends on a probable veto by the United Kingdom), petrification could be increased unless the rule of unanimity that controls the revision processes of the Treaties is modified. Petrification has been built on two levels, since the Treaty establishes an explicit and imperative mandate for the adoption of legal instruments that guarantee the existence of fiscal brakes. Even though they initially worked with the explicit demand for the reform of national constitutions, this was not manifested literally since it presented difficulties in states that have more rigid mechanisms for constitutional reform. Thus, in Ireland and eventually in Denmark, which, even though it is outside of the Eurozone, showed its interest in adhering to the Treaty, constitutional reform is proceeding by referendum. In Belgium and Luxembourg, on the other hand, constitutional reform could require the approval of two successive parliaments. To avoid the intervention of the electors, the final version of TSCG required state provisions that are constitutional or at an analogous level. In this way, the incorporation of fiscal rules into legislation with a constitutional range would open the door to procedures that were less demanding and, therefore, less costly and more feasible. The greater laxity of laws in the face of constitutional provisions is compensated by the guarantee of an execution mechanism that the TSCG introduces: in agreement with article 8.1 of the Pact, the Commission will

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present the contracting parties with a report about the provisions adopted by each of them to fulfil the obligation to include the golden rule and the “brake.” Inevitably, the margin to build this report as a control of constitutionality exists, especially when the CJEU can also intervene, adjudicating on the validity of reform. Certainly, the rule of the constitutional fiscal brake is not unknown in other contexts with two levels of government, such as Switzerland or the United States. The paradox is that the EU is averse to the construction of a federal system in the political arena, but fiscal governance, as created by the TSCG, establishes a federal fiscal model that is much stronger than the one in the U.S. Constitution (Fabbrini 2013). The ability of the TSCG to force constitutional reforms has been very limited by the possibility of opting for regulations at an analogous level (which is a euphemism for laws). Of the six states that have a constitutional provision, only four (Germany, Slovenia, Spain and Italy) are euro members, while Hungary and Poland are not. And only Slovenia and Italy moved to constitutional reform as a consequence of the Treaty, while in several cases (Germany, Hungary and Poland), this regulation came about much earlier than the Treaty. Additionally, in several cases, the adoption of legislation has been delayed up to the limit permitted by the Treaty (1 January 2014). What is important is that the modalities of petrification of the fiscal brake have a strong relationship with the fiscal situation of each state. The constitution of Poland was the first to include a clause of this type, limiting public debt to 60 per cent of the GDP and requiring the government to adopt preventative actions for its control when the limit exceeds 55 per cent of the GDP. Germany completed its constitutional revision in 2009 (article 115), before signing the Treaty and after a process of prolonged internal debate (Schuldenbremse, “fiscal brake”). Hungary adopted similar provisions as part of its very polemical new constitution of 2011, setting a debt limit of 50 per cent of the GDP (article 36) and granting broad supervisory powers to its constitutional court (article 37.4). Technically, Spain is the fourth country with a provision previous to the Fiscal Pact, but this is obviously misleading: the government used a particularly rapid procedure that led to the approval of an extremely precise constitutional provision. Spanish political sectors demanded a referendum for a modification that, while it was not technically necessary, seemed to be required by its political significance. The Law on Budgetary Stability sets a limit of 60 per cent of GDP and establishes a limit of 0.4 per cent of the GDP for structural deficits (Ruiz Almendral). Italy modified its constitution in 2012, with a very high degree of consensus, which was encouraged by outside pressures. Even though the Italian constitution requires a balanced budget, the degree of ambiguity in the provisions (article 81 C) leaves the question of its degree of compliance with the TSCG unresolved (Fabbrini 2013, 13). The Slovenian parlia-

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ment approved its constitutional amendment in 2013, completed with a restriction to the possibility of celebrating referendums on unpopular austerity measures. Among the group of countries with fiscal difficulties, the most extreme case, Greece, is also the one that faces the greatest difficulties in executing the golden rule of the fiscal pact, given the procedures of constitutional reform. On the one hand, the Greek constitution requires a period of five years between two consecutive reforms, and Greece reformed its constitution in May 2008. On the other hand, amendments must be approved by two consecutive votes in the same chamber and, then, voted on again by the parliament elected after the reform was introduced. In all cases, a three-fifths majority or 180 votes is required. This rigidity leaves the Greek amendment still pending and, in this context, the Eurogroup, in the name of the European institutions, has simply declared that it “welcomes the intention of the Greek authorities to introduce over the next two months in the Greek legal framework a provision ensuring that priority is granted to debt servicing payments. This provision will be introduced in the Greek constitution as soon as possible” (Eurogroup Declaration 21 February 2012). Strictly speaking, Greece has violated the requirement to execute TSCG provisions to introduce the golden rule within the one-year window. Reading the previous data reveals an interesting balance: at the moment, only four of the seventeen euro members have included the golden rule through a constitutional revision, although several others, such as Austria, Slovakia and Greece, have announced their intention to reform their constitutions. The rest have chosen an infraconstitutional provision. In France, former president Sarkozy had proposed a constitutional clause with automatic corrective mechanisms (that even called for the intervention of the Conseil Constitutionnel). Both chambers had already approved the reform that was pending from a special session of congress (the joint meeting of both chambers to vote on it and approve it by a twothirds majority). The new president elected in 2012, François Hollande, declared his opposition to constitutional reform, coming out in favour of a constitutional law. The Conseil Constitutionnel confirmed the viability of this option that has been questioned by some constitutionalists regarding the guarantees in the control of its application. In 2012, the Dutch government announced that it would execute the TSCG mandate through a parliamentary law rather than constitutional reform. The Austrian government agreed in November 2011 to revise its constitution to introduce a provision that would guarantee the “automatic debt brake” that would require the government to reduce debt to 60 per cent in 2020, but it could not achieve the necessary two-thirds majority, thus leaving the 2011 law in place. In Finland, the parliamentary recommendation was also adopted through law. Slovakia also opted for a “constitutional law” that is not exactly a constitutional reform. The Slovak model foresaw an “escalation of meas-

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ures” depending on the level of debt: when debt reaches 53 per cent, the government should approve reducing measures and freeze their own salaries; at 55 per cent, it prohibits increased expenditures for the following year; at 57 per cent, the government should propose a completely balanced budget. If these measures fail and debt reaches 60 per cent, the government should initiate a vote of confidence. Finally, the threshold of superior debt will decline progressively until reaching 50 per cent from 2017 on. In the cases of Latvia and Romania, the adoptions of their respective laws of fiscal responsibility stem from the execution of assistance programs from the International Monetary Fund and the EU. Therefore, the Memorandum of Understanding for Romania was already calling for the adoption of a law of this type in 2010, and both institutions also demanded a similar law for Latvia. In summary, the introduction of constitutional reforms has been limited: only four members of the Eurozone and two nonmembers have introduced regulations at this level and one more (Greece) has made a commitment to do so. In general, there is a marked preference for using laws, both among euro and non-euro members. While this may seem, a priori, to be a looser structure, the conversion of the EU and its states to the model of legally guaranteed fiscal discipline seems to be beyond all doubt. 4. CONSTITUTIONAL CHANGE: THE PREEMINENCE OF FISCAL DISCIPLINE AND THE AVAILABILITY OF THE SOCIAL In the EU, constitutionalization (in the sense of inclusion from rules to primary laws) is not derived from the strategy of precommitment in favour of the functioning of democracy, but in favour of greater rigidity in the protection of certain political options, that is, those options that situate budgetary stability as an essential and almost unique objective of macroeconomic and fiscal policy whose origin is a certain ideology that is prevalent in Germany. There are, of course, normative arguments that influence the necessity of constitutionalizing the golden rule and the fiscal brake. The first argument refers to the horizontal (or territorial) effects of national decisions in a system of complex interdependence such as the one created by the EU. National macroeconomic and fiscal decisions can create devastating externalities for other states that have not participated in them (Maduro 2012). In fact, this is the reasoning that is systematically invoked both for the intervention in countries at risk of collapse and for, in a parallel fashion, creating mechanisms of assistance for those same countries: the risk of systemic contagion (rather than more or less altruistic reasons) (Closa and Maatsch 2014). Even though the argument is undeniable, it is not complete: in a system of economic and fiscal interdependence, there are other national decisions that have an impact on third-

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party states. Take, for example, the decisions about the labour market at the state level. It is clear that in a system of commercial and economic interdependence, unilateral reform of a labour market to reduce unit labour costs has an immediate impact on other states. If this takes place in a situation where the closest competitors cannot use instruments like devaluation (because of a single currency) and in an expansive context of the economic cycle, the externalities of labour reform in a single country are evident, and even more so if we take into consideration the relative size of the labour market of a state within a zone of economic and monetary union. Other examples of externalities refer, for example, to the advantageous taxation that some member states apply to companies (e.g., Ireland) or banks (e.g., Luxembourg). This affects the competitiveness of other states in which the companies or banks may operate and even have their greatest percentage of operations. Thus, externalities are consubstantial to the single market and the created system of interdependence, but what seems to convert them into a problem with a European response is that actors (both states and sectors) find themselves affected by them and the way they fit into a particular economic paradigm. A second argument in favour of the constitutionalization of a strict fiscal discipline stems from the notion of intergenerational justice. Thus, the transfer of debts toward the future (new generations) by costs incurred by current generations is presented as an injustice and an intertemporal democratic externality: those who have the responsibility for paying debts did not participate in the decisions that led to their creation. Essentially, the intergenerational justice approach transforms the Jeffersonian approach regarding the validity of constitutions between generations: Why should current agreements oblige future generations? In spite of the attractiveness of the thesis of intergenerational justice, there are arguments that put it into question. On the one hand, the immutability of constitutions is relative: future generations always have leeway to adapt constitutions to new values or to a change in values over time. This argument, however, is not easily applied to the availability of inherited debt, although there are historical examples of waiving past debts. But a second argument that questions the absolute validity of the principle of financial balance as an application of the principle of intergenerational justice does have validity: providing for certain public goods through the budget has an eminent intergenerational character. For example, looking at future generations, the results of education do not correspond strictly to the generations that pay for it. More precisely, some public goods provided by one generation are enjoyed through time by future generations. This is particularly evident in the case of transportation infrastructure, but other infrastructures as well. The importance of these arguments allows us to better appreciate the deficiencies of the process that has been followed for constitutionalization. In addition to the aforementioned prevalence of the German and

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preference for petrification, the constitutionalizing process is also lowquality. The new Fiscal Pact has been elaborated without the intervention of the Convention anticipated in article 48 of the TEU (not to mention the formality that it is not an EU Treaty). In addition, the agenda (contrary to previous EU reforms) has been strictly restricted to measures of fiscal discipline and oversight. Finally, the entire process has been completed with unusual haste, especially given the importance of the agreement. Although one might hope for more from the EU method, something similar took place with the negotiation of the packs that were agreed upon with a sense of urgency that precluded a process of prolonged discussion. 5. IMBALANCE BETWEEN THE ORGANIZATIONS RESPONSIBLE FOR GOVERNANCE As a whole, the reform of European governance has eroded the capacity for guiding the fiscal and macroeconomic policies of the member states with democratic components. This is due to a combined movement of reinforcing agencies and technical organizations (Commission and ECB and, unintentionally, the CJEU) in conjunction with a reduction in the role of the representative organizations. This section reviews the position assigned to European and national parliaments without analyzing the also notable changes in the Council, the ECB and the CJEU. The Role of Representative Organizations: the Retreat of Parliaments The erosion of the democratic quality of the new governance derives from a series of features scattered throughout the Six and Two Packs and the TSCG itself. The position of the parliaments (European and national) is marginal and the provisions of the Six Pack and the TSCG cannot conceal their irrelevance. The role of the EP is constructed in the provisions on European Dialogue that have the same structure and identical wording both in the preventive as well as the corrective part of fiscal and macroeconomic elements. The role of the EP is truly passive: its relevant Commission (economic and monetary affairs) can invite authorities (the president of the Council, of the Commission and, when appropriate, the president of the European Council and of Eurogroup) to discuss the decisions made in EDP and MIP. 5 The parliamentary Commission itself can offer the opportunity to the member state in question to participate in an exchange of perspectives. The role of the EP is extended in relation to the European Semester, since the Commissions of Financial and Economic Affairs, of Economic Policy, of Employment and Social Protection should be consulted when appropriate. 6 Even with an openly positivist and optimistic reading, it is difficult to present the exchange of viewpoints as “democratic legitimation.”

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As for the national parliaments, the Six Pack has not gone beyond a programmatic reference in the preamble of regulation 1175/2011 (58) that affirms that the national parliaments should participate adequately in the European Semester and in the preparation of stability programs, convergence programs and national reform programs, in order to increase transparency and the sense of empowerment they have regarding decisions made. It seems preposterous that article 11 of directive 2011/85 establishes that no provision of the directive prevents a new (democratically elected) government from actualizing their previsions of the MediumTerm Budgetary Framework. It is assumed that this actualization should respect the prearranged framework so that national electoral cycles, to the extent that they influence political programs, are conditioned by the necessity of respecting pluri-annual budgetary frameworks. The balance of the participation of national parliaments both in National Stability and Convergence Programs as well as National Reform Programs (in other words, in fiscal and macroeconomic arenas, respectively) is rather poor. Thus, in September 2012, 7 the EP recorded that only twelve national parliaments had been consulted in the elaboration of the Stability and Convergence programs, while another six had been informed—in other words, they were merely passive receptors of the information—and in six cases their role was unknown, the a priori assumption is that they had no role (the three states subjected to adjustment programs are not obligated to present these programs since other commitments are in force). As for reform plans, seven governments had consulted their respective parliaments, four had informed them and there was no record from the other thirteen states. In the case of Spain, neither of the two programs made any mention of the role of the Spanish parliament. Unilaterally, the Congress invited the president of the ECB to a hearing following a similar precedent in Germany. Although it could be considered a control mechanism, in reality, the hearing (12 February 2013) was structured as an intervention at their request, behind closed doors and without written proceedings of the session. One of the possible explanations for parliaments’ weakness is their lack of a formal role in the negotiations of reform measures for macroeconomic and fiscal governance, which would deprive them of the ability to condition the result. This takes place in spite of some relatively “strong” formal powers, such as participation in the elaboration of legislation through ordinary legislative procedures or the ratification of Treaties in the case of the TSCG or TESM. However, there is no evidence that national parliaments have tried to influence intergovernmental negotiations in those two cases. Additionally, the elimination of the requirement for unanimity for treaties to take effect (the TSCG required the ratification of twelve of the seventeen Eurozone states and the TESM required ratification by a group of states controlling 90 per cent of the capital or, in other

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words, the seven largest contributors) has meant the elimination of veto power (and also created a very rapid ratification process). Certain authors have argued that the national parliaments have played an unprecedented role with their participation in the vote on financial guarantees for financial bailouts (Bertoncini 2013). This is obviously true only in the case of the parliaments of the lender states, while the parliaments of those states that receive assistance could only approve the adjustment programs designed by the IMF and/or the Commission and, of course, they could not take the luxury of questioning instruments such as the TESM or the TSCG whose approval was a prerequisite to receiving assistance. Thus, the Bundestag has come out relatively strengthened thanks, particularly, to its empowerment by the Federal Constitutional Court of Germany. In its ruling regarding a bailout to Greece, 8 the court affirmed that under the German constitution, “the decision on public revenue and public expenditure should remain in the hands of the Bundestag as a fundamental part of the ability of a constitutional state to democratically shape itself.” As elected representatives of the people, the members of parliament should remain in control of fundamental budgetary decisions in an intergovernmental system of governance as well. This means that the approval of public expenditure should take place in plenary session rather than in parliamentary committee. It is inevitable to think that there is a fundamental contradiction between this ruling and the TSCG, a contradiction that Germany resolved ex ante by incorporating the “golden rule” and the “automatic brake” before the Treaty was even proposed. The ruling on the TESM in 2012 expanded empowerment in favour of the Bundestag by interpreting the democratic principle established in article 20 of German Basic Law as prohibiting absolute authorization for the EU and supranational institutions and requiring parliamentary decisions for the transfer of funds. The court also established that the regulations that establish the confidentiality of the documents and professional confidentiality and immunity could not in any way inhibit the flow of information to the German parliament. For that reason, the German Constitutional Court demanded that members of parliament be informed about the debates of TESM organizations. Interparliamentary Cooperation The reform of macroeconomic and fiscal governance has brought a relatively novel and promising environment for the exercise of control on the part of representative organizations: interparliamentary cooperation. This has been a demand of political and academic circles that have sustained that parliamentary supervision is inefficient if it is not developed as multilevel supervision (Crum and Fossum 2009).

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What is interesting is that this environment has been constructed within the TSCG and has been less developed in the Two Packs. The TSCG, appealing to the protocol on the role of the national parliaments in the TEU, includes provisions to promote a conference of representatives of the commissions relevant to the EP as well as national parliaments with the goal of discussing budgetary policies and other matters covered by the Treaty (article 13). This provision stems from a proposal by the French parliament in 2011 in the framework of a reunion of the Parliamentary Presidents of the Member States. The French representatives in the Intergovernmental Conference (IGC) that elaborated the TSCG alongside the EP representative, Elmar Broek, agreed upon their inclusion in the Treaty. The mandate for the new conference is formulated in generic terms, and the counterparts for the EP will be the parliaments of the signatory states of the TSCG. The first reunion of the Interparliamentary Conference on Economic and Financial Governance took place in Vilnius in October 2013, convened by the parliament of the state that held the EU’s rotating presidency. Although it was convened following article 13 of the TSCG, representatives of all the EU parliaments, including nonsignatory states (the United Kingdom and the Czech Republic), participated. This asymmetry has activated debates about the EP’s suitability to handle Eurozone matters and has provoked diverse proposals for ad hoc assemblies (see Bertoncini 2013). In contrast with the Treaty, both the Six Pack and the Two Pack lack provisions for interparliamentary cooperation, which is due, perhaps, to the fact that the EP has been conscientious, in its negotiation of these regulations, to maintain its primacy, although its real powers in relation to both are rather weak. Regardless, the EP has organized the Parliamentary Week of the European Semester (January 2013), directed by three EP committees (Budgets, Economy and Employment). Members of the EP and some one hundred national parliamentarians participated, and audiences were held with the Economic and Social Affairs commissioners, with high-ranking officials of the ECB, the European Council and the Commission. Both conferences register little or no advances in control (and even information) on the part of the parliaments over Community, let allow national, authorities. In spite of the aspirations, neither of them has progressed beyond being a “talking shop” without true importance, further undermining the representative democratic dimension of European politics. CONCLUSIONS The reform of macroeconomic and fiscal governance has been realized through a combination of different types of regulations: Treaties, “mecha-

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nisms” and EU rules of law, without mentioning the Memoranda of Understanding (MoUs). On the whole, they have increased the fragmentation of Community order, configuring at the same time a much more differentiated entity as far as commitments that different states assume in different realms. The model of governance transfers German preferences accurately and unilaterally, both in the substance of governance (fiscal discipline, austerity) and in the choice of the instruments of governance. The principal instrument has been petrification (i.e., transferring rules of primary law of certain political options) also inspired by German preferences. Institutional design has enhanced much of the Commission’s role, relegating the role of representative bodies, both in the European and national parliaments. The most negative assessment has to do with the manner in which the transformation has been carried out: instead of a formal constitutional reform as would be required by the significance of the changes, they have chosen an ad hoc constitutionalism that has utilized the distinct options available to transform (Menéndez 2012; Tuori and Tuori 2014) the constitutional substance of the EU in a flexible manner. BIBLIOGRAPHY Beck, Ulrich. 2013. German Europe. Cambridge: Polity. Bertoncini, Yves. 2013. “The Parliaments of the EU and the EMU Governance: What Parliamentary Dimension for the ‘Political Union’?” Notre Europe, 11 April 2013. Accessed 28 April 2014. http://www.notre-europe.eu/media/parliamentsemugovernance-bertoncini-ne-jdi-apr13.pdf?pdf=ok. Bianco, Giuseppe. 2012. “The New Financial Stability Mechanism and Their (Poor) Consistency with EU Law.” European University Institute, Florence. Accessed 28 April 2014. http://cadmus.eui.eu/handle/1814/23428. Closa, Carlos. 2006. “Reflexiones sobre la angustia y (falta de) alegría de postteorización sobre la integración y la UE.” Revista Española de Ciencia Política y de La Administración 15: 165–74. Closa, Carlos, and Aleksandra Maatsch. 2014. “In a Spirit of Solidarity? Justifying the European Financial Stability Facility (EFSF) in National Parliamentary Debates.” Journal of Common Market Studies: 1–18. Accessed 28 April 2014. http://onlinelibrary.wiley.com/doi/10.1111/jcms.12119/abstract. Collignon, Stefan. 2004. “The End of the Stability and Growth Pact?” International Economics and Economic Policy 1/1 (March 1). Accessed 28 April 2014. http:// link.springer.com/10.1007/s10368-004-0009-6. Crum, Ben, and John E. Fossum. 2009. “The Multilevel Parliamentary Field: A Framework for Theorizing Representative Democracy in the EU.” European Political Science Review 1/2: 249–271. Accessed 28 April 2014. http://journals.cambridge.org/article_S1755773909000186. Curtin, Deirdre. 1993. “The Constitutional Structure of the Union: A Europe of Bits and Pieces.” Common Market Law Review 30/1 (February 1): 17–69. Deutsche Bundesbank. 2012. “Steltenunghame Gegenüber Den Bundesverfassungsgericht Zu Den Verfahren Mit Den Az. 2 BvR 1390/12, 2 BvR 1421/12, 2 BvR 1439/12, 2 BvR 1824/12, 2 BvE 6/12 21 Dezember.”

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European Commission. 2011. “Green Paper on the Feasibility of Introducing Stability Bonds.” Brussels. Accessed 28 April 2014. http://ec.europa.eu/europe2020/pdf/ green_paper_en.pdf. ———. 2012. “A Blueprint for a Deep and Genuine Economic and Monetary Union: Launching a European Debate.” Brussels. Accessed 28 April 2014. http://ec.europa. eu/commission_2010-2014/president/news/archives/2012/11/pdf/blueprint_en.pdf. Fabbrini, Federico. 2013. “The Fiscal Compact, the ‘Golden Rule’ and the Paradox of European Federalism.” Boston College International & Comparative Law Review 36/1. Future of Europe Group. 2012. “Final Report of the Future of Europe Group 17 September 2012.” Accessed 28 April 2014. http://www.europeanglobalstrategy.eu/nyheter/publications/final-report-of-the-future-of-europe-group. Guérot, Ulrike, and Sebastian Dullien. 2012. “The Long Shadow of Ordoliberalism: Germany’s Approach to the Euro Crisis.” European Council of Foreign Relations. Accessed 28 April 2014. http://ecfr.eu/content/entry/the_long_shadow_of_ ordoliberalism_germanys_approach_to_the_euro_crisis. Hall, Peter A. 2012. “The Economics and Politics of the Euro Crisis.” German Politics 21/4 (December): 355–71. Accessed 28 April 2014. http://www.tandfonline.com/doi/ abs/10.1080/09644008.2012.739614#.U1487fl_t8E. Howarth, David, and Charlotte Rommerskirchen. 2013. “A Panacea for All Times? The German Stability Culture as Strategic Political Resource.” West European Politics 36/4 (July): 750–70. Accessed 28 April 2014. http://www.tandfonline.com/doi/abs/ 10.1080/01402382.2013.783355. Jellinek, Georg. 1991. Reforma y mutación de la Constitución. Madrid: CEPC. Kreilinger, Valentin. 2012. “The Making of a New Treaty: Six Rounds of Political Bargaining.” Notre Europe, Paris. Accessed 28 April 2014. http://www.notre-europe.eu/media/newtreaty_v.kreilinger_ne_feb2012.pdf?pdf=ok. Maduro, Miguel Poiares. 2012. “A New Governance for the European Union and the Euro: Democracy and Justice.” European University Institute, Florence. Accessed 28 April 2014. http://cadmus.eui.eu/handle/1814/24295. Menéndez, Agustín J. 2012. ¿Una Unión Europea En Mutación? de La Crisis Económica a La Crisis Constitucional de La Unión Europea. León: Ediciones Eolas. Merkel, Angela. 2010. “Speech by Federal Chancellor Angela Merkel at the Opening Ceremony of the 61st Academic Year of the College of Europe in Bruges on 2 November 2010.” ———. 2011. “Speech by the Federal Chancellor Angela Merkel to Mark the End of Mr Jean-Claude Trichet’s Term as President of the European Central Bank in Frankfurt, Wednesday, 19 October 2011.” ———. 2013. “Angela Merkel on Europe ‘We Are All in the Same Boat’”: 1–5. Spiegel, Peter, and Ben Hall. 2010. “Germany Backs Tough EU Deficit Rules.” Financial Times, 26 September. Tuori, Kaarlo, and Klaus Tuori. 2014. The Eurozone Crisis. Cambridge University Press. Van Rompuy, Herman. 2012. “Towards a Genuine Economic and Monetary Union. Report by President of the European Council Herman Van Rompuy 26 June 2012.” European Council, Brussels. Accessed 28 April 2014. http://ec.europa.eu/economy_finance/crisis/documents/131201_en.pdf. Waterfield, Bruno. 2011. “Germany Attacks Brussels ‘Eurobond’ Plan.” Telegraph. http://www.europarl.europa.eu/webnp/cms/pid/1796.

NOTES 1. Case C-370/12, 121 and 68–69. ECJ 27 November 2012. 2. Aid to Greece 7.09.2011 BVerfGE 19.124; BverfGe 130 23.02.2012; BvefGE 4/11 19.06.2012; TESM 12.09.2012 3. See the opinion of the Bundesbank before the Federal Constitutional Court of Germany (Deutsche Bundesbank 2012).

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4. This has not been the only mechanism of petrification: EU states (led by Germany) have also shown their preference for hard law rather than the “soft” law regulations implicit in intergovernmental coordination. Thus, the Euro Plus Pact, based on political commitments from the heads of state and heads of government on national policies, has been partially subsumed in the Two Pack, in other words, in secondary legislation, and governed by the Community method. 5. Article 3 regulation 1173/2011; article 6 regulation 1174/2011; article 2-ab regulation 1175/2011; article 14.1 regulation 1176/2011 and article 2.1 regulation 1177/2011. 6. Article 2.a 4 regulation 1175/2011. 7. EP DG Internal Policies Directorate for Economic & Scientific Policies Economic Governance Support, Unit Involvement of the National Parliaments concerning the SCP and the NRP, Background Note 20.09.2012. Accessed 28 April 2014. http://www. europarl.europa.eu/document/activities/cont/201210/20121019ATT53994/ 20121019ATT53994EN.pdf. 8. Ruling of the Second Senate 9 July 2011 2BvR 987/10-2 BvR1485/10 -2 BvR 1009/ 10.

THREE The Current European Crises The End of Pluralism? Joxerramon Bengoetxea

The title of the conference is sufficiently ambiguous to allow for plural strategies, for realism and even for optimism. “Europe after the euro crisis” can be taken as a call to discuss how Europe will look whenever it succeeds in leaving behind the euro crisis. It can also be understood as an invitation to consider that the euro crisis is actually over and that the task is now to redesign or rethink Europe. 1. EUROPE AFTER THE EURO CRISIS? However the bottle is only half full: even if euro-Europe, the Eurozone, could be said to have left the crisis behind, there may still be, indeed there are, other types of crises lingering on either brought about by the euro crisis or accelerated by it. It could well be that the euro crisis has unleashed a systemic crisis in other aspects of European integration, in European law, polity and solidarity. The argument here sketched is not that the crisis of the euro and the way it has been managed has in fact and on its own created the crisis in other sectors, but rather that the conditions were there for the crisis to develop, intensify and spread into other areas because of faulty institutional design, mismanagement or ideological-cultural factors. We are experiencing a systemic crisis in the whole of the EU, not only in the Eurozone. This thesis is accompanied by some methodological observations. We are facing a systemic crisis in Europe generally, each 57

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aspect of the crisis—economic, financial, fiscal, budgetary, administrative, governance, constitutional, democratic, social (inclusion, solidarity and welfare functions), cultural, institutional—feeding back reflexively in a cycle or network; each aspect interacting and having effects on the others. From the perspective of understanding and hermeneutics, the set of interactions creates a system or a whole and each of these aspects can be seen as interlocking subsystems of the complex compound and polycentric social system that is the EU. Interdisciplinary and systemic approaches are necessary to gain a proper understanding of the situation. However, from a normative standpoint, each subsystem is being acted upon separately, autonomously. Each subsystem has its own logic, its own norms and processes, its own internal rationality and the interactions with the other subsystems are downplayed. Economic logic, political logic and legal logic do not necessarily conflate, nor do they interact with ethics; constitutional design and social welfare functions are not synchronized, and so on. Normatively speaking, each of the subsystems seems to be operating under closed, autonomous discourses, and it becomes very difficult to cut into the crisis cycle and make discourses interact or structurally couple with each other: each response comes from different, closed subsystems and seems to neglect concerns brought from the rest. In the meantime there is no institutional means to structurally couple the systems enhancing communication between them. As social science and humanities scholars, we may very well adopt interdisciplinary strategies to gain holistic and systemic understanding, and of course we need to. Yet, normatively speaking, experts from specialized fields and discourses appear to be speaking past each other in different languages rather than communicating. By way of example, the moment that recession is left behind because there is a trimester of growth, no matter how small, the economic crisis is declared over. It could well be that an economic or financial expert or a technocrat, taking into account certain macroeconomic parameters, declares the euro crisis to be over in all of the Eurozone except Greece. Ireland is declared out of the crisis. Italy and Spain are now said to be on their way out or going in the right direction. If we heed what a representative of the Spanish government, secretary of state for European Affairs Mendez de Vigo, said in his opening address to the conference, we might draw the conclusion that even Spain is out of the euro crisis, and all that is now remaining is to carry out the “necessary” structural reforms. We have seen politicians and persons in powerful positions opting for speech acts that stipulate the euro crisis to be over. The illocutionary aspect of the acts is to create a feeling of trust and optimism that will hopefully have knock-on effects. However, the perlocutionary aspect of the speech act, the effects it provokes on the addressees (Searle 1969) might be very different, and factors like credibility, authority and charisma have to be

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factored in. As scholars and academics, but also as active citizens, we probably would do better trying to analyse reality and facts and proceed to interpret them. Leaving aside such considerations on pragmatics and political discourse, and in addition to engaging in methodological discussions, this chapter develops some substantive arguments. The main point is that the crisis of Europe, of the Eurozone and the EU is not only a crisis of financial and economic systems and the ensuing conditionality or austerity discourse but also a social crisis (of solidarity) and a cultural integration crisis (cultural pluralism). These are two major aspects or subsystems of the systemic crisis that will be developed. The crisis of solidarity will require analysing or deconstructing solidarity as we traditionally tend to think of it in state-national terms and then reintroducing or reconstructing solidarity in multiple spheres in the EU, understood as a flexible quasifederal polity characterized by multilevel governance, subsidiarity, compound constitutionalism and complex, polycentric decision making. The crisis of cultural and normative pluralism, which is at the same time the crisis of a society that attempts to accommodate difference and value pluralism not only at a personal level but also at a group, community or “minority” level, is somehow related to, but goes well beyond and cuts across the deconstruction of solidarity, from the traditional nationstate level into the complex polity level that is being constituted above and below the member state. This already constitutes a “federal” dimension of pluralism, but cultural pluralism cuts across this vertical territorial axis and impregnates each of those levels, from the local to the global. A truly pluralistic polityscape is thus challenged or threatened by the crisis. Is this the end of pluralism? 2. WHAT IS THE CRISIS? This euro crisis affects an important number of EU member states, especially but not limited to some in the Eurozone. It is an unprecedented mix of public-debt crisis, banking crisis, zero or negative growth, mortgagebased private-debt crisis, high unemployment, a radical diet imposed on the public expenditure of the welfare state, a public-sector crisis, failed institutional design of the Economic and Monetary Union norms and credibility/confidence/trust crisis. It is a financial, monetary and fiscal economic crisis. It leads the countries suffering it to severe debt problems, well over the 60 per cent of GDP barrier set by the TFEU and to serious budget deficits, well beyond the 3 per cent threshold. 1

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A Narrative of the Crisis The banking and financial-sector collapse was at the epicentre of the economic crisis tsunamis. It was linked to banks and the financial sector having engaged in risky operations, especially on derivatives and uncontrolled lending, a practice condoned, even praised at the time, by the major rating agencies. After the collapse of Lehman Brothers, many other banks faced severe liquidity problems. Some even faced problems of solvency. It soon became obvious that the European banking system would suffer contagion, after initial self-congratulatory claims that it was resilient enough to avoid collapse. Instead of letting so-called “bad” banks fail completely as Iceland did, 2 most member-state governments went to the rescue of the major banks by massively injecting capital originating in taxpayer contributions. For a time even major bankers praised these apparently Keynesian moves on the part of the governments. The EU institutions and the Commission state aid and competition experts conveniently looked away and treated these injections as not constituting state aid in the sense of the TFEU or considered them justified. 3 Consequently, after deploying their financial resources, member states encountered difficulties, having increased their debt and emptied their treasuries. In a situation of no growth and even contraction, they needed to borrow additionally in order to face ordinary commitments. This further increased their public debt and deficit. After pouring the capital injections necessary to ensure liquidity, all of a sudden member states had to become austere again; no more public spending. Reregulation, harmonization of the banking sector was no longer that urgent, and the banks, again, resented any interference in their business. The storm was over for most of the banking sector, with notable exceptions like Spain, which had to call for a partial bailout for the banking system in 2012, and later Cyprus in 2013. Financial markets, including those banks that had obtained such favourable conditions from capital injections at extremely competitive rates, would not easily buy government bonds if deficit and debt reached such high levels, because the risk of default was looming. Intervention or bailouts by international financial institutions were a permanent threat. Only in extreme cases was any form of (partial) default envisaged for Greece. Governments of states with high debt and difficulties placing bonds that sought ECB assistance to buy bonds were required to reduce spending and seek financial balance at all costs, even social, educational costs. And yet many economic operators found it increasingly difficult to access financial markets in competitive conditions. Banks became riskabhorrent. Since growth was around zero, the only way to adjust budgets was to raise taxes and cut spending, again at the expense of the underprivileged. Borrowing became increasingly and exponentially expensive

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and any income from taxes would have to go primarily into the payment of government debt. A vicious circle resulted and the risk of default was permanently in the background. Two important steps were then finally adopted at the EU. First, the pack of measures (the Six Pack and Two Pack) and the introduction of the European Stability Mechanism (ESM) appeared in this difficult context. A new article 136(a) was introduced into the TFEU, and pending its ratification and entry into force, the intergovernmental ESM Treaty was adopted between most (twenty-five) but not all of the twenty-seven member states. This would allow access to a platform that would buy government bonds, thus easing access to finance by troubled economies. The Pringle case 4 dealt with this situation and found that the ESM Treaty was compatible with the TFEU. Second, the financial and monetary crisis was also addressed finally by the ECB, whose president declared in the summer of 2012 that everything possible would be done to avoid the collapse of the euro system. It has only taken about half a year after this statement to calm financial markets and to reach a point where Eurozone member states like Spain and Italy could place their government bonds at rates close enough to precrisis levels. Once the risk of default has been discarded, except for Greece, the attention is turned on so-called conditionality, that is, the very strict measures required by the “lenders” that become “creditors.” The dominant factor behind the assistance is captured under the heading conditionality and “structural reforms,” a euphemism for austerity, that is, the thinning out of state finances and the culture of legal reforms—mostly administrative, but in some cases even constitutional reforms—and of cuts into welfare services and zero-debt budgets, of reduced public borrowing through public-debt state bonds and of higher and higher costs of borrowing in the financial markets. The Moral of the Narrative This austerity predicament has generated a widespread sense of social panic concerning deterioration of access to basic but decent welfare services and chances of sustained employment, and therefore loss of quality of life throughout the EU. An open question is whether the ensuing sense of panic may eventually generate new cross-party and cross-European consensus on the way to implement such harsh structural reforms without fatally damaging the European social model. Responses and reactions, protests and resistances are piecemeal and circumscribed to each member state: protests in Greece, later protests in other European cities, occasional rulings by some constitutional courts (e.g., the Portuguese Constitutional Courts on two occasions in 2013 on the wage and work-time cuts to civil servants, and

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on reduced calculation of pensions), occasional court cases against the adopted Treaties, and sporadically some timid protests by governments. Only recently the French government has voiced concern at the aggressive recommendations made by the European Commission concerning the structural reforms that France would need to make regarding, for example, its pension system and retirement age (June 2013), but France has decided, encouraged by a temporary surge of economic growth, not to engage in any drastic changes other than gradually prolonging the years of contribution in order for workers to qualify for full pension rights (August 2013). Another open question is whether these social protests and movements will be capable of articulating political positions in representative democracy. A broad consensus would have to deal with many more reforms, including the redistribution of wealth in society or access to welfare and basic common goods. These are concerns related to the construction of solidarity in Europe. Therefore it becomes crucial to discuss the normative and practical aspects of these developments and to develop instances where such discussions could materialIze. The elections to the European Parliament could be a great opportunity for such debates and movements to emerge before and during the electoral campaigns. 3. THE CRISIS IS DEEPER THAN IT SEEMS Because of the complexity of the systemic crisis, it is difficult to analyse current events and explain the links between the different types of crisis that are currently haunting Europe. The analysis would need to include all the following variables: • the crisis of the euro currency and Eurozone (still unresolved, at least as concerns some members of the Eurozone, but, arguably, no longer affecting the euro as a whole), • the economic crisis linked to stagnation or even recession (depression?) in many sectors of the economy throughout the EU, • the welfare-state crisis also in the EU, but especially in the southern Eurozone countries, • the crisis of social integration and multiculturalism in the whole of Europe (which has been going on for some time but has been exacerbated by the crisis), • the political crisis in many European states and in the EU as a “polity” (also exacerbated by the crisis), • the institutional crisis in the EU that is even accentuated by the crisis, • a legal—rule of law—crisis: the secrecy of measures adopted in the framework of ESMS treaty (formally outside the EU?), the Memoranda of Understanding concerning bailouts; letters sent to Ireland,

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Spain, Portugal from the ECB, which refuses to disclose contents. Allegedly these letters threaten the removal of transfers to these countries and require very detailed reforms in labour law, and other structural administrative reforms, • the crisis of international cooperation and humanitarian aid and • the crisis of environmental protection standards, for example, the system concerning the Carbon Emissions Trading System, where the prices per ton of CO2 have plummeted since the crisis, making the system unworkable. Obviously, the relationships between these crises are not linear; nor are they directly causal, but rather suprasystemic and nodal. Isolating each aspect of the crisis in order to conduct ceteris paribus analysis is possible and may yield interesting results as long as we keep in mind that they remain systemically related. But seeking correlations and taking into account variables from the other subsystems is probably more telling than analysing each aspect of the crisis in isolation. Societal implications of the austerity measures include even tougher immigration policy and control and lower standards for basic welfare provided to so-called irregular residents, poverty and malnutrition, or lack of access to public welfare health services. In many countries, austerity measures and the euro crisis are eroding one feature Europeans felt most proud of until a few years ago: Europe’s diverse social safety nets (welfare, health, education, inclusion policies). The impact of welfare collapse on societal relations will be huge and will lead to greater social inequality. This is a crisis of the social welfare systems, and therefore also a crisis of identity for Europeans, because solidarity and the special European social model have been a defining feature of the EU. It also becomes an issue of legitimacy: attachment to the EU as a project is conditional on some shared normative outlook. The impacts of the crises on cultural pluralism and the integration of minorities or the “management” of diversity are harder to detect. The erosion of the social model and of solidarity seems to mark an end to toleration through the rise of populism. Even if not formally, at least as a matter of fact, migrants are paying the highest price for austerity measures and cuts in welfare services. These services are often restricted to citizens and lawful residents. This malaise grows even more sombre if we direct our gaze at multiculturalism, another jewel of integration-Europe, alongside peace, the rule of law, the single market . . . Antiminority or antidiversity feeling in contemporary Europe is mostly directed against Muslims and against Roma. A recent report by Amnesty International has detected discriminatory trends (opinions and attitudes, but also adoption of legal norms forbidding certain attires or the construction of certain buildings) against Muslims in France, Spain, Belgium, Switzerland and the Netherlands. 5 The situation of the Roma, the

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only genuinely European minority, came to the fore with the projected mass expulsion of Romanian Roma from France in September 2010, which led to a later aborted Commission infringement proceeding. 6 It has been haunting again in September 2013. However the predicament of the Roma in Hungary, Romania and other central European countries is no better, as the many cases before the European Convention on Human Rights show. 7 There are also securitarian derivatives that can be perceived as related to the crisis like so-called crimmigration or the sanctions imposed on protesters and demonstrators, or the generalized surveillance and infringement of data protection directives by state authorities. As Snowden’s leaked files show, American NSA officials have been collecting private data and information of private citizens around the world in all sorts of contexts and together with special targeted categories of individuals, information has been collected systematically whenever persons use a language on the Internet that is not the usual language of their location, which probably means the targeting of cultural or religious minority group members. NSA agents have also been spying on European member-state officials and even on the European Parliament and EU offices. In the summer of 2013, Evo Morales of Bolivia was redirected to Vienna airport in his flight back to Bolivia from Russia, in gross violation of his head-of-state immunity rights, France and Italy having denied transit and Spain delayed authorization. Some CIA agent had run the false information that the president’s plane was taking agent Snowden out of Moscow airport. Responses from the EU have been overly timid. Their relationship to the crisis often comes associated with the need to prevent or control risk, but this risk is fabricated and interpreted according to national interests going beyond security into economic matters. Exceptionalism on the basis of security is the new “normality.” The crisis on governance also carries institutional consequences, such as reinforced governmentality and presidentialism in parliamentary regimes. One example can be related, again, to migration. According to the evaluation of the Schengen system made by the Commission in mid-May 2012, in the aftermath of the Arab Spring revolutions of 2011 and with the ongoing crisis in Syria, around thirty thousand unlawful entries have been detected on the external borders of the EU in 2011, 75 per cent of them on the Greek-Turkish border (Rhodope area). On 7 June 2012 the Danish presidency of the Council agreed to proceed to a reform of the Treaty on the Functioning of the EU so that the legal basis is modified for any decision to temporarily suspend the Schengen Agreement with no need to consult Parliament. In other words, reinforced intergovernmentalism and loss of supranational control in cases of “exception” pose a threat to community method and to the trias politica: checks and balances and separation of powers.

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Politics, understood as party politics, acquires a new tone. There is the fear of not being reelected if certain (seemingly wise but harsh) economic decisions, that is, structural reforms, are made, but also if they are not carried out, making way for technocratic governments who will carry them out. We can see this in the so-called PIGS (Portugal, Italy, Greece and Spain) but also in Ireland and Cyprus and in some central European states: Hungary, Romania, Bulgaria. But there is also the risk of neonationalism, Euro-scepticism and populist political parties calling for a return to the nation-state away from the EU. Yet a naive faith in greater and ever-closer integration, a faith I tend to share, is not enough to make up for faulty institutional design. Eurosceptics seem to be raving with the euro crisis, thinking that a return to yesteryear is possible. Concerning populism, best understood as a political position, 8 totalitarian risks cannot be too easily discarded. What might have started off as a financial crisis risks now sliding into dangerous widespread populist, totalitarian and anti-immigrant positions and provoking “technocratic” and market interferences into politics. But this poses serious challenges to democracy and pluralism. One can detect a surge of ultranationalist movements even in member states that do not suffer such “interventions,” or bailouts like France and its Front National. Erik Erikson mentioned at the conference the issue of post–World War I reconciliation based on cooperation and dignity rather than the humiliation approach of Versailles. And indeed, the humiliation approach and the war compensation penalties led to very tough austerity measures imposed on Germany, provoking an explosive mix of high unemployment and uncontrolled inflation, social unrest and political malaise, a consequence of which was the state of exception, cultural uniformization or totalitarianism, Nazism, extermination of Jews and other peoples and minorities. The consequences of austerity measures on domestic politics are different in the member states and even within them. 9 The discrediting of politics is nothing new. Many politicians discredit themselves, not needing the crisis for that. Many political parties act as power-savvy machineries, or are involved in unlawful party-financing scandals. Spain is a good, but not the only, example. These are not the only symptoms of political crisis. Another dimension concerns a crisis of acceptability of the EU project, as many speakers at the conference have pointed out. According to Eurobarometers, Europeans are not too happy about the EU, which is often seen as a hindrance. There is a generalized opinion that the EU reduces politics to technocratic governance, imposing not only financial and fiscal measures, but also structural and administrative reforms. There is a feeling that politicians, whether centre-left or centre-right, are trapped by the logic of the markets. This is summed up in the motto “no alternative,” “no hay alternativa,” “Alternativlos,” expressed by illocutionary speech acts made by

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leading politicians and statespersons. 10 If this were true, if there were no alternative to austerity measures and cuts, this would truly mean the end of politics. The most worrying symptom is this apparent exhaustion of political debate. As Kalypso Nicolaїdis says, politics, the sphere of the political, is about deliberation in conditions of discretion where choices on different options can be debated and made. If the mantra sung by many a political leader that there is no alternative were true, then discretion would disappear altogether and politics would have no scope any longer. When politics withdraws from the political, you get either the reduction of politics to law or economics—a purely technical issue—or the turning of party politics into mass-media spectacle and into show and entertainment. Only technical decisions could be adopted and only those who had the know-how could adopt them. Technocratic governance would replace political governments. And next, decisions on who should govern would be made by those who claim to have technical expertise or by market preference: why have elections at all, or if you want to have them, why have alternatives? On 22 May 2012, Nobel laureate in Economics Amartya Sen published an article in the New York Times entitled “A Crisis of European Democracy?” where he held: “Perhaps the most troubling aspect of Europe’s current malaise is the replacement of democratic commitments by financial dictates—from leaders of the European Union and the European Central Bank, and indirectly from credit-rating agencies, whose judgments have been notoriously unsound.” There has been an institutional transformation in the EU as a consequence of crisis management: the European Council has been empowered (it met twenty-five times in three years of crisis after 2009), supranationality has been strengthened with, for example, the Treaty on the Stability Mechanism, and the Treaty on Stability, Growth and Governance signed by twenty-five member states that entered into force with twelve Eurozone ratifications. The Commission, especially its economic and financial directorates, gains powers of implementation and supervision but not real decision-making powers: these are in the hands of the European Council and the ECOFIN Council of Ministers, but also of the Troika (ECB, IMF, Commission). The north-south gap is widening. The two-speed EU is ever more neatly sketched: growth, controlled deficit and welfare in the north; no growth, cuts in the welfare system and deficit control in the south. You can add to this a congenital disease of the EU in the field of foreign policy, reflected in its lack of leadership in international conflicts (most recently, Syria, Egypt). In this volume, Antje Wiener has contributed an interesting counterpoint regarding the blueprinting of many institutional innovations of the EU, but the fact remains that other than in trade relations, the EU is not seen as a global broker.

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Instead of seeing the EU as a locus for cooperation and even a learning and sharing process, it is seen by citizens and politicians as the site of painful recipes and the imposition of conditionality on financial assistance. The project, initially proposed on notions of solidarity between the peoples of Europe leading to peace and prosperity, is turned into one of austerity, sacrifice, and mistrust. Even if such measures were really necessary, as government officials claim, they are seen by the citizens as unjustly distributed among the various sectors of the economy to the detriment of workers (competitive gains only through reduced salaries), of pensioners, of the unemployed, of researchers, and of civil servants while banks and big investors are treated with silk gloves. Solidarity is thus completely transformed: taxpayer money goes to bail out banks or to pay the debt, instead of going to welfare and redistribution. There is a supranational currency and monetary union but national economic policies are no longer possible in the traditional sense, and there is no higher-level redistribution for solidarity. As the European social model crumbles, the legitimacy of the current EU is seriously undermined. This predicament is only made worse by the crisis of cultural pluralism and tolerance. 4. IMPACTS OF THE SYSTEMIC CRISIS: THE END OF PLURALISM? Cultural pluralism or rather, cultural plurality, has its origin in the rich and complex diversity and difference that exists in modern society or in a state as a result either of historical developments such as colonialism, immigration, the existence of indigenous cultures, diverse religions . . . A diversity of languages, cultures, religions, ideologies, social class and subcultures is observable in contemporary European societies, in most if not all member states. From the point of view of European integration, social cohesion and tolerance were seen as matters for the member states to resolve, each according to its own model. As long as cultural diversity and difference did not distort the market, the EU tolerated it. This social diversity sometimes gives rise to normative plurality where different minority groups or communities follow different norms, together with the official legal norms and some of the social norms of majority groups. In some cases—private relationships, family law, religious and personal identity—minority groups stick to their own norms and claim these do not impinge on the basic social contract; they claim legal and administrative toleration. The question of toleration is then turned into one of the extent of “accommodation” of difference. This is already an issue in some member states—the question of attire, the construction of religious buildings, dietary and “sanitary” practices, and so on—and also at the level of the Council of Europe and the ECHR. The EU

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has not been, so far, especially concerned by this normative plurality, but the issues will also reach the EU system. Normative plurality originating in a diversity of religious norms, especially but not only from Islam, has been seen as a threat to majority social norms in many member-state societies. It tends to be the case that groups following such “different” norms are often composed of immigrants or descendants of immigrants, and as already discussed in relation to populism and neonationalism, some political parties and movements call for a strict control, if not denial, of the practices and norms of such minority groups. They take issue with pluralism and reduce toleration to the minimum, often imposing “official” symbols, languages, and standards, in the name of equality, or republicanism, or neutral secularism. The EU has not actually incorporated this debate into its agenda, except when related to racism and different grounds of discrimination, including on religious grounds. It has also developed a strategy for the Roma, a truly European minority. But it tends not to interfere with decisions concerning pluralism or monism adopted by different member states, like the prohibition against wearing the full veil in public spaces in France. The European organization that can look into these issues is the Council of Europe. This might well be “the age of plural equality,” as Lawrence Friedman reminds us, 11 but at the same time, antiminority feelings and attitudes are springing up almost everywhere. Europe does not have migration-friendly politics to begin with, but the radicalized antimigrant feeling is another common trait of populist parties and movements, and even mainstream parties have fallen prey to the discourse of “crimmigration,” restricting liberal values and rights concerns for nationals and regularized migrants. Anti-Islamic discourse is also a common trait of some of these populisms. Populism—a mix of nationalism, Euro-scepticism and xenophobia in Piris’s words 12—and anticosmopolitan feelings are in the air, and they are exacerbated by decreased internal and external solidarity that is provoked by the economic and social-welfare crises. Likewise, anti-Western discourse and practices of some religious and cultural minority groups can easily clash with majority ways. Not just that, but through social and family pressure they often try to enforce such norms, beliefs and practices on their own group members with a risk of denying their autonomous self-determination as individuals. Populist movements feed on such cases of imposition but tend to propose measures that are an outright denial of any divergent norm and practice and have very little to offer by way of accommodating difference. Antimigrant populist parties or movements and religious minority fundamentalist groups interestingly share many traits as regards attitudes and values, and Europe as an Enlightenment project of toleration and fundamental rights and as an area of solidarity and peace is the

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worst nightmare for both of these positions. They see their predicament as a clash of civilizations, and they deny pluralism, going for uniformity and monism. 5. INSTITUTIONAL CONSEQUENCES: THE POSTNATIONAL (DE/RE)CONSTRUCTION OF SOLIDARITY Social solidarity is at stake in any polity. In a complex polity such as the EU, there are factors of solidarity (e.g. structural funds, territorial cohesion, CAP, some exemptions from the state aid regime, citizenship of the Union) both at the level of the Member States (pensions, unemployment benefits) and on a more regional level (e.g., education, health, family allocations, minimum income in regions such as Navarre and the Basque Autonomous Community as well as many of the above factors in cities). The political and institutional locus where social solidarity is debated, decided, arranged and implemented—local or European—and where social inclusion is promoted, in other words the “social constitution,” 13 becomes a key factor in determining the forum of politics and legitimacy (the merging of people and polity); ultimately of nation building and of (de)construction of the demos. Social and community identity, indeed national identity, is thus reinforced through solidarity norms and practices. These traits can be ideological and symbolic—cultural, political, religious, linguistic—when there is identification with a given polity as in the Renan understanding of the nation as a “manifest destiny,” but they can also be based on relations of interdependency à la Durkheim, or on utilitarian grounds related to output legitimacy. The consequence of such solidarity is normally a high level of trust in the polity and polity-related identity. Legitimation is thus enhanced in the polity. As a result of the multiple levels where solidarity is negotiated and constructed, we can say that a multiplicity of demoi prevail. Ideally, trust and legitimacy are retained for each of the levels: the local, the regional or cantonal, the member state or the EU, but this is a categorical transformation 14 from the canonical theory of national solidarity where the nation-state is the primary, perhaps the only locus, forum or level of solidarity, often linked to dimensions of solidarity related to security and order like the military or the police, but also to protection and to basic welfare services and provision of infrastructures. A key issue is how to articulate these different levels from a legal-constitutional and postnational point of view. Is there a preference for keeping solidarity functions generally closer to the citizens and the community, or does it depend on the given solidarity function? An interesting projection of solidarity also prevails when the polity as such decides to cooperate and aid other distinct communities. Cooperation for development or relief aid is an expression of this outward soli-

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darity, and at the European scale, these forms of cooperation and solidarity are practices at all levels of governance from the local to the EU, and often in public-private partnerships. As a result of austerity politics, many programs of cooperation have been substantially reduced if not discontinued, and this can also be seen as a further dimension of the systemic crisis. When it correlates with xenophobia, anti-immigration policies or opposition to cultural pluralism, neonationalism is reinforced, and these ideologies look to a supposedly ideal past where ethnically or culturally homogeneous nation-states reigned. They claim a return to the nationstate and a dismantling of the EU. There is one categorical flaw behind such ideologies, as Jan Zielonka puts it in this volume, and that is that the nation-states do not gain from a weakening of the EU. Power is nowadays dispersed and governance is complex; the forces and effects of globalization cannot be controlled. Plural loyalties and overlapping jurisdictions seem inevitable, and the return to the nation-state misses all these new postnational predicaments: there is no scaling back. The new challenge to solidarity, the reconstruction of solidarity, is now the result of austerity politics. All levels of solidarity from the local to the EU will see their welfare and solidarity functions severely undermined. Output legitimacy will no longer be available as it used to be, and the question will be how to administer austerity. Will a European People, a new constituent demos, eventually take shape from the systemic crisis? Will the multiple demoi learn to cooperate and coordinate vertically and horizontally, or will the state-national constitutional contexts or even the substate national settings continue to be the default level natural forum of austerity and solidarity politics? 15 It seems difficult to say that one level is inherently better than the other a priori, but considering that solidarity functions in societies are multiple, diverse and plural, it might be that the decision-making powers and the deliberative practices for each of those powers can be shared between the different levels, from the local city level to the supranational. After the euro crisis a forum or agora may emerge where the hard decisions required in order to weather the economic and financial crisis are deliberated and become effective and where the social solidarity necessary for inclusive strategies to manage socioeconomic inequalities and cultural diversity inspires harmonizing measures in the EU and especially the Eurozone, for example, fiscal coordination. This forum will no longer be exclusively national. It is both local and global, it is polycentric, and this is why finding the appropriate—efficient and legitimate—level to respond to the challenges is crucial, in true subsidiarity spirit. The second challenge is to make those forums democratic rather than exclusively technical, and this challenge obtains at all levels and requires reinforcing parliamentary discussion and control, citizen participation in de-

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liberation and initiatives, and technical expertise that is also accountable and transparent. It becomes essential then to recover the art of politics. Council of Europe commissioner for human rights Nils Muiznieks has called on contracting states to consult proposed austerity measures with their citizens, the Occupy movements, and with civil society in order to find ways out of the crisis. He believes it is necessary to fight for the fundamental rights of the most vulnerable groups, like youth, older people or homosexuals, and insists on the need to ensure immigrants’ rights to education and nationality. 16 Similarly, in a joint article, a number of European intellectuals call for the dismantling of two related dogmas—austerity and fortress Europe— and urge European institutions to renew their aspiration to democracy, to social progress, to promoting equality between individuals and to protecting those who most directly suffer the forms of racial and social violence accentuated by the crisis (Abtan et al. 2012). Europe’s duty to the less developed world should be added to these aspirations. It is a worrying symptom that decreases in internal solidarity and tolerance should be echoed by dwindling external aid and development cooperation, as well as reduced support for the Alliance of Civilizations, 17 for peace building and transitional justice. An interesting debate is the extent to which the universalism of human rights and the different organizational and procedural arrangements Europe has managed to work out, from an institutional view of law and conflict resolution, will provide widely accepted solutions to deal with normative pluralism. The role of lawyers and jurists and even legal scholars is, in this sense, crucial, for we can generally allow ways of understanding, interpreting and integrating individual and group diversity and autonomy with societal needs for cooperation and peaceful conflict resolution. BIBLIOGRAPHY Abtan, Benjamin, Daniel Barbu, Jovan Dijvak, Dario Fo, Svetlana Gannushkina, Anthony Giddens, Amos Gitaï, Béate et Serge Klarsfeld, Bernard Kouchner, BernardHenri Levy, Adam Michnik, Amélie Nothomb, Oliviero Toscani, Dominique Sopo, Elie Wiesel and A. B. Yehoshua. 2012. “L’Europe unie est un rêve, l’austérité et le rejet de l’immigré, un cauchemar.” Le Monde, 28 May 2012. Etzioni, Amitai. 2013. “The EU: The Communitarian Deficit.” European Societies 15/3: 312–30. See http://icps.gwu.edu/files/2013/08/Etzioni_EU.pdf (accessed 5 March 2014). Friedman, Lawrence. 2011. The Human Rights Culture: A Study in History and Context. New Orleans: Quid Pro Books. Joerges, Christian. 2007. “Democracy and European Integration. A Legacy of Tensions, a Re-conceptualization and Recent True Conflicts.” European University Institute, Law Working Papers 2007/25. Krugman, Paul. 2012. “Apocalypse Fairly Soon.” New York Times, 18 May 2012.

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Piris, Jean-Claude. 2012. The Future of Europe: Towards a Two-Speed EU? Cambridge: Cambridge University Press. Reynolds, Michael, Sarah Macrory and Michelle Chowdhury. 2011. “EU Competition Policy in the Financial Crisis: Extraordinary Measures.” Fordham International Law Journal 33/6: 1670. Searle, John. 1969. Speech Acts, An Essay in the Philosophy of Language. Cambridge: Cambridge University Press.

NOTES 1. TFEU: article 126, 2, second paragraph and protocol on the excessive deficit procedure. 2. For further information on the Icesave case see: http://www.mfa.is/tasks/icesave (accessed 5 March 2014). 3. Article 107 TFEU. See Michael Reynolds et al. (2011). They show how “the Commission’s policy and state-aid law itself has adapted to the current economic environment. The result of that evolution is, as the Commission’s spring 2009 special edition of the State Aid Score Board shows, the adoption of more than fifty state aid decisions between October 2008 and March 2009, twelve comprehensive guarantee schemes, five major recapitalization schemes, five framework schemes comprising a combination of these measures, and a substantial number of ad hoc measures concerning certain banks. Since October 2008, the Commission has approved a total of over €3.5 trillion in state aid measures to financial institutions” (at 1674). Two examples will illustrate this tendency: “the Commission held that no state aid was at stake in the case of emergency liquidity assistance provided by the Bank of England on its own initiative to Northern Rock. Nor did the Commission consider that the liquidity facility provided by the Danish National Bank of up to kr750 million guaranteed by Det Private Beredskab constituted state aid within the meaning of article 87(1) EC Treaty (now article 107(1) TFEU). In that way, the Commission has helped facilitate the administration of government rescue packages” (at 1676). 4. C-370/12 Thomas Pringle v Government of Ireland, Ireland and The Attorney General, judgment of 27 November 2012. 5. See http://www.amnesty.org/en/news/muslims-discriminated-against-demonstrating-their-faith-2012-04-23 (accessed 5 March 2014). 6. The official dismantling of Roma camps in the Paris banlieues in the summer of 2012, together with special occupational training measures, has replaced the expulsions by the Sarkozy government. 7. See, e.g., case D.H. and Others v Czech Republic, 47 EHRR 3 and more generally, the Press and Information fact sheet from the website of the European Court of Human Rights regarding Roma and Travellers, March 2012. 8. See Champeau in this volume. 9. Independence claims in Catalonia are to some extent related to austerity measures. 10. “Merkel, die Alternativlose” was the main headline of the front page of Handelsblatt, the German economy and finance newspaper, on the eve of the elections to the Bundestag on 20-21-22 September 2013. The subheading was, in our translation: “what the Economy expects from Angela Merkel in her third term of office.” Steinbrück, the candidate of the opposition, was said to be “unelectable,” “der Unwählbare.” 11. “Plural equality and free choice are fundamental premises of the rights movement and of modern society in general” (Friedman 2011, 123). 12. Piris (2012, 104) mentions the following as populist threats to a number of European countries: Vlaams Belang, Danish People’s Party, True Finns, National Front, Freedom Party, National Party and Sweden Democrats. He considers the two-speed Europe solution could be a means to fight the populist trend.

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13. The term is forcefully contrasted with the economic, ordo-liberal constitution by Christian Joerges (2007). 14. As Etzioni (2013) has framed it, “The integration and centralization of the European Union (EU) has thus far proceeded without the level of community building necessary to sustain a full-fledged fiscal union. At issue is not the absence of a political union or a ‘democratic conflict’ but the very limited post-national community building, a communitarian deficit. The insufficient sharing of values and bonds—not the poor representative mechanisms—is a major cause of alienation from ‘Brussels’ and limits the normative commitment to make sacrifices for the common good. Major community building measures, in normative intensive areas, such as education and language, must take place if the proposed steps towards significantly greater economic unity are to succeed. But, it is precisely these areas where community building is most absent. Hence it is likely that the current crisis will lead to a scaling back of the EU as administrative state rather than to ever higher levels of integration.” 15. This question is raised by Krugman (2012). 16. Source: Strasbourg Press Conference, Efe news agency, 25 May 2012. 17. See http://www.unaoc.org/ (accessed 5 March 2014). The riots, deaths and protests against US embassies worldwide following the publication on YouTube of a film called The Innocence of Muslims, apparently produced by Coptic Egyptians in California in mid-September 2012, show how such attempts are fragile but necessary.

FOUR Is There a Guardian of Constitutionalism in the European Union? Christian Joerges

Harvard professor Adrian Vermeule entitled his enquiries into “legal black holes and grey holes” of contemporary administrative law “Our Schmittian Administrative Law” (Vermeule 2009). I am not aware of any responses to this diagnosis in Germany or elsewhere in Europe. 1 But I see many reasons to take the messages of the Dark Lord of German constitutionalism seriously. Vermeule’s references to the state of emergency and his defence of the emergency powers of the executive are by no means restricted to threats to security as they have traumatized the US after 9/11, 2 but must be read in the light of a principled critique of parliamentary democracy and the plea for the alternative of a “plebiscitary democracy” with an “unbound executive,” which he has submitted in a monograph coauthored by his Chicago colleague Eric A. Posner. 3 In the EU the rediscovery of Schmitt has been triggered by the financial crisis, in the course of which we have witnessed an unprecedented rise and exercise of executive powers. Pertinent references to Schmitt on this side of the Atlantic are anything but complacent; 4 the question mark in the title of this essay should hence be read as a disquieting message and warning: the development of an ever closer and then ever more democratic Europe can no longer be taken for granted. What we thought was already firmly established, namely the constitutionalization of the Union, is by now confronted with enormous challenges. When considering how the crisis is affecting Europe’s constitutional constellation, we have to include the CJEU in our inquiries. It is important and by the same token difficult to 75

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avoid misunderstandings in such an endeavour. Three remarks may be helpful: 1. The first is a very general “yes/but”: yes, we have to reconsider the European project thoroughly, but this type of critical revision must not be discredited as Euro-scepticism as long as it is meant to save the project through its renewal. 2. The second concerns the functions of the CJEU: The recent performance of the court has not been exempt from critique on the substance of its holding, and this critique has been fierce with respect to labour law jurisprudence in Viking, Laval and Rüffert. 5 The present challenges are of a new kind: constitutional adjudication has to come to grips with abrupt changes of paradigmatic dimensions. 3. The third observation concerns the Schmittian challenge: How should the law, how should constitutional adjudication proceed when the legal framework within which it operates is deeply flawed and a pouvoir constituant which would be legitimated to compensate these deficits is not at work and not in sight? 1. CONSTITUTIONAL GUARDIANSHIP IN A NONUNITARY UNION History does not repeat itself. Carl Schmitt’s notions were constructed contextually. The issue and problem of “constitutional guardianship” was addressed by him in the final, crisis-ridden years of the Weimar Republic: The guardian of the constitution is not the Reichsgericht, the judicial branch, Schmitt argued, but the Reichspräsident, a political actor exercising the quasidictatorial powers defined in article 48 of the Weimar constitution on behalf of a politically homogeneous Volk (Schmitt 1931). In Carl Schmitt’s famous monograph, which he published in 1931, one section was dedicated to the problematic of an economic constitution. He observed therein strong moves toward an empowerment of administrative, financial and economic experts. 6 Such endeavours, he objected, would underestimate the need for political leadership. For the same reason he rejected a delegation of political decisions to the judiciary. The figure who could step in to guarantee the continuity and stability of the unity of the state and exercise neutrality, reconciliation and regulation, was the president of the Reich, thanks to the legitimacy he enjoyed via his election by the Volk. Europe is not Weimar. “We, the peoples of the Union,” are not some homogeneous “Volk.” The Union is not a unified body politic but is instead, even among those member states “whose currency is the Euro,” characterized by an ever deepening socioeconomic heterogeneity and persisting diversity of political orientations and cultures. The current crisis-driven striving for strong economic and technocratic governance lacks

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a consolidated constitutional form. The treaty does not provide for a figure to which political leadership for the entire Union could be ascribed, nor are the advocates of an election of the president of the Commission by the European Parliament motivated by such expectations. Which institution is in a position to exercise the function of constitutional guardianship under such circumstances? The CJEU will spring immediately to mind as the only conceivable candidate. However, the European court has never been formally established as a “constitutional” body. To be sure, its foundational jurisprudence presupposes and assumes important supervisory functions for law “at all levels of governance,” which are widely recognized by the courts and authorities of many jurisdictions and with great emphasis and near unanimity in European legal scholarship. And yet, this power cannot be considered to be comprehensive, certainly not in theory, as long as “Union competences are governed by the principle of conferral.” 7 Equally important, national constitutional courts remain entrusted with the guardianship over their national constitutions and are not prepared to subject the exercise of this authority to the CJEU. These insights are neither new, nor particularly disquieting per se. They were discussed particularly thoroughly by the late Neil MacCormick (1998). There is pluralism in Europe, he acknowledged—adding that wise solutions could and should be found where legal solutions are not conceivable (531). MacCormick’s suggestions seem to anticipate what various courts, including the notoriously inconvenient Bundesverfassungsgericht, have learned to do, namely to establish interactive modes of adjudication (see, e.g., Viellechner 2012, Kuo 2013, Grimm 2012, 128–53). The reasons militating a positive reading of such tendencies will be submitted below. For now a pragmatic consideration may suffice: How could any judicial institution cope with the ever increasing complexity and growth of its workload and continue to convince national legal systems throughout an ever more diverse Union? This query implies that the integration project can no longer rely on, and be accomplished through, the one-size-fits-all philosophy which has guided it during its formative stages. The steadily advancing comprehensiveness and complexity of that project have generated ever more complex conflict constellations, which do indeed require cooperative efforts. Nowhere is that more obvious than in the present crisis. 2. CRISIS LAW Within a timespan of half a decade, 8 we have been witnessing the emergence of a new ordering of the Union introducing and using audacious new modes of governance and regulatory mechanisms such as the Europe 2020 Strategy (March 2010), the European Semester (May 2010), the

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EFSF Framework Agreement (June 2010), the Euro Plus Pact (March 2011) and the Six Pack (December 2011), the European Stability Mechanism (ESM, February 2012), the Treaty on Stability, Coordination and Governance (TSCG, March 2012), and the banking union roadmap (September 2012). In March 2013 the Two Pack submitted back in 2011 was adopted with parliamentary blessing. 9 Since all this is difficult to reconcile with the Treaties, in particular with the bailout ban provided for in article 125 TFEU, an ex–post-revision procedure amending article 136 TFEU has been undertaken so as to legalize financial assistance as of 1 January 2013. A particular, intriguing characteristic of Europe’s new modes of economic governance is the form of its crisis management. This managerialism is delicate for three interdependent reasons. First, through the supervision and control of macroeconomic imbalances, it disregards the principle of enumerated powers, and by the same token, cannot respect the democratic legitimacy of national institutions, in particular, the budgetary powers of parliaments. Secondly, in its departure from the one-sizefits-all philosophy orienting European integration in general and monetary policy in particular, it nonetheless fails to achieve a variation, which might be founded in democratically legitimated choices; quite to the contrary, the individualized scrutiny of all member states is geared to the objective of budgetary balances and seeks to impose the necessary accompanying discipline. Under the conditions of monetary unity, the member states can only respond to pertinent requests through austerity measures: reductions of wage levels and of social entitlements. 10 Thirdly, the machinery of the new regime, with its individualized measures which are oriented only by necessarily indeterminate general clauses, is regulatory in its nature, establishing a transnational executive machinery outside the realm of democratic politics and the form of accountability which the rule of law used to guarantee. Core concepts used by new economic governance cannot be defined with any precision, either by lawyers or by economists, and are therefore not justiciable (Adamski 2012a, 2012b). This implies that rule-of-law and legal protection requirements are being suspended. 11 This type of delegalization is accompanied by assessments of member states’ performance, which have been characterized as highly discretionary by economist Andrew Watt in an in-depth review of thirteen EU countries evaluated by the Commission (Watt 2013). In view of these difficulties, it does not seem comforting at all that the Fiscal Compact has entrusted the CJEU with the task of assessing compliance with “the budgetary position of the general government of a Contracting Party shall be balanced or in surplus” (article 3 1.a TSCG). 12 Is all this reconcilable with Europe’s commitment to democracy and the rule of law? Is Europe still concerned about its “highly competitive social market economy”? Queries of such abstract generality do not reach the judiciary directly. But Europe’s new modes of governance have been

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brought to trial at both national and European levels. This jurisprudence is an acid test of constitutional guardianship. 3. CRISIS JURISPRUDENCE The transformation of Europe’s constitutional constellation which we are witnessing is a challenge not only to the European political system, to the ingenuity of its crisis management, to trade unions and civil society, but also to constitutional jurisprudence: Did the amendment of article 136 TFEU under the simplified revision procedures of article 48(6) 13 respect the requirements specified therein? Is the “strict conditionality” requirement of the new paragraph 3 compatible with the principles of equality and mutual respect enshrined in article 4 TEU, or do we live under an illegal Treaty law, under unconstitutional constitutional provisions? Is the resort to the “Union Method” which has generated a second layer of law in the Union, ingeniously dubbed Unionsersatzrecht, 14 reconcilable with the respect the institutions of the Union and its member states owe to the cumbersome requirements spelled out in article 48(1) TEU? Are the new modes of economic governance compatible with the commitments of the Union to democracy and the rule of law enshrined emphatically in article 2 TEU? Does the parliamentary right to budgetary autonomy “result from the constitutional traditions common to the Member States” and should it hence be recognized as one of the “general principles of the Union's law” (article 6.3 TEU)? Last but not least: is the exercise of the constitutional guardianship of national constitutional courts subject to comprehensive supranational review by European authorities? These queries are not just feeding academic discourses. They were bound to reach the judiciary “at all levels” of the European system. There are few signs if any of the emergence of a common or nevertheless interactive constitutional crisis jurisprudence as constitutionalists have envisaged it (see, e.g., Viellechner 2012 and Wendel 2013). What we witness instead is a “principled” deference of the courts to the primacy of the political, which Federico Fabbrini has documented in a comprehensive comparative survey (2014). Seemingly paradoxically, this communality contrasts with the increasing entanglement of ever more constitutional courts in the supervision of Europe’s crisis management involvement. The review by the judiciary is certainly expanding, but at the same time supportive. This supportive function is plainly visible in the judgements of the two most influential courts, namely the German Constitutional Court (GCC) and the CJEU. It is a highly ambivalent exercise of judicial authority in view of the power asymmetries within the Union which characterize Europe’s crisis management. Since it is difficult to avoid misunderstandings of a critique of European practices in general and of constitutional adjudication in particular, it seems useful to underline in a

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preliminary way my perceptions of the challenges to which these courts are exposed. They are (at least) fourfold: 1. One difficulty is the delineation of their mandates. The German Court’s authority derives from the Basic Law, but the exercise of this authority affects the entire union. The mandate of the CJEU is not comprehensive; it builds upon the limited powers conferred on the Union and has, nevertheless, a much broader impact. 2. The issues to be adjudicated are at the borderlines of the legal system. Notions like “fiscal policy,” “economic policy,” “parliamentary budgetary autonomy,” which the courts are requested to assess, have no predefined legal contours and their juridification cannot build upon legal method and logic. 3. The courts are acting in a state of utmost uncertainty. Their holdings affect crisis management in the Union and the state of the Union as such. But the courts cannot be sure about the reasons for the crisis and the chances to overcome it. 4. Last but not least, the courts cannot rely on the kind of legislative guidance on which the ideas of representative democracies and separation of powers build. They are confronted with an exercise of regulatory and governmental powers by a supranational compound of European and national executive actors cooperating with the European Council and interacting with national governments—in modes beyond the ideational and conceptual frameworks of national and European law as we knew it. 15 This is, to put it mildly, a very uncomfortable constellation. Should we really expect the courts to hand down decisions which strengthen the social acceptance and legitimacy of the European project and its law under such circumstances? Might the judiciary be better advised to reject demands that cannot pretend to be guided by legal provisions and exercise judicial restraint? 16 IS THE GERMAN CONSTITUTIONAL COURT A “DOG THAT BARKS BUT DOES NOT BITE”? With its judgment on the Maastricht Treaty, its repeated insistence on Germany’s “democratic statehood” on the one hand and its consent to all treaty amendments on the other, the GCC has built up the reputation characterized by Joseph Weiler as that of a dog “that barks but does not bite.” 17 The financial crisis has provided various opportunities to consolidate that ambiguous reputation. This is how most observers perceive the recent series of “yes, but” decisions: the judgment of 7 September 2011 on the Greek bailout, 18 with the GCC underlining that the Bundestag must remain “the place in which autonomous decisions on revenue and expen-

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diture are made, even with regard to international and European commitments” (paragraph 124), the decision of 19 June 2012 on the complaint by the parliamentary faction Bündnis90/Die Grünen (“the Greens”) who alleged that the political rights of the German parliament had not been respected 19 and last but not least, the holding in the easily most spectacular of the litigations held until this point, which concerned the European Stability Mechanism (ESM Treaty) and the Treaty on Stability, Coordination and Governance on the Economic and Monetary Union (Fiscal Compact). 20 This latter event was spectacular indeed: not only the well-known professorial plaintiffs and Dr. Gauweiler, member of the Bavarian sister of the Christian Democratic Party, but also the parliamentary faction Die Linke (“the Left”) and no less than 37,000 citizens, among them very prominent figures, had filed a complaint requesting a temporary injunction, which would inhibit the entering into force of statutes dealing with the sovereign debt passed by the Bundestag and the Bundesrat on 29 June 2012 until the final decision of the GCC could be handed down. The anxieties of the many publics in the EU and elsewhere awaiting that judgment are easy to explain. Even though hardly anybody had any doubts about the outcome, given the constant reiteration by the German government of just how seriously it takes every judicial pronouncement by the GCC, the exact views of the highest judicial authority of the economically most powerful member state of the Union did matter. The outcome was as expected. The plaintiffs were disappointed, the government, “Brussels” and “the markets” were relieved. The resonance in academic quarters was unusually positive. 21 On closer inspection, however, the judgment seems highly troublesome. Its ambivalent nature stems, seemingly paradoxically, from the Court’s renewed defence of the budgetary power of the German Bundestag as a democratic essential. Paragraph 274 of the judgment reads: “By virtue of its approval of stability aids, the Bundestag exercises the influence demanded by the Constitution and is a participant in decisions on the amount, conditionality and length of stability aids. It therefore determines the most important conditions for future successful demands for capital disbursements under article 9 (2) ESM Treaty.” 22 This is a deeply problematic statement for two groups of reasons. One is factual and concerns the chances the Bundestag has to deliberate and to exercise influence on the bases. 23 A second one is normative and jurisprudential. The GCC subscribes to the practice of “strict conditionality” without even considering the compatibility of that practice with the European commitments to democracy and the rule of law. Compliance with that commitment is not just a supranational command. Respect for the constitutional principles which the member states of the Union have in common must be understood as a command of both international and German constitutional law. Ulrich K. Preuß (2013) has recently reconstructed the back-

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ground transformations on which that assertion rests: The (not so) splendid legacy of sovereign states which cared exclusively about national polity and the international system that remained in a state of nature has been thoroughly transformed. In particular constitutional democracies have become aware that democratic governance is conceivable only cooperatively—and requires hence the “recognition of the other.” Nowhere has this principle been more emphatically endorsed than in the European Union. 24 How, then, can the GCC content itself with assuring that its holding will protect the democratic rights of German citizens? Germany and its citizens are part of a Union of equals. Why is budgetary autonomy not understood to be a common European constitutional legacy, respect for which is demanded by article 4(2) TEU? The one-sidedness of this argument is not the only democratic failure within this judgment. Its disregard for “foreign” constitutional rights conditions the blessing of the “strict conditionality” imposed on financial aids. “Conditionality” replaces will formation and decision making of democratic polities with the authoritarian command of nonelected bodies. To put this slightly differently: The GCC argumentation only makes sense if and because the Court feels committed exclusively to Germany and to no one else. Hardly any commentator felt irritated. One notable exception deserves to be mentioned. The GCC talks about democratic essentials, Jürgen Habermas has observed (2012), but has Germany in mind. The one-sidedness of its decision seems indeed obvious and not so difficult to overcome. To be sure, the German court is not entitled to act as Europe’s constitutional guardian. But the GCC can be expected to spell out implications of Germany’s membership in a Union in which the concerns of all the member states and their democratic rights deserve recognition. Precisely that commitment should be understood as a dimension of the Integrationsverantwortung (integration responsibility) underlined so emphatically in the Lisbon judgment from 30 June 2009. 25 To rephrase the argument slightly: The GCC cannot and must not presume the authority to act as the guardian of European constitutionalism in its entirety. But it must consider how its jurisprudence might help to defend Europe’s democratic commitment. As this, unfortunately, did not occur, our hopes must rest on the CJEU. THE PRINGLE JUDGMENT OF THE CJEU AND THE METHODOLOGY OF ECONOMIC LAW The CJEU was given the opportunity to act as the guardian of European constitutionalism thanks to the complaints of Thomas Pringle, member of the Irish Parliament, against the involvement of his government in the establishment of the ESM and thanks to the readiness of the Irish Supreme Court to do what the GCC has so far anxiously avoided, namely to

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submit a reference for a preliminary ruling to the CJEU. Mr. Pringle commenced this litigation on 13 April 2012; the CJEU (sitting as Full Court, with all twenty-seven judges) handed down its judgment on 27 December 2012. 26 One thing both the German and the European proceedings had in common was that hardly anybody had serious doubts as to their outcome. The reasoning on which the defence of that outcome rests remains nonetheless significant. As a prominent commentator on the Pringle judgement puts it: “The judgment unfolds like a story, and even though the reader knows or can hazard a pretty good guess at the ending—that the CJEU will find that the ESM is lawful—the story is compelling nonetheless, since the last part of the judgment is also the denouement in which the CJEU saves the ESM from the most potent challenge to its legality” (Craig 2013, 3). Paul Craig’s praise of the European Court represents a particularly eloquent version of the nearly unanimous evaluation in the academic European law community. 27 Even though the CJEU result may have been unavoidable, the reasoning of the court and the approval which it found among so many renowned scholars is disquieting. This reserve stems from the unconditioned equivocation of the expediency, legitimacy and legality of the judgment. The difficulties which the court faced and their challenges thereby remain unnoticed and camouflaged. These challenges were methodological and conceptual. They originate in the “nature” of economic law. The objectives and methods of that discipline have long surpassed the inherited duality of facts and norms. Economic law does not relate directly to some factual “reality.” It reconstructs its object through its soto-speak artificial modelling and needs to refer to nonlegal knowledge in the design and objectives of the instruments it uses. Economic and monetary union as established by the Maastricht Treaty and complemented by the Stability Pact can therefore not be treated as a mere textual assemblage but needs to be understood as a juridification of an economic paradigm. These rules governing EMU and the institutions that were established were indebted to a monetarist program that was reproduced at European level by virtue of the guaranteed status of monetary policy and its anti-inflationary dedication to price stability and institutionalized by an independent central bank far removed from all political influence and placed firmly outside the institutional structures of the Union. Inherent to this philosophy is the separation of “economic policy” from “monetary policy,” the primacy of the latter and the operation of the constitutional framework without the guidance of a “political union.” “Fiscal policy” was of course a risk to all that. This is why a Stability Pact was needed. Article 122 TFEU with its restrictive definition of circumstances which justify financial assistance to a state in difficulties and the no-bailout provision of article 125 TFEU complement that edifice which deserves to

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be called an “economic constitution” (on that notion see Joerges 2005, 465). The whole project was thoroughly misdesigned and its failures became very soon apparent (Joerges 2005, 474). Underscoring these failures today means carrying coals to Newcastle. From the outset, noncompliance with the provisions of the economic constitution was unavoidable. It is simply a myth to assign the responsibility for its destruction to the nonobedience of Germany (Europe’s “sick man” after the nation’s reunification) and France (a country which had never under any government believed in something like the Maastricht philosophy). By now, however, after the crisis, obedience would have aggravated the damage which the monetary union has caused much more dramatically. This is the reason why Europe undertook all these hurried efforts which we have just characterized as “crisis law.” No fewer than three former judges of the GCC have expressed their dismay publicly. “Does necessity abide by no laws?” Ernst-Wolfgang Böckenförde asked as early as 21 June 2010 in the Neue Züricher Zeitung. “ Is there no time for the law?” Winfried Hassemer added in the Frankfurter Allgemeine Zeitung of 28 June 2012, commenting on the haste with which the government asked for parliamentary votes. Paul Kirchhof discerned a “constitutional emergency” in the Frankfurter Allgemeine Zeitung of 12 July 2012. Can any court dare not to comply with functional necessities? What would such resistance accomplish? These are questions that cannot be answered in a constellation of highest uncertainty both as to the reasons for the crisis and the means needed to manage it successfully or even overcome its disastrous impact. This, then, is the challenge: is there really no alternative to an unconditioned legalization of the practices of Europe’s crisis? Before embarking on this speculative query we should try to understand how the legal system has operated de facto. A NEW JUDICIAL ALLIANCE? Our courts were in a very uncomfortable situation. As already emphasized, nobody expected them to “bite” rather than “bark,” to take a stand against Europe’s political and economic elites and to jeopardize the enormous efforts to save the Euro. The crisis jurisprudence of the GCC and the CJEU is not only, and unsurprisingly so (Fabbrini 2014), identical in that respect. It is also very similar in the way both courts arrived at their holdings: Both of them accepted the primacy of the political over their judicial reasoning, the disregard for the law’s philosophy in the “light” of an emergency situation. The German court did this in two instances: The first was the acceptance of the wide latitude of the German parliament in the assessment of the risks Germany’s taxpayers incur through Europe’s crisis management. This element of the argument seems a bit fictitious

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but not wholly implausible. The second kowtow, however, is deeply problematic. It is true that the political process has established stringent conditionality. Does this imply that the courts must not look behind the façade of these so called “memoranda of understanding”? They could do better, I submit and will explain in my conclusions. The CJEU operated more elegantly. Craig praised the reasoning in Pringle as a fine synthesis “of text, background purpose, and teleology that constitutes the very essence of legal discourse” (Craig 2013, 3). Later in his editorial he rephrases his diagnosis and observes a “conjunction of text, purpose, and teleology that informs legal reasoning” (Craig 2013, 11). We are here coming closer to the crux of the matter. What Craig demonstrates is the volatility of our methods of legal interpretation. Unfortunately—or rather fortunately?—they may deliver different results. The American critical legal studies movement has called this phenomenon the indeterminacy or internal inconsistency of law. 28 What can lawyers do when they are confronted with such problems? They have to search for and rely on another type of rationality, one which cannot be detected by their inherited methods of interpretation. It must suffice here to refer back to the example of the economic constitution as juridified in the Maastricht Treaty. Only when read with the background of a monetarist neoliberal philosophy can we understand the premises of the law, its “theory” or “social model”; 29 only then does this assemblage of texts make sense. This is akin to, but not identical with, what Craig addresses as the “teleology” or “purpose” of the law. The difference between conceptual premises and purpose may seem marginal but is in fact essential. It is a characteristic of modern economic law that it cannot operate meaningfully without such backing. It shares this dependence with important fields such as environmental legislation and risk regulation. What, then, are we supposed to do when we realize that the premises on which Europe’s economic constitution was built turn out to be erroneous and untenable? Is the proper response that we then simply turn from a “teleological” interpretation to some other mode? Such a response is a thorough misunderstanding of the nature of economic law. It is not accidental that an effort to find new grounds was undertaken by a legal theorist, namely Kaarlo Tuori who, even prior to the judgment in Pringle, sought to anchor the disregard of the economic philosophy underlying EMU in a “second order telos”: A teleological interpretation should heed not only the particular telos of the no-bailout clause but also the more general objective of the regulative whole Art 125(1) is part of. And this “second-order” telos of the nobailout clause undoubtedly includes the financial stability of the euro area as a whole. This argument supports the legal impeccability of Member-State assistance, in spite of the no-bailout clause and the inapplicability of the emergency provision in Art 122(2) TFEU. But it also

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The CJEU seems close to that kind of reasoning. In paragraph 136 of the judgment we read: article 125 TFEU ensures that the Member States remain subject to the logic of the market when they enter into debt, since that ought to prompt them to maintain budgetary discipline. Compliance with such discipline contributes at Union level to the attainment of a higher objective, namely maintaining the financial stability of the monetary union.

These statements amount to an open replacement of the original Maastricht philosophy. There is one crucial difference, however. While it was possible to discern theoretical premises of the Maastricht economic constitution, this is no longer possible with regard to the new authorization of “the logic of the market” and its austerity requirements. It is of course true that the courts are not in a position to invent a new paradigm which could replace the inherited one. It is also a matter of course that they should then turn to the legislature and respect its messages. In the present case, however, the political emperor seems to have absolutely no clothes. Its promise that crisis law will bring economies in difficulty “back on track” lacks plausibility. The suffering imposed on a large number of European citizens may be merely senseless. The departure from Europe’s commitments to the rule of law and democracy comes at a high price. CONCLUSION What follows from all that? I am afraid that we did not yet arrive at the crux of the matter. If it is true that the law as it stands is simply unsustainable, if it is also true that economic law and policy need theoretical orientation, then we find ourselves at a complete loss. This, I am afraid, is our situation. And I am by no means the only one with such a depressing diagnosis. The discipline which guides the public perception of the crisis and produces expert advice for politicians is clearly economics: If the market failure—of the financial sector, what is in theory the most efficient of all markets—cannot be mastered without major state intervention and if the representatives of neoliberalism call for the help of the state as a matter of course—whereby, according to the prevailing doctrine, this market intervention can only cause inefficiency—then this should be conducive to a mind shift in the economy and a focus on alternatives in politics (Matiaske 2013, 83).

What sounds so convincing in theory does not occur in practice. What can be observed, however, is some awareness of this paradox. Among the

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masterminds in political economy who have articulated their uneasiness about the state of the economic art is Massachusetts Institute of Technology professor Peter A. Hall. He distinguishes three phases in the recent development of democratic capitalism. First, the experiences of the Great Depression and of World War II fostered the acceptance of Keynesianism as the theoretical background for the establishment of welfare states. Thereafter, post-1970, Keynesianism proved unable to explain and to cure the simultaneous increases in unemployment and inflation; this new experience initiated an era of neoliberalism, “the turn to the monetarist doctrines of Milton Friedman, soon supplemented by a rational expectations economics, provided an attractive new paradigm, which offered a remedy for inflation and a justification for enhancing the role of markets vis-à-vis the state in the allocation of resources” (Hall 2013, 190). After the failures of neoliberalism, a new paradigm shift is bound to occur. But, Hall continues, this can only occur in processes involving academics, politicians experimenting with new approaches—and such processes will take time. There are in my view two lessons for lawyers to learn from such observations. The first is that we must neither be surprised by the takeover by crisis managers and their practices of muddling through nor be arrogant in our evaluation of all that. Why not admit what Georg Anschütz exclaimed more than a century ago under similarly extraordinary constraints: “Das Staatsrecht hört hier auf” (Constitutional law ends here) (Anschütz and Meyer 1919, 906). To realize and to admit an overburdening of the law may help rescue its dignity and need not be understood as its resignation. The handling of uncertainty is long since an exercise undertaken at large and intensively discussed in the regulation of risks. What is not yet so widely realized are the affinities of “scientific,” “economic” and “social” uncertainties with the inherent instability of markets 31 and the constitutional configuration of modern societies in general and the European project in particular. 32 What we have to learn and develop in our deliberations on the malaise and the future of the European project is a new sensitivity for Europe’s conflict constellations. It is not only conceivable but seems highly likely that in not too far a future the new policy coordination within the annually repeating European Semester, the reporting and multilateral surveillance obligations, the macroeconomic imbalance procedures, the responses to country-specific recommendations will lead to new assessments of the weight of socioeconomic diversity, insights into the social embeddedness of markets, acknowledgement of the different regulatory, social and economic cultures in the member states, a search for innovative responses to complex conflict constellations—and sooner or later even to the developments of standards and criteria which discipline authoritarian managerialism. Similarly, although the European turn to “competitiveness” as a new pan-European value has so far not led to an organized transnational

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movement with an elaborated agenda, this may well happen in a not too distant future. What we can observe day by day already are conflicts between the European commitments to the rule of law and democracy and the practices of its crisis management. It should be a matter of time until these conflicts are framed as legal claims and reach the law in Europe. And why should national courts not play a significant role in such processes? Again, there is not too much evidence of such developments so far. But one signal has been sent by Portugal’s constitutional court. 33 That court has examined the compatibility of the austerity measures of the Portuguese government with the Portuguese constitution. The court did explicitly recognize “the seriousness of the current economic/financial situation and the need to attain the public-deficit goals included in the specific economic policy conditions laid down in the memoranda of understanding between the Portuguese government, the European Union and the International Monetary Fund.” However, it then objected to the implementation of these requests because of their disregard for the principles of equality and proportionality. That may not be much, but it is much more than nothing. 34 BIBLIOGRAPHY Adamski, Dariusz. 2012a. “Europe’s (Misguided) Constitution of Economic Prosperity.” Paper presented at the conference Crise et droit économique, organized by the Association Internationale de Droit Économique and the Law Faculty of the University of Wroclaw, on 8–9 November 2012, Wroclaw, Poland. Adamski, Dariusz. 2012b. “National Power Games and Structural Failures in the European Macroeconomic Governance.” Common Market Law Review 49: 1319–64. Anschütz, Gerhard, and Georg Meyer. 1919. Lehrbuch des deutschen Staatsrechts, 7th ed. Leipzig and München: Duncker & Humblot. Barnard, Catherine. 2013. “The Charter, the Court—and the Crisis.” University of Cambridge Faculty of Law, Legal Studies Research Paper Series 18/2013. Available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2306957. Accessed 18 March 2014. Beck, Gunnar. 2012. “The German Constitutional Court No Longer Takes Itself Seriously, but Germans Still Believe in the Bundesbank.” Eutopia Law. Available at http://eutopialaw.com/2012/09/22/the-german-constitutional-court-no-longer-takesitself-seriously-but-germans-still-believe-in-the-bundesbank/. Accessed 18 March 2014. Beck, Gunnar. 2013. The Legal Reasoning of the Court of Justice of the EU. Oxford: Hart Publishing. Beck, Gunnar. 2014. “The Legal Reasoning of the Court of Justice and the Euro Crisis— The Flexibility of the Cumulative Approach and the Pringle Case.” Maastricht Journal 20 (2013–2014): 635. Benz, Arthur. 2013. “An Asymmetric Two-level Game: Parliaments in the Euro Crisis.” In Practices of Inter-Parliamentary Coordination in International Politics—The European Union and Beyond, edited by Ben Crum and John Erik Fossum. London: Routledge: 125–40. Chalmers, Damian. 2012. “The European Court of Justice has taken on huge new powers as ‘enforcer’ of the Treaty on Stability, Coordination and Governance. Yet its record as a judicial institution has been little scrutinised.” The London School of

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Economics and Political Science. Available at http://blogs.lse.ac.uk/europpblog/ 2012/03/07/european-court-of-justice-enforcer/. Accessed 18 March 2014. Craig, Paul. 2013. “Guest Editorial: Pringle: Legal Reasoning, Text, Purpose and Teleology.” Maastricht Journal of European Law 20: 3–11. Curtin, Deirdre. 2011a. Executive Power in the European Union: Law, Practices and the Living Constitution. Oxford: Oxford University Press. Curtin, Deirdre. 2011b. “Keeping Government Secrecies Safe: Beyond Whack-a-Mole.” EUI Florence, Max Weber Lecture 7/2011. Available at http://cadmus.eui.eu/bitstream/handle/1814/18641/MWP_LS_Curtin_2011_07rev.pdf?sequence=3. Accessed 18 March 2014. Curtin, Deirdre. 2014. “Challenging Executive Dominance in European Democracy.” Chorley Lecture. Modern Law Review 77/1: 1–32. Dawson, Mark, and Floris de Witte. 2013. “Constitutional Balance in the EU after the Euro-Crisis.” Modern Law Review 76/5: 817–44. Deters, Henning. 2013. “National Constitutional Jurisprudence in a Post-national Europe: The ESM Ruling of the German Federal Constitutional Court.” European Law Journal 4 (June), DOI: 10.1111/eulj.12055. de Witte, Bruno. 2013. Common Market Law Review 50: 805–48. Dyson, Kenneth. 2013. “Sworn to Grim Necessity? Imperfections of European Economic Governance, Normative Political Theory, and Supreme Emergency.” Journal of European Integration 35: 207–22. Dyzenhaus, David. 2006. The Constitution of Law: Legality in a Time of Emergency. Cambridge: Cambridge University Press. Esposito, Elena. 2011. The Future of Futures: The Time of Money in Financing and Society. Cheltenham, UK: Edward Elgar. Esposito, Elena. 2013. “The Structures of Uncertainty: Performativity and Unpredictability in Economic Operations.” Economy and Society 42: 102–29. Everson, Michelle. 2013. “The Fault of (European) Law in (Political and Social) Economic Crisis.” Law and Critique 24: 107–29. Everson, Michelle, and Christian Joerges. 2014. “Who is the Guardian for Constitutionalism in Europe after the Financial Crisis?” In Political Representation in the European Union: Still Democratic in Times of Crisis? edited by Sandra Kröger. London: Routledge. Fabbrini, Federico. 2014. “The Euro-Crisis and the Courts: Judicial Review and the Political Process in Comparative Perspective.” Berkeley Journal of International Law 32/1. Grimm, Dieter. 2012. “Zur Rolle der nationalen Verfassungsgerichte in der europäischen Demokratie.” In Die Zukunft der Verfassung II, by Dieter Grimm. Berlin: Suhrkamp. Habermas, Jürgen. 2012. “Drei Gründe für ‘Mehr Europa.’” Forum Europa, Juristentag, Munich, 21 September 2012. Reprinted in Im Sog der Technokratie by Jürgen Habermas. Berlin: Suhrkamp Verlag, 2013: 13–137. Hall, Peter A. 2013. “Brother, Can You Paradigm?” Governance: An International Journal of Policy, Administration, and Institutions 26: 189–92. Hassemer, Winfried. 2012. “Is There No Time for the Law?” Frankfurter Allgemeine Zeitung, 28 June 2012. Hufeld, Ulrich. 2011. “Zwischen Notrettung und Rütlischwur: der Umbau der Wirtschafts—und Währungsunion in der Krise.” Integration 34: 117–31. Joerges, Christian. 2005. “What Is Left of the European Economic Constitution? A Melancholic Eulogy.” European Law Review 30: 461–89. Joerges, Christian. 2010. “Re-Conceptualising European Law as Conflicts Law: The ECJ’s Labour Law Jurisprudence and Germany’s Federal Constitutional Court.” In Interdisciplinary Studies of Comparative and Private International Law, vol. 1, edited by Bea Verschraegen. Wien: Jans Sramke Verlag: 7–18 Joerges, Christian. 2012. “Europas Wirtschaftsverfassung in der Krise.” Der Staat: 357–86; revised version: “Europe's Economic Constitution in Crisis and the Emer-

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NOTES 1. A notable, albeit more implicit, exception is Deirdre M. Curtin’s work (2011a, 2011b, 2014). 2. Suffice it here to refer to Dyzenhaus 2006, 35–54. 3. “When emergencies occur, legislatures acting under real constraints of time, expertise, and institutional energy typically face the choice between doing nothing at all or delegating new powers to the executive to manage the crisis” (Posner and Vermeule 2011). 4. See Joerges 2012, Marder 2013 and his contribution to the present volume, Dyson 2013, White 2013, Hufeld 2011. As a contrast see Posner and Vermeule 2010. 5. Case C-438/05, International Transport Workers’ Federation, Finnish Seamen’s Union v Viking Line ABP, OÜ Viking Line Eesti, [ECR] 2007, I-10779; Case C-341/05, Laval un Partneri Ltd v Svenska Byggnadsarbetareförbundet, [ECR] 2007, I-11767; Case C-346/06, Rechtsanwalt Dr. Dirk Rüffert v Land Niedersachsen, [ECR] 2008, I-01989. 6. Schmitt 1931, 103 (my translation): “the effort to establish something like a neutral State of appraisers, consultants and experts in which political decisions are delegated to persons with specific competences, in particular administrative, financial and economic expertise.” 7. Article 5(1) TEU. 8. For an elaboration of the following summarizing remarks, see Joerges 2012, Joerges and Weimer 2013. 9. The Two Pack provides for “enhanced monitoring and assessment of draft budgetary plans of euro-area member states, with closer monitoring for those in an excessive deficit procedure, and furthermore enhanced surveillance of euro area member states that are experiencing or threatened with serious financial difficulties, or that request financial assistance”; for details see http://www.europarl.europa.eu/pdfs/ news/expert/infopress/20130312IPR06439/20130312IPR06439_en.pdf. Accessed 18 March 2014.

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10. See the listing of pertinent requests in Dawson and de Witte 2013, 825–7, notes 33–37. 11. See the intriguing and concerned analysis by Everson (2013). 12. See the critique of Chalmers (2012). 13. Council Decision of 25.3.2011, OJ L 91/1 of 6.4.2011. 14. See Lorz and Sauer 2012, cited in the judgment of the German Constitutional Court of 12 September 2012, BVerfG, 2 BvR 1390/12 (discussed below), at paragraph 257 of the German version, and paragraph 226 of the English version. 15. “Compound executive” is the illuminating notion by which Curtin has characterized European praxis (2014). For related suggestions, see Joerges 2012. 16. The following analyses continue reflections found in Everson and Joerges (2014). 17. See Weiler 2009, 505 (commenting on the GCC judgment of 30 June 2009, English translation available at http://www.bundesverfassungsgericht.de/entscheidungen/es20090630_2bve000208en.html, accessed 18 March 2014). 18. Decision of 7 September 2011, 2 BvR 987/10 - 2 BvR 1485/10 - 2 BvR 1099/10, available at http://www.bverfg.de/entscheidungen/rs20110907_2bvr098710en.html. Accessed 18 March 2014 19. BVerfG, 2 BvE 4/11 vom 19.6.2012, Absatz-Nr. (1 - 172). Available at http:// www.bverfg.de/entscheidungen/es20120619_2bve000411.html. Accessed 14 March 2014. 20. Judgment of 12 September 2012 on the ESM and Fiscal Compact, 2 BvR 1390/12; an incomplete translation is available at http://www.bverfg.de/entscheidungen/ rs20120912_2bvr139012en.html. Accessed 18 March 2014. 21. See, e.g., the case annotation by Ruffert 2013a; Schmidt 2013; Schneider 2013; Schorkopf 2012. Sceptical voices are rare, but see Deters 2013 and Beck 2012. 22. My translation. Pertinent passages in the extract translation can be found at paragraph 125. 23. “Is there no time for the law?” asked Winfried Hassemer, a former constitutional judge (Hassemer 2012). By now, the potential of parliaments gets more systematic attention; see, e.g., Maurer 2013 and Benz 2013. 24. It has indeed been clearly and emphatically juridified in the principle of “constitutional balance,” reconstructed lucidly by Dawson and de Witte (2013). 25. Bundesverfassungsgericht, file no.: 2 BvE 2 / 08, 2 BvE 5 / 08, 2 BvR 1010 / 08, 2 BvR 1022 / 08, 2 BvR 1259 / 08 und 2 BvR 182 / 09, provisional English translation available at https://www.bundesverfassungsgericht.de/entscheidungen/es20090630_ 2bve000208en.html. Accessed 18 March 2014. See Joerges 2010. 26. Case C-370/12 Pringle v Ireland. 27. See, e.g., the annotations by Ruffert 2013b; Thym 2013; de Witte 2013; for dissenting views, see Beck 2013 and his rejoinder to Craig (Beck 2014), Dawson and de Witte (2013, 826–7); see also Barnard 2013. 28. The locus classicus is Kennedy (1976); for an update see Kennedy (1977). 29. Suffice it here to recall another locus classicus: Steindorff (1973, 217 and 1974, 621). 30. Tuori (2012, 34).—Tuori is anything but a Schmittian in his theoretical work (see, e.g., Tuori 2011, 111, 241). The recourse to “a second order telos,” which has no conceptual foundation and is of unvalidated effectiveness, has a Schmittian touch; see Maus 2005. I am afraid that the characterization of this praxis as “constitutionalisation of raw political power and temporary policy preferences, as not only illusionary, but also obscuring the destruction of law ” (Dawson and de Witte 2013, 822; Everson 2013, 125) is adequate. 31. But see Esposito (2011, 31–35; 2013). 32. But see Ladeur (2008). 33. ACÓRDÃO N.º 187/2013, Processo n.º 2/2013, 5/2013, 8/2013 e 11/2013, Plenário. English translation available at http://www.tribunalconstitucional.pt/tc/en/acordaos/ 20130187s.html. Accessed 18 March 2014.

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34. Potentially productive conflict constellations are emerging in the parliamentary responses to the Coordination of Economic Policy through the European Semester; see the European Parliament resolution of 23 October 2013 on the European Semester for economic policy coordination: implementation of 2013 priorities (2013/2134(INI)). Available at http://www.europarl.europa.eu/sides/getDoc.do?pubRef=-//EP//TEXT+ TA+P7-TA-2013-0447+0+DOC+XML+V0//EN. Accessed 18 March 2014. Remarkable also the critique of Troika practices by the EP, see http://www.euractiv.com/video/ meps-criticise-troika-inspectors-531545 (accessed 18 March 2014). I am indebted to Agustin Menendez, Leon, and Josef Falke, Bremen, for these discoveries, which deserve to be explored in more detail. For a discussion of the role of national parliaments and the EP see also the references in note 24 above.

FIVE Carl Schmitt and the Deconstitution of Europe Michael Marder

1. A SPECULATIVE CONSTITUTIONAL BUBBLE In a 2000 Cardozo Law Review article, “Carl Schmitt and the Constitution of Europe,” which developed out of the international symposium titled “Carl Schmitt: Legacy and Prospects” and held in New York City a year prior to the paper’s publication, Jan Müller raised a question we can finally respond to today, over a decade after its original formulation. “Does European integration prove,” he asks, “how useless the Schmittian intellectual tool kit has become, and, in particular, that ‘Schmittian sovereignty’ remains caught in existentialist, concretist ways of thinking, which have long lost touch with the intricate ‘legitimation through procedure’ or the legitimation through prosperity which some see at the heart of the EU?” (Müller 2000, 1779). In the intervening period, we have witnessed, among other things, a spectacular failure of the Treaty Establishing a Constitution for Europe, signed at the end of 2004 and rejected at the French and Dutch referendums half a year thereafter; the coming into effect, in 2009, of the Treaty of Lisbon, which focused on institutional procedures at the expense of actual constitution making; and the ongoing Eurozone crisis, which, as I shall argue, stands for the culmination of a certain economic and political speculation on the meaning, role and form of the EU. While the bursting speculative bubbles are all too familiar in the economic (and especially in the financial) sphere, they can similarly occur in the political (and especially in the constitutional) realm. Indeed, at present, the two kinds of 95

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speculation reinforce one another, aggravating the overlapping crises that show little sign of abating. Given the approach to crisis management adopted by the leadership of the EU, legitimation through prosperity has worked as poorly as legitimation through procedure. EU citizens, notably in the countries of southern Europe, have experienced sharp tax increases, longer work hours, and slashed social programs—factors that have had a markedly negative effect on their quality of life. These policies, moreover, do not emanate from a procedurally defined source. The indeterminacy built into the Union’s constitutional bases 1 has permitted a previously unspecified actor, or group of actors, to usurp the vacant political space of decision making. Without a modicum of legitimacy derived from any European Treaties, the austerity dictates of the Troika (comprised of the EU, the ECB and the IMF) have insinuated themselves as sovereign acts in the distinctly Schmittian sense of the term, that is, as extralegal decisions on exception. In so doing, they have curtailed the national sovereignty of the most adversely affected member states, forced to pass draconian budgetary measures and thereby to cede a large portion of their fiscal sovereignty. Economic inequalities among member states have become levers for the uneven distribution of sovereign decision making not only on the future of the EU but also on the national policies of countries steeped in the crisis. As a result, political inequalities within the Union have grown to unsustainable levels, threatening to undermine a common vision for the future of Europe. The curtailing of state sovereignty in parts of the EU was not at all proportional to the strengthening of transnational sovereignty that would be sufficient for guaranteeing the Union’s existence as a coherent political body. As soon as the era of prosperity has come to an abrupt end, the illusion of legitimacy has also evaporated, with opposition to the EU on the rise in the debtor as well as creditor states. The emergence of the Troika is the crowning moment of the tendency toward diminishing accountability, which, in turn, erodes the legitimacy of the EU (Arnull 2002, 1). As the dream of European integration teeters on the cliff of the Union’s disintegration, it is becoming clear that decisions on the shape of political life and political existential concerns cannot be easily dismissed. Much as policy makers have tried to “demystify” the problem of sovereignty by spinning a purely formal and procedural framework for the EU, they have failed in their calculated postponement of the decision about the form of the constitution. The crisis has made further delays in deciding this matter practically impossible. It is, to be sure, quite easy to detect key elements of the bourgeois Rechtsstaat constitutional form, such as “rights of the human person, freedom, democracy, equality, and the rule of law,” in documents containing the Union’s fundamental law. Rechtsstaat, usually translated into English

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as “the rule of law,” is in effect a compensatory mechanism that, according to Walter van Gerven, substitutes legal for political accountability. In his perceptive analysis, van Gerven admits that “the rule of law is not a well-defined concept, however, and defining it in a comparative law context is particularly difficult because the English concept has a different meaning and background than the German concept of Rechtsstaat” (van Gerwen 2005, 104). The indefiniteness of the concept goes hand in hand with the blurry constitutionality of the EU, hence failing in its compensatory capacity. A mere appearance of constitutional form is created—the appearance that turned into a spectral apparition and finally evaporated, the bubble having burst, at the peak of the political crisis. There is, moreover, a tremendous difference between the form of a constitution and a constitutional form, notably in light of the fact that the EU is not a state and should not be treated as such. Daniel Innerarity helpfully reminds us of this crucial distinction in his contribution to the present volume. Without lending a voice to political life and without soliciting citizen participation in decision-making processes, the hallmark elements of the Rechtsstaat form are an abstraction of an abstraction, founded upon the already distilled ideal principles of classical liberalism. In this, they replicate the process of financial speculation, where economic phenomena are increasingly decoupled from their material base. Depoliticized and neutralized as parts of “the cultural, religious, and humanist inheritance of Europe,” 2 these elements do not have a necessary inner unity, which could only emanate from the intensities of political existence. Hans Kelsen’s formalism may have prevailed under normal circumstances in the minimalist constitutional approach to the European Union; Schmitt’s existentialism, however, gains the upper hand at the time of crisis, itself deepened by these formalist illusions. Despite the aforementioned difficulties in translating the categories that pertain to nation-states into transnational political structures, we would be justified in considering the similarities between Europe in 2014 and the indecision of German constitutional monarchies with regard to the “democratic principle.” As Schmitt puts it in a passage from paragraph 6 of his Constitutional Theory: “In practical terms, that is, in historical and political reality, [the] condition of a postponed decision [on the form of constitution] was possible so long as the inner and external political situation remained harmonious and calm. In the critical moment, the unresolved conflict and the necessity of decision manifested themselves” (Schmitt 2008, 105). The same applies to the political crisis (“the critical moment”) of the EU, where uncertainty about the nature of the Union did not matter in the period of prosperity but grew into an “unresolved conflict” once that period was over. It was then, at the Union’s own critical moment, that the clandestine sovereignty of the Troika stepped into the vacant political and constitutional space of the EU.

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Admittedly, one cannot ignore important differences between the two situations, not the least of which is the presence or absence of the state form. Having said that, despite establishing the long-term posts of a president of the European Council and a high representative for foreign affairs, the Union has persisted in the condition in which Müller encountered it in 1999; it still falls “short of being a ‘proper state’ or a ‘proper federation’” and it still suffers from “constitutional deficit” (Müller 2000, 1777). Or, more exactly, it suffers from the deficit of the political. Schmitt begins his Concept of the Political with the now-famous statement: “The concept of the state presupposed the concept of the political” (Schmitt 2007, 19). The uncertain status of the EU, which is neither a state nor a federation, is merely a symptom for the dearth of political life at its foundations. Without drawing a strict parallel between it and a state, we can nonetheless ask: What is presupposed by the concept of the union? Nothing more than the concept of integration, assembly, the process of unification. This, presumably, is the lifeblood of the EU, its dynamic core analogous to the principle that, according to Schmitt, defines the nation as “a formless formative capacity”(Schmitt 2008, 129). Yet, European integration is, in the first place and in the last resort, economic or at best cultural rather than political. Having originated from the European Economic Community, the EU has never really been politicized. Liberal depoliticization, magnified manifold in the absence of the state, perfectly matches the essentially economic arrangement that has clothed itself in political discourses and institutions. It superimposes the already nonpolitical framework over the not yet political (economic) set of agreements. In Schmittian terms, the conspicuously apolitical or nonpolitical nature of European integration is not historically contingent but conceptually necessary. Tellingly, where the process has been political from the start, “unity” figures as an adjective in the names of countries: United States, United Kingdom, United Arab Emirates. In “the European Union,” on the other hand, it is featured as a noun, a substantive, which supplants the traditional political forms of “states,” “kingdom,” or “emirates” (principalities). While the old constitutional structures have been left behind, the Union does not put forth a new model of a political regime. It is now high time to remedy this flaw, to invent a political form for the EU, which would not inevitably fall back onto a federal or nationstate model prevalent in our history. Succinctly stated, our task is to desubstantivize the Union and to invest it with the dynamic content it enjoys in other political entities. With the economic foundations of the EU already weak, the political crisis has erupted in earnest. The introduction of a common currency in 1999 and other monetary stipulations of the Union were not grounded in a common fiscal policy, just as the community of “values” and of a shared European “inheritance” was not rooted in the existential vibrancy of political life and citizen participation. The prevalent mood of what

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Mark Gilbert dubbed “EUphoria” (2012, 173) further obfuscated this dearth of political and economic foundations. That is one of the reasons why the two crises have infinitely mirrored and intensified one another, plunging the EU into a deadly downward spiral. According to Marx’s explanation for the crises of capital, the tendency of exchange-value toward dematerialization severs it from its connection to the materiality of use-value, until this separation turns unsustainable and the concrete underpinnings of the economic sphere come back with a vengeance, asserting their irreducibility. Following Schmitt’s theory of political and constitutional crises, constitutions exhaust themselves in their formalization, that is to say, in the historical process, whereby a political form loses touch with the very political existence whose expression it was meant to be. Worse yet is the state of affairs where, as in the case of the EU, political forms and procedures conceal an initial lack of substance, the fact that they had nothing to do with the life of the entity they are said to formalize. The rigidly substantive notion of the Union serves as a prosthesis for this lack. Economic as well as political crises are, therefore, attributable to a certain exaggerated trajectory of dematerialization, an excessive detachment of institutions and institutional processes from their sources in actual existence, be it productive-economic or political life. In economic affairs, we speak of speculation and speculative bubbles, when, for instance, real estate prices no longer correspond to the actual conditions for their realization “on the ground.” Analogously, in politics we can discuss constitutional bubbles, such as the one that has now burst in the EU, when the inflated formal and procedural mechanisms lose touch with the existence of the entities they are supposed to express and to regulate. Jointly, the idea of speculative constitutional bubbles and the criteria Schmitt outlined in his Verfassunglehre for what (or who) constitutes a constitution help us understand the genealogy and the trajectory of the crisis now unfolding in the European Union. This explanatory framework also denotes the possible ways of overcoming the current predicament. It would not be sufficient to tweak and fine tune the existing political mechanisms of the EU, unless the Union as a form of political existence is rethought and, in fact, reconstituted. After all, crises are also opportunities for reassessment and structural change. The EU crisis should prompt us to go back to the drawing board, as it were, and to consider (1) whether the citizens of Europe share a common political existence and (2) if so, what the corresponding form of expressing this existence could be. What I call “the deconstitution of Europe” involves, like Derrida’s deconstruction, on the one hand, a critical and largely negative process of dismantling accelerated by the crisis, and, on the other, a new positivity, the possibility of reconstitution, faithful to the historico-political being of Europe. In what follows, I will take up Schmitt’s reflections on the vari-

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ous senses of constitution, demonstrating not only their incompatibility with the present state of the EU but also their relevance to attempts at reimagining the European political project. 2. EXISTENTIAL (ABSOLUTE) DECONSTITUTION The “absolute concept of the constitution” refers to the constitution as a whole (2008, § 1), united not by virtue of an external system of basic laws but thanks to the preconstitutional source from which these laws emanate and derive their legitimacy. In this case, legitimation is neither procedural nor pragmatic (outcome-based); rather, it implies the possibility of reconnecting what has been constituted with the constitution’s own existential foundation. Martin Loughlin is therefore correct to identify the absolute concept of the constitution in Schmitt with a “substantive condition” (Loughlin 2010, 211), though this condition describes a peculiar kind of substance, which is existential through and through. Besides citizen participation, a collective decision on the shape of the Union’s parties and actors, through whom it exists, belongs under this heading. Schmitt notes that “constitution in the absolute sense can mean, to begin with, the concrete manner of existence that is given with every political unity” (2008, 59), whereby the “state does not have a constitution” but “is constitution, in other words, an actually present condition, a status of unity and order” (2008, 60). In light of the political-existential vacuum at the core of the European Union, combined with the fact that it is neither a state nor a confederation of states, we may surmise that it is not a constitution, even though it claims for itself the right to determine the conditions of its unity and order. Since there is no “concrete manner of existence” to rely upon—or, since there is a profound divide between concrete existence and the legal documents that have purportedly constituted the Union—the status of the constituted entity is equivalent to a set of formal guidelines, to which potential member states must adhere if they are to gain the right of admission. The deficit of actual unity is remedied by the imposition of ideal unity, procedural at worst and metaphysical at best. Instead of strengthening the status of the EU, this imposition makes the political form of the Union ever more precarious: it sets the stage for a violent standoff between the emergent realities of political existence and the idealities of an alien form foisted upon them. A disconnect between the form of the European Union, devoid of political life, and the evolving, unstable circumstances of the collective existence of EU citizens is paramount for appreciating the challenges and promises of Schmitt’s existential concept of the constitution. Thus far, the crisis has already triggered a massive politicization of the vast strata of European populations. Suffice it to mention demonstrations against austerity measures in Greece and in Portugal, the indignados movement in

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Spain, student riots in Italy . . . All these are, without doubt, confined to the states of southern Europe severely hurt by the crisis. It remains to be seen, however, whether the north-south divide will prevail (as it did, for instance, in the events leading up to the American Civil War), effectively shattering the Union into two. Alternatively, the recently reactivated friend-enemy divides would carve up the continent along class lines, with national political and economic elites rightly viewed as foreign agents, the status they explicitly confirm by turning themselves into the functionaries of outside institutions, such as the Troika. (We should not neglect to remark that France is an exceptional case and something of an outlier: geopolitically, culturally, and economically situated between the north and the south, under the socialist presidency, it has sided squarely with its southern neighbors.) Be this as it may, the recent politicization of the growing economic gaps is the most significant existential issue du jour, further complicated by the institutional actions of the EU. If modern constitution making takes for granted the existence of a people, with its “formless formative capacity,” then the sharpest question arising in the European context is whether this existence is centred in “the people of Europe” or in “the poor of Europe,” now active on the informal political stage. Already in 2004, Étienne Balibar voiced his scepticism regarding the applicability of the American constitutional formulation, “We, the People . . . ” to the European case. In a book titled We, the People of Europe? (the noteworthy aspect of the title is the question mark at the end), Balibar goes as far as to criticize a “real ‘European Apartheid,’” which accompanies, as the reverse side of the same counterfeit coin, “a formal ‘European citizenship’” (2004, 121). The point is that European integration was accompanied by a certain segregation that overshadowed this unprecedented transnational project from its very inception. While ten years ago this divide applied to the noncitizens living inside the EU, today it cuts across the citizenry body itself. The fact that thousands of people are forced by dire economic conditions (or, as in Portugal, are encouraged by their own national governments) to immigrate out of or migrate within the EU effectively turns them into outsiders within their own transnational structure of citizenship. The instant such ostracism comes to pass, “real European Apartheid” no longer coexists side by side with “formal European citizenship” but dwells right at the heart of the latter, or, at least, on the peripheries of Europe. That is where the new state of exception is being demarcated and where the battle for European sovereignty, for the right to decide on the exception, is being waged. If this is what the “postconstitutional framing of citizenship” (Olsen 2012, 130) looks like, then we urgently need to revitalize the European constitutional process, rooted in the political existence of citizens and member states. The overt and overtly liberal neutralization of the political at the transnational level of the EU coincides with a subterranean current

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of politicization, without which there would have remained nothing but nihilism, fatalism and despair, that is to say, collective moods now pervading much of southern Europe. The EU’s self-proclaimed commitment to the values of peace, for which it was awarded the 2012 Nobel Peace Prize, exactly when the danger of fragmentation had reached its peak, was a hallmark of attempted depoliticization. Article 2.1 in the Treaty of Lisbon proclaims, “The Union’s aim is to promote peace, its values and the well-being of its peoples.” Now, as Schmitt argues in The Concept of the Political, the vision of a pacified globe is that of a world without politics (2007, 35), the world (we might add) befitting the existential vacuum of the EU. Peace betokens, in extremis, the sterility of public administration by technocrats, following a tendency actively embraced in some corners of the Union. And so, it induces a calculated amnesia of the hardfought historical and intensely political struggles for the rights of workers, women and underprivileged minorities. It was, of course, Adam Smith in The Wealth of Nations who gave the most honest economic interpretation of such values, predicated on free commerce and the mutual satisfaction of self-interest. Yet, when the paradigm of legitimation through prosperity becomes a thing of the past, giving way to a quasisuicidal compulsion toward austerity, the historical configuration of economic “peace” also changes. It can only come to mean “pacification,” supported by a threat that failure to comply with these sovereign dictates would usher in an even greater upheaval and calamity (default, expulsion, and economic, social and political collapse). The EU is invested in presenting itself as the sovereign kath’echon, the restrainer of chaos, or in Schmitt’s words, “the power that prevents the long-overdue apocalyptic end of times from already happening now” (1995, 436). But this is a risky wager, particularly when the existential intensity of informal political life is on the rise. 3. FORMAL DECONSTITUTION The constitution conceived as “a special type of political and social order” is the second meaning of the term Schmitt isolates early on in Constitutional Theory (2008, 60). It is important to understand that, in contrast to Kelsen and the neo-Kantians, the German jurist operates with a deformalized concept of form as a forma formarum and a direct expression of existential content; constitution is “a special form of rule not detachable from . . . political existence” (2008, 60). If so, then the observations on the subject of the existential vacuum of the EU apply to its substantial form. Since the latter does not exist, empty procedural formalism laboriously creates a façade of order, a speculative arrangement that is not grounded in actual political life. As a result, an artificial division of competences is established between national and European laws, putting in place an

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abstract order that suspends in midair the relations of supremacy and subordination. Hence, articles 3.a.1 and 3.b.1 of the Treaty of Lisbon: “The limits of Union competences are governed by the principle of conferral. The use of Union competences is governed by the principles of subsidiarity and proportionality.” Additionally, the inevitable clash between the constitutional traditions of member states and the legal order of the EU has never been resolved. As Theodore Konstadinides aptly encapsulated the issue in 2009: “The difficulty of assessing the autonomy of the Community with regards to its Member States lies in its perpetual boundary system and the—difficult to put into practice—system of competence delimitation” (2009, 273). This quandary is certainly unsurpassable from a practical point of view. But, theoretically speaking, when there is no political content to be expressed in a constitutional form, the latter proves to be irrelevant to the real question of competence, “Who can decide on the exception?” or, broadly, quis judicabit? This question is one that, at the same time, stubbornly crops up in periods of crisis and is swept under the rug as soon as it is raised. When austerity measures are implemented by national governments claiming that they have no other viable options at their disposal, it becomes obvious that competences no longer reside with these same governments. But neither do they lie with the EU as a coherently constituted transnational body politic, still bereft of “a special form of rule,” which would be grounded in its political existence. In limited situations, including the current crisis, decisions on the constitutional status of the European Union are inevitably made, be it intentionally or by virtue of a refusal to decide. The problem of sovereignty can no longer be displaced. Whereas, in keeping with Schmitt, “the word ‘form’ also denotes something already existing, a status” (2008, 60), the political deficit at the foundations of the EU prompts an ongoing search for the status, which, as we have seen, may change abruptly from one day to the next (think of Germany entering and unilaterally breaking agreements on the euro debt crisis). In and of itself, an ongoing quest for the status of the EU is in line with a commitment to democracy that cannot (and should not) ossify in a ready-made, atemporal form. Productive indeterminacy nonetheless requires a minimum of determination, if it is not to slide into sheer arbitrariness and disorder. Pure arbitrariness, reigning supreme in the gap between constitutional form and the content of political existence, ultimately invalidates a distinct order, however indeterminate the relations of supremacy and subordination it postulates. We should not be surprised if, between the lines of arbitrariness, we detect certain resonances of Hannah Arendt’s theory of totalitarianism (1979), where the endless displacement of power masks the death of politics and of responsibility. Schmitt’s sovereign decision on the exception makes sense exclusively within a given order that does not extend to the singularity of a case decided upon. Like many of his concepts, it stands

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between two antithetical ideas that, in the end, merge into one: (1) liberal legalism, where nothing is presumably exceptional and, therefore, everything is, since laws do not interpret themselves; and (2) totalitarianism, where everything is exceptional and, therefore, nothing is, since the exception is always an exception to a rule, which is absent from totalitarian regimes. At this stage in its history, the European Union is well on its way toward the convergence of these two ideas. And, much in the same manner, it exemplifies still another coincidence of opposites, both of them incompatible with the middling position of the political. The Union is the site where a happy marriage is consummated between disembodied spirit—announced in discourses that revolve around the abstract values of peace, human rights, and even democracy—and crudely materialist economic interest. 4. DYNAMIC DECONSTITUTION In line with the existential provenance of the form of constitution, such a form cannot be conceived as a static thing but, rather, as a process of formation, or, in Schmitt’s words, “the principle of the dynamic emergence of political unity, of the process of constantly renewed formation and emergence of this unity from a fundamental or ultimately effective power and energy” (2008, 61). Michael Salter observes that, from Schmitt’s perspective, “historically oriented and process-oriented approaches to constitutional law,” denoted by the idea of dynamic constitution, are opposed to normativism, with its “static, abstracted and non-contextual” analyses (2012, 53). Is the process of European integration constitutionally dynamic, or does it fall prey to the static order that suffocates political life? It would appear prima facie that, at least on the count of its dynamism, the EU framework might be spared Schmittian-inspired critique. Doesn’t the dynamic concept of constitution hold a redemptive hope for the EU, which prides itself on being a work in progress, driven by the still incomplete (and perhaps normatively unaccomplishable) tasks of European integration? I submit that integrationist dynamism is a mere appearance, for at least two reasons. First, qua “union,” the EU postulates prior and normatively inflected conditions for unity, with which candidate states must comply and which do not either dynamically or organically emerge in the heat of political life. Guided by the incomplete project of unification, the Union does not grow as a political organism but, instead, adds on new members in the manner of mineral accretion, as extraneous layers superimposed onto an equally dead core. In this respect, Christopher Bickerton pinpoints two unresolved paradoxes accompanying the transformation of nation-states into member states: “(1) a state-based process that appears as external to

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the state; (2) a fundamental process of social and political change that appears as apolitical, essentially technical, matter of institutional reform” (2012, 53). The ostensibly technocratic transformation into member states exemplifies the lack of dynamic constitution and the dearth of political meaning when it comes to the process of “unification.” Second, the inherent limits of unity are determined by the limits of EU competence that acknowledge an irreducible fragmentation of political existence, as diverse as the distinct constitutional traditions of member states make it out to be. The feigned dynamism of the Union’s expansion occludes from view the stagnation of its ossified form, drained of “effective power and energy.” Political dynamics, if any, enter through the back door; rather than a fruitful tension between national constitutional traditions and a transnational constitution, the traditions of select member states gain the upper hand at the transnational level. Dagmar Schiek writes: “Creation, specification, and interpretation of EU constitutional law is based on concepts derived from and developed in national legal cultures and above all the interactions of these legal cultures with EU law and, through this medium, with each other” (2012, 68). Because the national legal cultures of member states are far from homogeneous, the transnational constitutional process cannot but make selective choices and decisions on the inclusion of some and the exclusion of other constitutional traditions. The apparently apolitical products of EU constitutional law veil the power imbalances that have accounted for their shaping in the course of their “creation, specification, and interpretation.” Significantly, in the other rare instances when political life was allowed to flourish more or less directly in constitutional referendums, the form imposed from above was discarded from below. We know, from Schmitt’s analyses in Legality and Legitimacy, that even these bits of direct democracy are highly mediated, for example, by the way questions are enunciated, by the quite arbitrary determinations of what constitutes a majority (absolute or qualified), and so on. Still, this is not to diminish the work of constitution’s negative formation, whereby the political life that “rises from below to above” clashes with and rejects an alien political order that “proceeds from above to below” (2008, 62). This, then, is the basis for the Schmittian reductio ad subjectum or, in other words, for the idea that “only something existing in concrete terms can properly be sovereign” (2008, 63). When it comes to the subjectivity of sovereignty, at stake is not so much the legal personality of the EU as its constitutive subjectivity, a political will that generates its own unity (2008, 70). At the present conjuncture, two outlets for this generation are in effect in Europe, both of them acting outside the confines of the closed system of the fundamental law and ultimate norms of the EU. They are the suprapolitical economic agents and the infrapolitical seeds of popular sovereignty. On the infrapolitical level, the outlines of demoicracy change in relation to those Kalypso Nicolaïdis ascribes to this term: “a Union of

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peoples, understood both as states and as citizens” (2012) is supplanted by an alliance of people who are intensely distrustful of states and who are palpably disenfranchised by the status quo. And, on the suprapolitical level, international rating agencies, financial institutions (IMF) and banks (ECB) wield incomparably more power than the indebted member states. As often happens, the vacuum of political existence is filled with formally undefined struggles and with what Schmitt terms “apocryphal acts of sovereignty,” a necessary supplement to “the fiction of absolute normativity” (2008, 155). Just as the sovereign decision on the exception arises ex nihilo from the standpoint of the existing legal order, so these acts of sovereignty are apocryphal (that is to say, secret, encrypted, hidden or obscure) from the perspective of the normative constitutional framework. In point of fact, the so-called apocryphal acts of sovereignty—whether by the Troika or by national labour-union calls for general strikes—are within plain sight. From above and from below, these acts temporarily fill in the void, leftover by indecision on the EU constitution taken in the absolute, formal and dynamic senses. Although they generally animate the European body politic in an uneven manner, without bearing upon the EU as a unity, decisions on the exception made by these supra- and superpolitical actors tend toward synchronization, for instance, with general strikes coordinated to coincide in Portugal, Spain and Malta. Or, as Schmitt formulates this, with reference to the dynamic concept of constitution: “Political unity must form itself daily out of various opposing interests, opinions, and aspirations . . . It must ‘integrate’ itself” (2008, 61). CONCLUSION: TOWARD A NEW SELF-CONSTITUTION OF EUROPE? What remains, within the framework of the European Union, is the constitution in a relative sense, dissolved “into a multitude of individual, formally equivalent constitutional laws” (Schmitt 2008, 67). As this summum partes, the “constitution is neither more nor less than the totality of rules, regulations, and norms that organize the polity that it encompasses” (Burgess 2003, 152). The dissolution of constitutional unity is explicable with regard to the deficit of political vitality at its foundation; it is an expression without anything to express, devoid if not of meaning then of a connection to the sources of meaningfulness. The forgetting of constitutional unity and technical concern with constitutional details is well-suited to that institutional arrangement where unity does not actually exist, that is, one where it is not bound to the texture of political existence. Absent a common horizon of political life, member states of the EU do not speak in one voice either on the internal matters of a fiscal

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union or on foreign interventions, such as the recognition of Palestinian statehood and readiness for a military intervention in the Syrian conflict. The disparity in approaches to concrete domestic and foreign policies is indicative of a basic constitutional deficiency in the EU. The multitude of EU laws is groundless in a different sense from the groundlessness of the absolute concept of the constitution, which is rooted in actual existence and, therefore, self-grounded: “Every existing political unity has its value and its ‘right to existence’ not in the rightness or usefulness of norms, but rather in its existence” (Schmitt 2008, 76). Assuming that this necessary precondition for constitutionality has not yet been set in place, the main challenge Europe is facing—one that is more fundamental than solving the financial and political crises it is embroiled in—is finally to attain its political existence, and so to constitute itself. Self-constitution, for Schmitt, is a coming-into-existence of a political entity and, above all, the process of sovereign subject-formation. Not only the substance but also the essence of the constitution are to be deobjectified; while decisions on the form of collective life make up the substance of the constitution, political existence itself accounts for its essence (2008, 78). An entire philosophical (indeed ontotheological) genealogy dwells between these lines in Verfassunglehre: from the medieval idea of God as an immediate unity of essence and existence; through Hegel’s notion of Spirit, which is both substance and subject; to contemporary existentialism that, mutatis mutandis, transposes these qualities onto the finitude, or the facticity, of human life. In Heidegger’s view, this genealogy (and, with it, the history of metaphysics) reaches its closure in the age of technology that turns antimetaphysics into a new metaphysical paradigm. Schmitt’s political theses concerning the dangers of depoliticization and neutralization and his critique of liberal democracy, a regime befitting the technological age, echo Heidegger’s conclusions. For our purposes, the most significant corollary to the contemporary Weltanschauung in the sphere of governance is technocracy. Recent attempts at demystifying sovereignty, as an integral part of political metaphysics, tend to devolve into technocratic governmentality. And yet, the crisis of sovereignty in Europe, where that idea was born, foreshadows, rather than a soft descent into political nothingness, a harsh contestation—perhaps the harshest ever—of the meaning of the political. The question at stake in the coming years will be not “What is the best form for the EU constitution?” but “Who is its self-constituting subject?” The union of peoples, combining states and citizens in the constellation of demoicracy, is unlikely to undergo revitalization, seeing that the interests of these political actors have diverged like never before. Will the EU be a union of states, of peoples, or of a third, yet unknown, constitutional subject? As Balibar writes apropos of the second possibility: “It proves very difficult and embarrassing to ‘define’ the European people as the symbolic,

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legal, and material basis for the European constituency” (2004, 122). The difficulty and the embarrassment Balibar invokes have to do with an external attempt at defining the collective subject without affording it a chance for a self-definition that is the groundless ground of the constitution’s symbolic, legal and material bases. For various reasons, the recovery of this groundless ground does not, in Schmitt’s political philosophy, take the shape of a metaphysical search for origins. The work of selfconstitution begins in the middle, with the already given political existence, in the course of all-absorbing struggles, wherein the political subject is forged. Its daily formation is nothing other than the creation of a constitutional habitus. And it could well be that what we are now experiencing in Europe is, precisely, the emergence of such a habitus. BIBLIOGRAPHY Arendt, Hannah. 1979. The Origins of Totalitarianism. San Diego, New York, London: Harcourt. Arnull, Anthony. 2002. “Introduction: The European Union’s Accountability and the Legitimacy Deficit.” In Accountability and Legitimacy in the European Union, edited by Anthony Arnull and Daniel Wincott. Oxford: Oxford University Press. Balibar, Étienne. 2004. We, the People of Europe? Reflections on Transnational Citizenship. Princeton, NJ: Princeton University Press. Bickerton, Christopher. 2012. European Integration: From Nation States to Member States. Oxford: Oxford University Press. Burgess, J. Peter. 2003. “Culture and the Rationality of Law from Weimar to Maastricht.” In Darker Legacies of Law in Europe: The Shadow of National Socialism and Fascism over Its Legal Traditions, edited by Christian Joerges and N. Singh Ghaleigh. Portland, OR: Hart Publishing. Gilbert, Mark. 2012. European Integration: A Concise History. Lanham, MD: Rowman & Littlefield. Konstadinides, Theodore. 2009. Division of Powers in European Union Law: The Delimitation of Internal Competence between the EU and the Member States. Alphen aan den Rijn, London: Kluwer. Loughlin, Martin. 2010. Foundations of Public Law. Oxford: Oxford University Press. Maurer, Andreas. 2007. “The European Parliament between Policy-Making and Control.” In Debating the Democratic Legitimacy of the European Union, edited by Beate Kohler-Koch and Rudy B. Andeweg. Lanham, MD: Rowman & Littlefield. Müller, Jan. 2000. “Carl Schmitt and the Constitution of Europe.” Cardozo Law Review 21: 5–6. Nicolaïdis, Kalypso. 2012. “European Demoicracy and Its Crisis.” Journal of Common Market Studies 51/2: 351–69. Olsen, Espen D. H. 2012. Transnational Citizenship in the European Union: Past, Present, and Future. London, New York: Bloomsbury. Salter, Michael. 2012. Carl Schmitt: Law as Politics, Ideology, and Strategic Myth. London, New York: Routledge. Schiek, Dagmar. 2012. Economic and Social Integration: The Challenge for EU Constitutional Law. Cheltenham, UK: Edward Elgar Publishing. Schmitt, Carl. 1995. “Beschleuniger wider Willen, oder: Problematik der westlichen Hemisphare.” In Staat, Grossraum, Nomos: Arbeiten aus den Jahren 1916–1969, edited by Günter Maschke. Berlin: Dunker & Humblot. Schmitt, Carl. 2007. The Concept of the Political, expanded edition, translated by G. Schwab. Chicago and London: The University of Chicago Press.

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Schmitt, Carl. 2008. Constitutional Theory, translated by J. Seitzer. Durham, NC and London: Duke University Press. van Gerven, Walter. 2005. The European Union: A Polity of States and Peoples. Stanford, CA: Stanford University Press.

NOTES 1. “Evidently, the Union’s constitutional bases do not dictate a clear nomenclature of procedures, actors to be involved, and policy fields to be applied” (Maurer 2007, 76). 2. See article 1.1a of the Treaty of Lisbon.

SIX A Hidden Asset in Times of Crisis The EU’s Unbound Constitutional Quality Antje Wiener

Undoubtedly, 1 the European Union (EU) has had its share of the global financial crisis, and the impact is still being felt—in some member states more than in others. While the economic and political repercussions of the crisis will linger for some time, to be sure, I argue that all is not lost, for the EU is able to resort to a sustainable constitutional quality. This quality’s sustainability rests on two factors: first, it is used as a reference frame by others who choose to copy bits and pieces of the EU’s constitutional setting, and secondly, it represents a unique feature of nonstate polities on a world scale. Given this achievement, we should therefore specify which of the EU’s policy areas are in crisis, and the effect this will have for the EU in the long run. The argument, which this chapter seeks to advance, is that as the world’s leading “non-state polity” (Wiener 1998a), the EU has been generating a set of political institutions and constitutional norms over the past six decades. They form the substance of the EU’s specific unbound constitutional quality, which is an underestimated EUropean trademark. For, when situated within the larger global realm, the EU is the world’s leading normative order to practice “unbound constitutionalism.” 2 In an increasingly pluralist global constitutional setting where international organizations constitutionalize their governance procedures by adding constitutional principles (De Búrca 2009), other regional organizations, such as, among others, the South African Development Community (SADC), the ASEAN Economic Community (AEC) or Mercosur, 111

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have begun to copy some of the EU’s constitutional quality. In the following, I argue that this interest in copying bits and pieces of the EU’s institutional and constitutional setting has contributed to ascribing the function of a blueprint to the EU. Resulting from a series of interactive processes, the EU has become a reference for other regional organizations as a bearer of unbound constitutional quality. This outside referencing enhances the EU’s own interventions in global constitutional politics (Isiksel 2010). Once approached from this global perspective, the EU’s current crisis can also be read as part of the larger success story, namely that of building constitutional quality through unbound constitutionalization. Europeans, and especially those directly involved in running the European Union’s day-to-day policies or, in fact, those studying European integration from their respective academic vantage points of law, political science, economics or sociology or other fields, have been predominantly engaged in close observation of the media’s take on the “euro crisis” for the past five years. And rightly so, because as Eric Jones has successfully demonstrated, the tipping point of financial markets is in no small part fabricated by “perception” (Jones 2009). However, while European politicians have been busy discussing the financial crisis at home, elsewhere the Arab Spring brought bread-andbutter issues of constitution making to the global stage. In the process, many of the core values of the EU’s normative order have been addressed, albeit with quite different meanings attached to them. This has created some confusion among European and American commentators who were put on the spot to decide whether, for example, the events following the Egyptian referendum on 30 June 2013 were to be understood as a “military coup,” as most Western media and politicians insist, quite in line with supporters of the Muslim Brotherhood as the party which was removed from power, 3 or whether the democratic revolution was experiencing its “second wave,” as held by liberal Egyptians who endorse a pluralist democratic setting rather than authoritarian rule. 4 It is argued that, given the ongoing and pressing search for constitutional ground rules as protest movements demanding democracy, justice and equal rights have become active around the globe, the EU’s specific type of unbound constitutionalism provides important cues for democratization in contexts of postconflict or postrevolutionary political change, public diplomacy and the globalization of political protest. The key for that attraction is to be found in the fact that EUropean constitutional quality has developed unbound from the state. In addition to statebound constitutionalism in its member states and elsewhere, the EU has thus contributed to establishing a novel constitutional pluralism (Walker 2000, Maduro 2003) and demonstrated that this model is not without political teeth, as not only the ECJ’s judgment in the Kadi case demonstrates (De Búrca 2009, Isiksel 2010).

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To demonstrate the potential political impact of this model, this chapter presents the practice of blueprinting as a bottom-up alternative to the norm diffusion approach of global governance theories (Alter et al. 2012) on the one hand, and the normative power approach (Manners 2002, 2006, and 2013; Nicolaïdis and Whitman 2013; Whitman 2013) on the other. It argues that notwithstanding the ongoing crisis talk that has been permeating European discourse in public and private households alike, European constitutionalism has developed into quite a success story that is largely unknown to most people. This chapter further argues that the political value-added of this story is less a result of the agency of European policy insiders than the decision of outsiders to pick and choose from the EU’s normative order what they consider relevant for their specific purposes. This practice of picking parts of European constitutional and institutional settings, which comprises the European normative order, is defined as blueprinting. Thus, by returning to the sociology of knowledge and introducing the concept of blueprinting, this chapter adds an interactive take to “normative power Europe” literature (Manners 2002, 2006, 2013; Sjursen 2006; Nicolaïdis and Whitman 2013). The following develops the argument in four steps: section 1 introduces and details the argument. It presents blueprinting as a practicebased alternative to political and legal norm diffusion of global governance theories, on the one hand, and the normative power approach, on the other. Section 2 introduces the concept of unbound constitutionalism. Section 3 presents the three distinct approaches to studying normative change in relation to the EU, that is, norm diffusion, normative power and critical norms research. Section 4 turns to explorative examples of regional organizations that refer explicitly to what they consider successful experiences with EUropean constitutional and institutional settings from elsewhere with a view to building political communities outside Europe. 1. BLUEPRINTING NORMATIVE ORDER The argument builds on the observation that the EU’s political process of integration has established an institutional and constitutional setting, which now amounts to a blueprint of sorts for other regional and international organizations around the globe. The interesting aspect of the concept of blueprinting, which will be detailed below, is indeed the fact that it is an unfinished and ever-changing reference, which has therefore never been fully adopted elsewhere, despite a range of adaptations of bits and pieces of the EUropean “constitutional architectonic” (Isiksel 2010; Curtin 1993). It, therefore, remains subject to translation. Importantly, and not at the forefront of the European community of researchers and politicians’ respective preoccupation with challenges faced by the EU’s

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management of the financial crisis, other actors have been engaged in copying some of the EU’s political and legal structures. By doing so, these others have contributed to bestowing a blueprint function of sorts to the EU’s normative order. The gerund, that is, blueprinting, is used to express the cognitive action of others and the referential role of the EU in this interaction. Blueprinting includes two distinctive activities: as a political practice, blueprinting involves a conscious choice to copy an institutional and/or constitutional detail. As a social interaction, it extends beyond that decision. Blueprinting comprises three steps: first, approaching the detail in the European context of origin from the outside; second, transferring it to another outside destination; and third, enacting it according to the normative structure of meaning-in-use of that other context. This complex interactive process pitches unbound constitutionalism as analytically distinct from the unilateral action of diffusing norms from Europe toward other political orders, for example, through “contagion” (Manners 2013, 215), by compliance mechanisms (Schimmelfennig and Sedelmeier 2005) or by “transplanting” them (Alter et al. 2012). I contend that the complex interactions that are conducive to the ways in which norms, ideas and principles are incorporated from one context to another provide a vital access point for assessing the ultimate meaning that is attached to—and can therefore empirically be read off of—respective norms. As critical norms research indicates, norm interpretation depends critically on the cultural background experience of those who enact a norm. Thus, “binary opposition” analysis (Milliken 1999; Saco and Weldes 1996) has shown, for example, that even long-term EU member states, such as the United Kingdom and Germany, reveal different interpretations of core constitutional norms such as democracy, the rule of law and fundamental rights (Wiener 2008). Given these distinctions among EUropeans with shared normative roots, norm transfer between contexts that have greater differences regarding their respective cultural repertoires than the Brits and the Germans is expected to impact the actual normative meaning that is generated quite decisively. In a global context where constitutionalization is increasingly unbound from modern state institutions, for example, through the transfer of core constitutional principles to regional and international organizations, the interpretation of these norms is of increasing importance. It follows that the value-added of normative power Europe ultimately depends on how EUropean norms and constitutional quality are perceived from the outside and enacted elsewhere. Especially critical legal research has addressed this problem in conjunction with the transnationalization of the law, which has raised issues of understanding in relation to crossreferencing and cross-fertilization. Here, the point has been made that a translation of legal meanings has become necessary (Slaughter 2003; Walker 2003). To understand this effect and the related challenges of

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norm transfer, more detailed empirical research is required. The following elaborates this distinction in conceptual and empirical detail and presents the reflexive approach to unbound constitutionalism as part of a new research programme on global constitutionalism. 5 2. UNBOUND CONSTITUTIONALISM Why does unbound constitutionalization matter to others? Academics have studied constitutionalization both in the context of regional organizations such as the EU and global international organizations such as the United Nations (UN) for about two decades now (see, for example, Cohen 2012, Craig 2001, De Búrca and Scott 2000, De Búrca and Weiler 2012, Weiler and Wind 2003). However, our knowledge about the motives for constitutionalization is still not matched by deeper knowledge about the normative substance that is actually generated by constitutionalization. To get a better grasp of the latter, this chapter suggests examining social practices “on the ground.” In contradistinction to the literature that believes global constitutionalization will eventually lead to a global constitution (Habermas 2011), or have a functional effect on solving the legitimacy problems of global governance (Peters 2009), unbound constitutionalism addresses an alternative to rather than a replacement of statebound constitutionalism. That is, once spilled over into the global realm, constitutional norms, principles and regulations help change or bring forth constitutional quality, which is indicated, first, by a constituent power and, second, by shared normative roots. In principle, according to constitutional theory, a constitution serves to check societal actors in their interrelation, warrant access to protection, and entitle the governing institutions (the pouvoir constitué) to act on behalf of the community of citizens (the pouvoir constituant) (Möllers 2007; Loughlin and Walker 2007). A constitution keeps law and politics “in check” (Snyder 1990). The relations between the constitution and the community are guided by constitutional principles and norms. Given that a constitution’s substance is stable, and that its principles, norms and procedures remain valid over time, notwithstanding the changing group of citizens as members of this community, the reference to the citizenry as constituent power is a necessary condition for a text to be “of constitutional quality.” It is therefore the first indicator of constitutional quality. However, it is important to note that—whether written or unwritten—a constitution derives its authority from sources that are external to the constitutional text (or routine as in the UK context). That is, a constitution’s legitimation stems from normative foundations that are socially constructed (Reus-Smit 1997). This external source of authority is contingent on the larger historical context in which a political community is

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constituted. This external source of authority is the second indicator of constitutional quality. With the establishment of the international community through international conferences, conventions and treaties, and in parallel to the strengthened and growing political authority of modern nation-states (Tilly 1975), constitutionalized communities emerged as state-bound. That is, throughout the period of modern state building, constitutions were expected to refer to a specific population, a territory, and a government. Classical international law was grounded on state-bound constitutionalism and the exclusive role of states in forming international organizations. However, the paradigm of state-bound constitutionalization rests on two shortcomings: first, it involved drawing new political boundaries that did not overlap with social and territorial borders (especially in Africa), and second, it put constitution making that was not linked to the central institutions of the state to one side, as demonstrated for example with the Canadian First Nations, the Amazonian Yunamami, or the Mexican Indian nations. With the transfer of constitutional norms and principles from the domestic realm into the global realm, this process of state-bound constitutionalization has become conceptually unbound. This process involved, for example, attaching norms, principles and procedures to international organizations. While the relevant literature, mostly of international legal background, has dubbed this process “global constitutionalization” or “constitutionalization beyond the state” (Dunoff and Trachtman 2009b, Klabbers et al. 2009, Peters 2009, Weiler and Wind 2003), we have suggested working with the concept of constitutional spillover under conditions of unbound constitutionalism elsewhere. While the spillover is due to functional considerations, the result involves shifts of loyalty as well as changes of political community formation (Haas 1968; Schmitter 2003). DEFINITIONS Given the relative novelty of the emerging field of global constitutionalism, and especially taking into account this field’s interdisciplinary nature, the following clarifications are necessary. In accordance with the leading literature in the field of European constitutionalism (Craig 2001; De Búrca and Scott 2000; De Búrca and Weiler 2012; Maduro 2003; Snyder 1990; Walker 2000; Weiler 1999; Weiler and Wind 2003), the term constitutionalism is defined as a theoretical framework (rather than a phenomenon) that guides research on constitutionalization. Given that theories reflect their context of emergence (contingency condition), it is necessary to distinguish among different cultures of constitutionalism such as, for example, ancient, modern, European, Confucian or late modern constitutional culture (Tully 1995; Wiener et al. 2012a). Accordingly, global con-

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stitutionalism is defined as a framework approach to study constitutionalization in the global realm. While the (predominantly legal) literature addressing this phenomenon is relatively recent, an emerging interdisciplinary field of global constitutionalism is noticeable nonetheless. It can be roughly distinguished according to three schools of functionalist, normative and pluralist constitutionalism (Wiener et al. 2012b). According to the first school, constitutionalization in the global realm is based on a functionalist rationale. It has been developed with reference to “taxonomic” rather than “normative” criteria (Dunoff and Trachtman 2009a) to enhance the legitimacy of global governance institutions (Buchanan and Keohane 2006; Slaughter 2003; critically, Cohen 2012). The second takes the opposite view, arguing that global constitutionalization is a necessary normative corrective, given that through the transfer of constitutional norms and principles, statebound constitutionalization has lost normative quality (Habermas 2011; Peters 2009). While the first view can therefore be considered “positivesum” constitutionalization, the second view is working with a concept of “zero sum” constitutionalization. The third school takes a pluralist view that expects and endorses the parallel existence of different types and degrees of constitutionalization (Maduro 2009; Halberstam 2010; Walker 2000). Its understanding of constitutionalization is neither that of a “positive-sum” nor that of a “zero-sum” game, for it takes a relational perspective on constitutionalization which considers the normative potential of constitutionalization to reflect the context conditions under which constitutional norms are enacted. In other words, it conceptualizes constitutional quality as socially constituted rather than metatheoretically given. By doing so, we expect to uncover heretofore unnoticed indicators of constitutional quality, akin to the “hidden” constitutional processes Tully located in Canada as well as “invisible” structures of normative meaningin-use that generate both a shared reference to a selected few and a source of contestation for many others (Wiener 2008). Against this background, unbound constitutionalization is defined as a process that either unbinds or is distinct from state-bound principles and norms and asks a question about constitutional quality: If constitutional quality is authoritative within state-bound contexts where constitutional norms, principles and procedures are relatively stable and enduring over time, does the transfer of constitutional norms beyond state borders change constitutional quality? The answer builds on a pluralist approach to global constitutionalism, which includes a potential global plurality of constituent powers and external sources of authority rather than working with the assumption of a bounded plurality of constitutional authority including internal and external constitutional pluralism pending on given “sites of power” (for the latter, see Maduro 2009). Following the law-in-context approach (Kratochwil 1989; Onuf 1994; Snyder 1990), constitutionalization is defined as a practice category and therefore a

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phenomenon, which remains to be assessed through empirical observation. In turn, constitutionalism is understood as a theoretical framework including different cultural and temporal contexts, an academic “artefact” (Weiler 1999) that comprises the stipulation of constitutional norms, principles and procedures in other than state-bound environments. This practice-based approach is aware of the organic interaction of “process” and “thing” (Onuf 1994). It examines unbound constitutionalization from a comparative perspective that takes into account cultural diversity as a formative and distinctive dimension of constitutionalism. Rather than applying a “Westphalian discourse” of state-bound constitutional communities, the paper therefore encourages alternative visions of community because the processes of attaching norms, principles and procedures to international organizations reveal a change towards processes of constitutionalization, which are unbound from the state. These processes are also defined as unbound from the state in order to indicate that actors other than the state are involved. Unbound constitutionalization involves “state-plus” actorship, yet it is increasingly distinct from the group of citizens as the constituent power of nation-state communities. 3. EUROPEAN NORMATIVE ORDER Following the “normative turn” that mainly focused on the quality of EU polity in the late 1990s (see for example Shaw 1999; Bellamy and Castiglione 2003; Jones 2009), there are three approaches in the current literature that address normative change: first, the normative power approach that was kicked off by Ian Manners a decade ago and has been thriving ever since as an alternative soft-power perspective to international relations theories’ neorealist perspectives (Manners 2002, 2006); second, the norm diffusion approach that was developed in conjunction with the prospect of massive enlargement to the east (see for example, Schimmelfennig and Sedelmeier 2005). The third approach is critical norms research that was developed with reference to the constitutional debates in the EU and beyond (Wiener 2008) as one of several precursors—next to democratic theory and international law—to the new interdisciplinary theory of global constitutionalism. The following discusses the distinct ways in which these three approaches address normative change according to their respective tools. It is argued that the latter in particular matters for its focus on unbound—as opposed to state-bound—constitutionalization when it comes to choosing blueprinting bits and pieces of the EUropean normative order. While still in the making, staking out an interface between law, political science and sociology, research on unbound constitutionalism is opening new analytical perspectives for a reflexive perspective on political change, especially in its pluralist variant (De Búrca 2009; Maduro

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2009; De Búrca and Weiler 2012; Wiener et al. 2012b). This builds on a claim from an observer from Egypt who noted that “global constitutionalism is the answer” to postrevolutionary political settlements. This section offers a brief recollection of a sociology of knowledge approach that laid the theoretical framework for constructivist theories of European integration. To understand how normative structures of meaning-in-use are enacted and why this matters to blueprinting, it stresses the social construction of normative order as a complex social process. The reconstruction of this emergence of normative order distinguishes among the construction of three types of norms: fundamental norms on the macro level, organizing principles on the meso level and standardized procedures at the micro level (Wiener 2008). As will be shown, the meso level norms are the so-called “ground rules” that matter most at a time when new political orders are on the brink of being set up in contexts that are unbound from the state. The Social Construction of Europe By engaging constructivist approaches to integration, this section demonstrates that while constructivists were engaged in “seizing the middle-ground” between positivists’ rational choice approaches on the one hand and reflexive sociology of knowledge approaches on the other, in the end, the “limits of closing the gap” between the two sides prevailed. As a result, the common constructivist research focus on norms was established by a thriving norm diffusion research culture that focused mainly on compliance with the Copenhagen criteria prior to and following massive eastern enlargement in 2004 (Schimmelfennig and Sedelmeier 2005). In the 1990s, constructivist theories of European integration brought the ontological stress on ideas, identities, norms and language to the by then rather stale theoretical repertoire of grand theories to the table. This move followed the key argument of Berger and Luckmann’s sociology of knowledge that all knowledge is socially constructed, and that therefore, interactive practices in context mattered for our understanding of European integration. In the beginning, the key role of constructivist thought lay in providing a metatheoretical move away from a baseline between realist and poststructuralist perceptions of the EU that had remained largely incommunicado. Constructivists then had an enabling function with regard to academic exchanges about the leading questions, main concepts and methodological approaches that mattered for European integration theories. This communicative turn had a hugely informative impact on the entire discipline of European integration, for it made the discipline attractive to students and serious academic debate. Based on this toolkit, middle-ground focused constructivists soon generated an impressive number of case studies.

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The Social Construction of Normative Order Friedrich Kratochwil’s erstwhile query about the way norms “work” (1984) was approached from increasingly different perspectives that resulted in three distinct constructivist strands. Conventional constructivists were interested in pursuing the question of how norms influence state behaviour; consistent constructivists studied the way new rules were set through speech acts, thus concentrating less on social practices than on discursive and strategic interventions to change the rules of the political game; and critical constructivists questioned the shared meaning of norms that remained invisible to behavioural and strategic studies, and therefore suggested making invisible meanings of norms accountable with reference to enacting normative structures of meaning in use and cultural repertoires (Wiener 2008). Instead of engaging with the development of these three constructivist strands—that ultimately mattered more for the development of international relations theories than European integration studies—this section points to the widening gap between positivist and normative approaches. For it is this quite noticeable gap in the literature that matters most for understanding the EU’s impact on the global normative order, and hence for addressing the question raised by this chapter. On the one hand, the EU is portrayed as a norm entrepreneur with long-term experience in diffusing norms to candidate countries, and subsequently the power to facilitate norm diffusion to postconflict areas so as to improve “governance in limited statehood.” This literature builds on compliance, cooperation and governance literatures, respectively. On the other hand, the EU has been conceptualized as a “normative power,” a rather more elusive civilizational force of sorts in the global realm (Manners 2002, 2013; Whitman 2013). At first glance, both approaches do have their merits, especially for European foreign offices that demand manuals for operations in postconflict areas. Thus, the former diffusion approach offers relatively straightforward fixes that take their central persuasive force from compliance literature (Schimmelfennig and Sedelmeier 2005), while the latter normative power approach paints a picture of the EU’s soft power as a civilized counterpart to the United States and other hard powers (Whitman 2013). Especially the latter approach has taken pains to develop a more sophisticated critical view of the transfer of norms, ideas and values from the EU to the global realm (Manners 2013, and contributions in Whitman and Nicolaïdis 2013). Thus, Whitman notes that “By distinguishing the concept of normative power from the previous discussions on military power and civilian power, Manners placed the identity and nature of the Union into a different framework in which he aimed at replacing ‘the state as the centre of concern’ and refocusing on the ideations and power of norms as the substantive basics of the EU studies” (Whitman 2013, 172). While Whitman is right in stressing the importance

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of the shift in focus, this chapter contends that the potential of this normative perspective remains unexplored. This is largely due to setting to one side the sociology of knowledge approach that lay at the centre of the erstwhile constructivist turn in European integration theories. That is, like the norm diffusion approach, the normative power approach ultimately operates according to the neo-Kantian regulative ideal of political organization that is common to western European nation-states and which rests on the underlying belief in the universality of western European norms, ideas and values and their presumptive value added elsewhere (see Habermas 2011; and critically Tully 2008). By contrast, this chapter seeks to elaborate on the underresearched potential of “interaction” as a dynamic concept, which had been introduced by early international relations constructivism (Wendt 1987) that built on Giddens’s structuration theory as a further development of sociology of knowledge approaches to societal development (Giddens 1979). This dimension is crucial with regard to studying the way norms work. For it is always ultimately and necessarily an empirical focus which is able to reveal how norms work in practice and thereby bring the constructive force of norms to the fore in any context. Drawing on critical norms research, I therefore work with a bifocal approach, which explores normative questions with reference to empirical research. Two Conceptions of Normative Power: Description (NPE) or Strategy (NPA) Manners describes the normative power approach thus: The contagion diffusion [sic] of norms takes place through the diffusion of ideas between the EU and other global actors. An example of pouvoir normatif in action through contagion can be found in the ways in which ideas and means of regional integration have diffused between continents. Hence ideas such as the creation of a “common high authority,” “four freedoms” and even “single currency” are seen in other regions of the world as being worthy of imitation (Manners 2013, 315, emphasis added).

How “imitation” works, remains however to be elaborated in some more detail, so as to enable empirical research to establish whether or not, and if so to what effect, “contagion diffusion” happens. It appears that among many of the authors who refer—often critically—to Manners’s “normative power” concept, two perceptions dominate: The first refers to “Normative Power Europe” (NPE) as a concept that conceives the EU as appreciatively referred to from abroad, upon which ground it is considered as constitutive for a perception of the EU as a civilian as opposed to a military power (see for example Nicolaïdis and Whitman 2013; as well as Manners 2002). The second is Manners’s own further development of the concept towards the “normative power approach” (NPA), which, in his

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more recent work, stresses the active role of the EU in the process of spreading European normative values and ideas (see also Sjursen 2006). The strategic normative power approach is summarized by an understanding of “others,” such as for example ASEAN, the AU and Mercosur, who behave like copycats. As Manners writes, Contagion diffusion relies on a number of mechanisms of imitation, emulation and mimicry/mimétisme including the persuasive attraction of ideas, as well as the prestige and status associated with regional integration organizations (Manners 2013, 315).

While NPA therefore does rely on a range of “mechanisms” facilitating the actual incorporation of normative ideas elsewhere, its power results from a vector that is directed away from Europe. Its value-added is thus mainly defined as a means towards the end of strategic power, keeping with E. H. Carr’s concept of power over opinion as “power-over” others (Carr 1939). In turn, the concept of blueprinting sheds light on the EUropean normative order as having empowering potential. Similarly to the strategic normative power approach, Alter holds that European institutions are “emulated” or “transplanted” legal institutional settings from the EU to other non-European social contexts, which is demonstrated by accounting for “copies” of the European Court of Justice (ECJ) around the globe (Alter et al. 2012). The main rationale underlying this kind of copying is the attraction of the possibility of the coexistence of supranational institutions and domestic institutions that is demonstrated by the EU’s example. 6 As research about “the consequences of copying a European supranational judicial institution” (Alter et al. 2012, 632) reveals, the notion of coexisting institutions—rather than the meanings attached to them—does not reveal the related change of normative meanings attached to these institutions when transferred to a different social environment. For this meaning is expected to be enmeshed with local cultural repertoires and therefore it is expected to change as institutions become established and used by other actors elsewhere. This is confirmed by two findings: “that copying the ECJ is selective rather than wholesale, which suggests that adapting a court to local legal and political contexts may be necessary for successful transplantation,” and “that importing a supranational judicial institution does not necessarily copy the institution’s politics” (Alter et al. 2012, 633). The normative change of meaning-in-use that is triggered by copying institutions remains to be examined, for “the success of a transplant will depend on its ability to graft onto existing legal norms and practices” (Alter et al. 2012, 634). Even though conscious of and careful with distinguishing the process from colonialist strategies, the approach ultimately advances an interest in transplanting judicial institutions. Its focus on the “effectiveness of the imported legal order” (Alter et al. 2012, 635) puts its utilitarian motive on a par with Manners’s normative power approach. 7

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To summarize, normative order has been studied predominantly with a focus on changing institutional and/or constitutional settings inside the European Union, 8 on the one hand, or alternatively, change initiated by the EU vis-à-vis others, so as to make others comply with the EU’s normative settings. The latter is well demonstrated by enlargement literature’s focus on accession candidates as well as normative foreign policy literature. Both have laid the grounds for the norm diffusion approach and the normative order approach, respectively. In turn, the proposed reflexive perspective on interactive contestations about norms and their impact on the global normative order approaches norm transfer from a different perspective: following the basic sociology of knowledge assumption that norms are socially constructed, on the one hand, and the normative theoretical claim that in principle, norms must always be contestable by their addressees, on the other, the reflexive constructivist literature questioned the normative potential of norm diffusion. Based on studies of “contested compliance,” for example, with regard to the EU’s eastern enlargement process (Lerch and Schwellnus 2006; Brosig 2012) it linked the way normative meaning-in-use was reenacted in this process with changes of the global normative order (Wiener 2004; Puetter and Wiener 2009). 4. BLUEPRINTING Transplanting and blueprinting share an interest in developing a more concise understanding of how transferring (soft) institutional parts of normative from one polity to another functions. Quite like transplanting, blueprinting begins from noting a reference to the EU’s institutional as well as constitutional settings. However, different from the functional or utilitarian approaches of transplanting or diffusing norms, blueprinting involves a multiplicity of different actor constellations and therefore equally multidirectional power vectors. Rather than diffusing ideas— however useful they may seem to the receiver—blueprinting is conceptualized as an interactive practice. It implies that the normative meaning generated through it depends on the context in which the normative meaning-in-use is enacted. The result is to be “read off’ at the receiving end. That is, by reversing direction, rather than assuming the EU has an interest in diffusing its legal order to others, it focuses on the interest in turning towards the EU for inspiration revealed in the utterances of others. Research on blueprinting is distinct because it is interested, first, in identifying the motivation of others to turn toward Europe, and second, in understanding how social practices that reenact “normative structures of meaning-in-use” (Milliken 1999, 132, Wiener 2009) change the latter through adaptation. Because normative structures of meaning are both

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used in the process (i.e., applied, copied, implemented or transferred) and changed (i.e., bestowed with meaning derived from experience and expectation). The resulting normative structures of the respective normative orders elsewhere therefore reflect the interaction between the diverse repertoire of cultural experiences in the root contexts in which erstwhile EU norms are embedded, on the one hand, and that of the external context to which they have been incorporated, on the other. Both contexts consist of complex normative structures of meaning-in-use that derive their meanings through a web of binary oppositions that are brought to bear through the practice of enacting within their respective contexts and across these contexts. 9 The interactive process of norm transfer is an essential component of the social construction of constitutional quality, which stands to be more explicitly addressed by both the normative power approach and the norm diffusion approach. Until this point, both approaches build on an outgoing direction of strategic norm diffusion. The reflexive approach to global constitutionalism turns that logic on its head by attributing an active part of the “interaction” to those looking into the EU’s normative order from the outside. Accordingly, the outcome, that is, the normative structure of meaning-in-use, would have to be read off the practice at the other end outside Europe. It follows that while the interest in “imitating” aspects of the European normative order does confirm the appeal of that order to others, the practice of blueprinting reveals its empowering effect. To assess the latter, more detailed empirical research is required; it cannot be predicted based on normative theory. To conduct this research, it is helpful to distinguish two types of interactions as part of the practice of blueprinting. The first type includes a range of other regional organizations, such as, for example, Mercosur, the African Union, the BRICS, ASEAN or NAFTA, that seek to establish organizational settings, which are similar to the EU. These regional actors compare their institutional settings to the European Union’s institutions and then decide to copy the EU’s formal institutions, such as, for example, political bodies—the parliament, the council, the commission or the courts. The second type refers to international organizations such as the World Trade Organization (WTO), the United Nations (UN) or NATO that have adopted some of the core constitutional principles and norms which are central to the EU’s constitutional setting or vice versa. This perspective has generated research by scholars who compared the role courts play in the EU with other regional bodies (Alter 2009; Loughlin and Walker 2007; Isiksel 2010; De Búrca and Weiler 2012) or how the neo-Kantian regulatory ideal could be made to work in other organizational contexts (Habermas 2011; Eriksen and Fossum 2006; Fossum and Menéndez 2011).

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Figure 6.1. The Embedded Acquis Communautaire Source: Wiener, Antje. 1998. The Embedded Acquis Communautaire, European Law Journal 4/3 (1998): 302.

BLUEPRINTING “ON THE GROUND”: SELECTED CASES This second step of this chapter’s argument consists of presenting the different types of blueprinting which have been distinguished above and which differ according to the purpose of blueprinting as either adding an institutional detail to an existing regional organization or incorporating a constitutional norm or principle into a constitutional project. A selection of empirical studies of regional organizations stand to address the research objective of blueprinting and the two questions of first, what was the motivation to turn to the European Union’s normative order, and second, how did the transfer of parts of that order play out with regard to the local structures of normative meaning-in-use? Given the proposed

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research project’s interest in blueprinting constitutional settings and the emerging and/or changing constitutional quality for non-European contexts, in particular, processes of constitution building in postrevolutionary settings, the focus will be on constitutional norms. The assumption is that the attraction of the EU’s constitutional setting stems from its unbound constitutionalism, that is, the development of constitutional quality that is not state-bound. The following exploratory choice of examples highlights the range of different locations from which an interest in the EU’s normative order has been voiced with reference to regional organizations outside the EU. Given the programmatic interest in discussing the EU’s unbound constitutionalism as a process of social construction, and the limited scope of this contribution, the following focuses on regional organizations only. Regional Organizations: Towards Community Formation While there are plenty of other regional organizations, the following represent recent examples of reference to the EUropean normative order, just prior to, during and despite the situation of “crisis” in the EU. 10 In all selected cases, a move towards creating a community rather than a mere treaty organization or conference is notable. The ASEAN Economic Community (AEC) is to be founded in 2015. It builds on the ten former ASEAN member states in order to develop an economic community based on the principle of free movement, which represents the founding principle of the European Economic Community (EEC) as the precursor of the EU. Yet, while the prospect of a common market based on the principle of the free movement of workers, goods and capital is the principal first step, Najib Razak, the Malaysian prime minister, already envisions democracy and peace to follow. As he notes Common markets require common rules and independent decisionmaking bodies, which contribute to the improvement of governance. Similarly to the European project’s support for smaller member states’ development towards mature democracies, the AEC will be able to strengthen institutions and support good governance in our region. 11

At the time of the EU’s struggle with countering the financial crisis, the envisioned progressive integration from economic to political union and the promise of democracy and peace must be taken with a grain of salt: for while the perception of the sequence of integrative steps persists, the threat of the problems currently experienced in EUrope invites careful reassessment. In that sense, the prospective AEC will be able to benefit from the EUropean experience, making careful choices of which integrative steps to copy and how. This is where the concept of blueprinting allows for a reflexive approach to norm transfer.

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The new Asian institution builds on its forerunner ASEAN—and “blueprints’ from them to begin with. As the AEC website states, “The ASEAN Leaders adopted the ASEAN Economic Blueprint at the 13th ASEAN Summit on 20 November 2007 in Singapore to serve as a coherent master plan guiding the establishment of the ASEAN Economic Community 2015.” 12 Yet, the decision in favour of further integration, which led to the founding of AEC, does build on the European experience and the promise of growth, wealth and democracy that it transports. As Razak notes these may be familiar waters, but ASEAN will chart its own course. Properly designed, the AEC can build on the successes of the European project, whilst learning from its failings. My hope is that over the coming decades the people of South East Asia enjoy the democracy, prosperity and peace that greater economic co-operation can bring.

In 1992, the Southern African Development Community (SADC) was founded through the transformation of the Southern African Development Co-ordination Conference (SADCC) as its forerunner. 13 According to Schöman, regional organization in South Africa was politically motivated (Schöman, no year). 14 “The SADCC or the conference, was formed with four principal objectives, namely: (1) to reduce Member States dependence, particularly, but not only, on apartheid South Africa; (2) to implement programmes and projects with national and regional impact; (3) to mobilise Member States’ resources, in the quest for collective selfreliance; and (4) to secure international understanding and support” (ibid.). SADC and its member States are expected to act according to the following principles: • • • • •

sovereign equality of all member states; solidarity, peace and security; human rights, democracy and the rule of law; equity, balance and mutual benefit; and peaceful settlement of disputes.

Notably, a number of “unbound” constitutional practices of the EU such as the institution of “summit” meetings (Peterson 2001), as well as the introduction of the practice of sharing governance responsibility based on a “troika” (that is, applying a model that builds on collective experience), demonstrate a notable similarity with EU experience. Thus, the principal institutions of SADC include a summit—“made up of Heads of State and/or Government, the Summit is the ultimate policy-making institution of SADC,” 15 and the “troika—the extra-ordinary Summit decided to formalise the practice of a Troika system consisting of the chair, incoming chair and the outgoing chair of SADC.” 16 The more recent literature on European and global constitutionalism sustains this link between contested fundamental norms, a changing Eu-

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ropean constitutional “architecture” and change of the global normative order based on the interplay between European courts, the UN Security Council and individual litigants (see Isiksel 2010). While still an emerging academic field with no real policy area to relate to, global constitutionalism literature has been rapidly growing. In the process, it has generated a multiplicity of approaches, which can be roughly summarized as three— normative, functionalist and pluralist—schools (for overviews, see De Búrca and Weiler 2012, Krisch 2010, Armington and Peters 2009, Schwöbel 2011, Wiener 2012a). Much of this literature has emerged from the background of the constitutionalization of international organizations, especially the World Trade Organization (WTO), as well as the increasing involvement of regional and specialized courts in transnational litigation (De Búrca 2009). The transfer of constitutional practices, rules and principles has been dubbed “global constitutionalization.” However, unlike the more recent international organizational centre of global constitutionalization, a different perspective on constitutionalization within the global realm has come to the fore through political revolutions and social protest. Thus, we observe social movements and a range of political interest groups to establish constitutional ground rules in postrevolutionary contexts around the globe. The latter groups struggle with identifying appropriate constitutional ground rules that would allow for sustainable democratic practices. While these contexts are invariably reflecting the changing normative global order, the struggle of these groups has yet to find recognition in the emerging field of global constitutionalism. CONCLUSION: REFLEXIVE GLOBAL CONSTITUTIONALISM So, what should global constitutionalism offer as a theoretical framework and policy guidance, if the observation that “global constitutionalism is the answer” were to hold? To address this question, this chapter proposes taking a practice-oriented perspective, which considers the social construction of constitutional quality as central. This approach is positioned in critical reflection of Europe-focused policies of norm diffusion (Schimmelfennig and Sedelmeier 2005), normative contagion (Manners 2002, 2006; Sjursen 2007) or proposals of uploading European federalism to the global “level” (Habermas 2011, Cohen 2012). While keeping with the leading constitutional principles of democracy, human rights and the rule of law that are inscribed in the global normative order through countless treaties, conventions and constitutions around the globe, the project seeks to engage the context of emergence, in which normative structures of meaning-in-use are reenacted by diverse actors, as its starting point. From this practice-based empirical focus, it seeks to establish the meanings that are attached to the leading fundamental norms and that differ according to the context in which they are generated as the

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“cultural repertoires” generated in different and distinct ways by each social group. In doing so, reflexive global constitutionalism works with two indicators of constitutional quality: first, the pouvoir constituant as the social group to which a constitutional script belongs and by which the norms, rules, regulations or principles manifested by it are recognized; and second, the shared normative roots (the cultural repertoire) that exist prior to this script and which establish its crucial external authority. While global constitutionalization literature focuses predominantly on international organizations and, therefore, on the question of whether and when a social norm is legal, the proposed project asks whether and when we can speak of a constitutional norm. This sheds light on the legitimating reference to constituent power. RENEGOTIATING AND REENACTING NORMATIVE ORDER What does EUropean constitutional quality offer despite the ongoing and lingering crisis talk? This chapter argued that as a socially constructed normative order, the EU’s constitutional quality is quite robust, and more importantly, as a normative order that is unbound from the state, it offers a valuable reference frame for today’s most pressing questions about political reorientation in postconflict and/or postrevolutionary contexts. The challenge of regional integration worldwide and the leading question of what might be socially recognized and culturally validated “ground rules” that could function as a common reference for political parties that stand to be integrated in postrevolutionary (or postcrisis) contexts, lies in agreeing on basic rules of procedure. This agreement should not be underestimated, for it must live up to functional conditions such as being practical and readily understandable to the diverse set of parties involved. The lead question is therefore: What are common meso level principles that set the ground rules for political cooperation? Regional integration takes place for purposes that lead beyond the logic of cooperation in international regimes (international relations theories) as well as that of constitutionalization in the context of national states (comparative government/constitutional theory). It therefore requires new institutional and constitutional settings. While the formal setting may be exported, the way norms “travel” can never be predicted (see Wiener 2008). Subsequently, constitutional quality will always depend on what the respective constituent power makes of it. That is, the interaction with the institutional and constitutional settings, even if these are blueprinted from elsewhere, will depend on the way they are enacted. In the process of this interaction, the normative structure of meaning-in-use will be reconstructed. The more interaction between regions as well as between the

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NOTES 1. This chapter has benefited from discussions within the framework of the Constitutionalism Unbound project at the University of Hamburg (http://www.wiso.unihamburg.de/professuren/global-governance/forschung/fertiggestellte-projekte/ constitutionalism-unbound/, accessed 4 April 2014), and especially conversations with Ezzedine Choukri-Fishere following his lecture on “The Arab Spring—Egypt’s New

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Majority” on 19 June 2013 (http://www.wiso.uni-hamburg.de/professuren/globalgovernance/forschung/global-constitutionalism/single-view/meldung/bericht-zu-echoukri-fisheres-vortrag-arab-spring-egypts-new-majority/?no_cache=1, accessed 4 April 2014). Earlier versions of the chapter have been presented. I thank the participants for their comments. For research assistance at the University of Hamburg, I am thankful to Anke Obendiek. The chapter is exclusively the responsibility of the author. 2. We use the term “unbound constitutionalization” to indicate processes of constitutionalization that are not state-bound (Wiener et al. 2012a). 3. The German weekly DIE ZEIT used the heading “Military Coup” while reporting on what the Egyptians call their “second revolution” in its online version on 4 July 2013, http://www.zeit.de/politik/ausland/2013-07/aegypten-militaer-putsch (accessed 4 April 2014). 4. Consider manifold comments, including former diplomat, political science professor and novelist Ezzedine Choukri-Fishere’s comments in the Financial Times, 5 July 2013 and 20 July 2013; see also DIE ZEIT 36, 13, 29 August 2013. 5. The collaborative research project Constitutionalism Unbound: Developing Triangulation for International Relations was funded by the Science Foundation of the Hamburg Senate and conducted in collaboration with researchers at various German universities from 2011 to 2013. 6. As Alter notes, “Europe also showed the world that robust international legal oversight can co-exist with important national values such as democracy, dealing with security threats, and respecting heterogeneous national values.” 7. This is particularly emphasized when noting that “The legal transplants literature thus hones in on a key challenge that derailed Haas’ neofunctionalist theory: how to create local demand for transplanted institutions and laws” (Alter et al. 2012, 639). 8. See citizenship and constitutionalism literatures on integration respectively, Weiler 1999; Shaw 1999; Bellamy and Castiglione 2003; Weiler and Wind 2003; Bellamy 2007. 9. For work on cross-referencing, cross-fertilization and “translation” in the process of international law, see for example Slaughter 2003; Walker 2003; as well as Wiener et al. 2012b. 10. Among them, the Mercosur, founded in 1994 by four countries (Uruguay, Argentina, Brazil and Paraguay) by the Treaty of Asuncion—the main goal of this union was to enhance economic progress and to improve social justice (see Tratado 1994, 1)—as well as the Andean Tribunal of Justice founded in 1984. Its design was “explicitly” modelled “on the ECJ” (Alter et al. 2012, 631). 11. See “Europe as an Example for Asia”. DIE ZEIT, 5 November 2012, 258. 12. See the AEC’s website: http://www.asean.org/communities/asean-economiccommunity (accessed 4 April 2014). 13. The SADCC was established in April 1980 by governments of the nine southern African countries of Angola, Botswana, Lesotho, Malawi, Mozambique, Swaziland, Tanzania, Zambia and Zimbabwe. 14. See http://www.alternative-regionalisms.org/wp-content/uploads/2009/07/ schoemar_fromsadcctosadc.pdf (accessed 4 April 2014). 15. The summit is responsible for the overall policy direction and control of functions of the Community. It usually meets once a year around August/September in a member state, at which meeting a new chairperson and deputy are elected. Under the new structure, it is recommended that summit meets twice a year. The current chairperson of SADC is President Sam Nujoma of Namibia and the deputy chairperson is President Bakili Muluzi of Malawi. More functions of the summit are enumerated under article 10 of the SADC Treaty. 16. This system was established in August 1999. It states that “other member States may be co-opted into the Troika as and when necessary. This system has enabled the Organisation to execute tasks and implement decisions expeditiously as well as provide policy direction to SADC Institutions in between regular SADC meetings. The

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Troika system will operate at the level of the Summit, the Organ on Politics, Defence and Security, Council and Standing Committee of Senior Officials” (article 10 of the SADC Treaty).

SEVEN Europe’s Nemesis? European Integration and Contradictions of Capitalism and Democracy Gerard Delanty

What does it mean to speak of a crisis of Europe? How should the crisis be conceptualized? What might a sociological account offer? That there is a crisis is now widely recognized, but the nature and scope of the crisis is far from clear. This uncertainty is also apparent in the terms used: ‘crisis of the Eurozone’, ‘crisis of Europe’, ‘crisis of the EU’, ‘crisis of capitalism’. In this chapter I offer a number of sociological perspectives on this relatively new discourse of crisis and attempt to sketch the possible implications of the crisis for democracy with a particular view to the implications for European integration. Classical sociology was deeply concerned with questions concerning the relationship between economy and society. This was central to the works of Marx, Durkheim, Weber and many others writing in the tradition of political economy and social theory, such as Werner Sombart and Karl Polayni, who were interested in major social and economic transformations. Contemporary sociology and social theory since the cultural turn has on the whole pulled away from macrosociological analysis and—perhaps due to the extraordinary influence of Foucault—generally lacks a perspective on capitalism. Paradoxically, while classical sociology was not particularly interested in democracy, contemporary social theory has been increasingly interested in democratization. A challenge for the present day is to understand the relationship between capitalism and democracy. This is particularly relevant to the 135

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question about Europe and the future, if it has one, of European integration. A feature of the current situation, which is not specific to Europe, is the changed relationship between capitalism and democracy. I argue that to speak of a crisis in Europe today we need to look not only at the financial and economic situation, but the wider societal context and in particular the prospect that the crisis signals a new relationship between capitalism and democracy. In this sense it is more than a crisis, but marks a point of societal transformation, the shape of which is at present unclear. What we are witnessing today is possibly a reconfiguration of the societal pact that emerged in the twentieth century and consolidated in the post-1945 era, which also saw the emergence of the project of European integration and the consolidation of a particular model of European social capitalism that was broadly acceptable to the centre right and centre left (Offe 2003, Streeck 2011). The crisis is not a uniquely European phenomenon, but it is more acutely felt in Europe because the crisis has penetrated beyond the financial and economic sphere to the wider societal context to an extent that the viability of several states is in question and has, additionally, become embroiled in the fate of the EU. Democracy has been undermined by capitalism, which is now faced with a democratic challenge. The question can thus be posed as to whether that challenge will result in a new relation between economy and society or whether democracy may undermine itself or prove ineffective against global capitalism. In essence, my argument is that due to a relatively advanced degree of democratization in Europe, whose societies are amongst the most prosperous in the world, the level of social discontent has now crystallized in numerous forms—both to the right and to the left—provoking a democratic challenge to the state and to the EU opening up different future scenarios. It is thus possible to speak of a return to the ‘legitimation crisis’ of the 1970s, to cite Habermas’s analysis in 1973 (Habermas 1976). However the current legitimation crisis is different in two major respects: it has a global dimension that was absent in the crises of the previous century in that the capacity of the state to exercise democratically based authority over capitalism is much weakened due to the structural transformation of the latter by globalization; secondly, there are now increased demands for legitimation that were not present in the ‘class compromise’ politics of the 1970s. As neoliberalism is transformed into a globally networked kind of capitalism, the state loses its grip on the economy, and as it does so the political returns with a vengeance and with unpredictable results—which I term the recalcitrance of the political. It may also be the case that the self-critique of capitalism, the alleged ‘new spirit of capitalism’ (Boltanski and Chiapello 2006), is now becoming hostile to capitalism. In many ways what we are seeing is not necessarily a crisis of capitalism, or a crisis of the economy, but a crisis of the state,

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which has the signs of becoming a societal crisis. Since capitalism is legitimated via the state, through the medium of law, the demands on the state are greater at times of economic upheaval. It is apparent since 2008 that the state has not succeeded in balancing crisis management with democracy, efficiency with legitimacy, leading to what Crouch (2003) has aptly termed ‘post-democracy’. I stress that what has changed is not only the objective context (the 2008 financial crisis) but also the increased demands for legitimation as well as (probably unsustainable) expectations of wealth creation that developed over the past decades: capitalism may have changed, but so too has democracy. Since democracy has the power to change how the world is perceived, we are all the more in the sociological domain of perceptions and claim making. However, there can be no doubt that there has been a tremendous systemic crisis of capitalism, with the consequence of a general decline in growth in the postindustrial economies of Europe. It is of course a further question whether the democratic imagination has the means to bring into existence an alternative normative order. The implications for the future are unclear, but two dynamics are striking. First, there are the direct consequences of the economic crisis on the state; second, there are the less direct, but nonetheless important consequences of political demands deriving from civil society for greater democratization of the state. In both cases the state—the national state and the EU—is the site on which the crisis plays out. If this view is correct it means that the economic crisis needs to be analysed as a societal crisis involving major adjustments in state and economy and in the relationship between capitalism and democracy: it cannot be seen only as an economic crisis, let alone a financial one. In short, this is as much a struggle about democracy as it is about economic recovery. In this chapter I offer an interpretation that challenges some of the main trends in current debates on the crisis of Europe, which tend to see the crisis as an economic one that can be overcome by political regulation either by the national state or by the EU and other transnational organizations. Sociological accounts—in the classic tradition of political economy associated with Marx, Weber, Polanyi, Schumpeter—would instead see the economy as embedded in society. Capitalism is both an economic system and a particular kind of society. 1 We can speak of the economy as largely capitalist—with all due regard to the existence of ‘varieties of capitalism’ (Hall and Soskice 2001)—but society (at least in Europe) is not entirely capitalist in that capitalism is only one structuring element. Thus we can speak of a ‘capitalist economy’; however we do not live in a ‘capitalist society’, but in a ‘democratic society’. The difference is constituted by democracy, which unlike capitalism is a normative term, and this normativity is what makes the form of society irreducible to capitalism, which is embedded in the wider polity. 2 This tension, which produces disembedding effects between the capitalist economy and democratic society, is today more

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firmly felt, and its resolution will be critical in determining the future shape of Europe. The first section of this chapter critically discusses current interpretations of causes and solutions; the second offers an alternative account along the lines indicated in the foregoing; the third section discusses patterns of change; and the fourth by way of a tentative conclusion offers an alternative proposal of a possible future beyond the crisis. 1. SOME APPROACHES TO THE CRISIS: DIAGNOSES AND PROGNOSES Popular views as well as academic analysis have highlighted at least four causes of the current crisis. These will be very briefly characterized around broad lines of argument. One view is that the current situation is due to a failure in European integration. This can be attributed either to the euro currency or to the regulatory framework of the EU, which has limited fiscal powers and a rigid monetary policy that requires budget deficits not to exceed 3 per cent of GDP and inflation to be below 2 per cent (Aglietta 2012). Thus countries within the Eurozone do not have a capacity to control interest rates or devalue their currency or print money, fiscal and monetary mechanisms that are normally used by governments to manage economic downturns and to stimulate growth. Without fiscal union to back it up, monetary union has exacerbated the boom and bust cycle for many countries (De Grauwe 2013). The only power that the Eurozone states have is to raise taxes to finance debt, but this is limited due to the need to preempt capital flight (Offe 2013). While there can be no doubt that the monetary union was flawed in its design, it is difficult to attribute every problem to it. However, it can be conceded—and not only with hindsight—that the design of European integration was illequipped to deal with economic decline and even less equipped to deal with the overaccumulation of financial capital. The project of European integration was very much a child of the decades of post–World War II economic recovery, and its architects were blind to endemic economic problems. This was due in no small measure to the dominance of faith in the capacity of the power of the state to steer economy and society. Three decades of neoliberalism have taken their toll on belief in the state, but one should not conclude that the state has been defeated. A second and related view expressed in the European media is that the crisis is due to German dominance of the EU. There is clearly some basis for this view in that Germany is the largest European economy, one of the largest in the world, and while many countries are getting poorer Germany is getting richer. The rigid conditions attached to the euro are of German design and reflect German interests. However, while the crisis has benefited Germany, it does not mean that it was of German design.

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The euro currency was not a product of German interest, but of French aspirations (Beck 2013). Yet German reluctance to address the underlying structural problems in the Eurozone is a major factor in the current impasse (Mahnkopf 2011). A third view, which would appear to inform a good deal of public policy making, is that poor national regimes of regulation rather than capitalism itself are to blame for the crisis. This view, for which there is also some basis, attributes blame for overspending and an absence of regulation on national banks, and in some cases endemic corruption, certainly the case in Spain, Greece, Italy and Ireland (though one would have to add Belgium to the list of malfunctioning states). It follows then that those countries have to pay the price for their recklessness. This position does not adequately address the interlinked nature of the supply of credit in Europe: for every debtor there is a creditor, and many of the latter are located in different countries. German and French banks were willing providers of credit to investors in Spain and Greece. Behind the official face of ‘Rheinish capitalism’ was considerable neoliberal capitalism, in particular in the banking sector. A fourth perspective is that the crisis is caused by a globalized neoliberalism, beginning in 2007 in the United States with the implosion of the subprime housing market and consequent collapse of the Lehman Brothers bank in September 2008, provoking a contagion that spread to banks in Europe by 2009. In this view it is a global financial crisis of neoliberal design that came from outside Europe, but had a detrimental effect on Europe, which is unable to control the forces unleashed on it. This neglects the fact that while it has global ramifications, it is a largely Western crisis, affecting the United States and the EU, and has not had a significant impact on the Southern Hemisphere and Asia, where arguably the major industrial powers are now based. The subprime crisis in the US simply precipitated a crisis that was going to happen independently in Europe, where there was also an unsustainable credit boom. Moreover, attributing too much to global forces also underscores the ability of the EU and its member states to exert control over their economies. This perspective also exaggerates the global extent of neoliberalism, which is not a monolithic global project (Comaroff 2011). On the basis of these views on the origins of the crisis, commentators have argued for various solutions or prophesized possible outcomes. These include the following positions. First, TINA (‘There Is No Alternative’). This is the position that austerity is the order of the day and some have to put up with more of it than others. Austerity politics has been imposed on several countries by external means (in the case of Greece and Iceland, but also most of southern Europe) or through internal resolve in the case of Ireland and the UK or in the case of Spain and Portugal to preempt the worst. Despite such measures, it is unlikely that a new age of austerity politics will increase in

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scale or become a new hegemonic order imposed by neoliberal governments responding to the pressures of global dictates. Resistance is strong and voters are volatile; there is much variation in the measures adopted, not all of which can be termed neoliberal, for many are neo-Keynesian; and there is a major disparity between the northern and the southern countries. The welfare state where it is strongly rooted is far from in decline, however much it has been transformed (Pierson 2007, Svalifors and Taylor-Goody 2007). Second, opposed to TINA are neo-Marxist arguments that assert that the problem lies with capitalism, in particular finance capitalism and neoliberalism. This is reflected in widespread popular movements, of which the Occupy movement is the most well-known, targeting largely banks. The prognosis of a popular movement against capitalism received a new impetus following the Arab Spring (Castells 2012). The impetus for change is very unlikely to come from the extreme left, which lacks popular support and does not have a capacity to bring about institutional change. It does however have a capacity to raise voices and to politicize the political field. The return of the term ‘capitalism’ is itself an indication of an epistemic shift in the political imaginary of the present. However, it is unlikely capitalism is simply going to disappear, since this is the primary form of the modern market economy and there are only variations of it. The question is rather what conditions should be imposed on it. A third argument is that the crisis will lead to the breakup of the EU, or in a reduced form, a breakup of the euro currency. The domino effect is often cited as the causal factor, with a major default on sovereign debt as the trigger. The apocalyptical scenario of a reoccurrence in Europe of the 1929 Wall Street crash is often invoked in more pessimistic moments. Angela Merkel has invoked the spectre of the Inca empire as a warning that the EU might simply vanish one day. The breakup picture is one of a return to a Europe of nations, with each nation opting for what works best for itself. A detailed analysis of this is not possible in the space available, but a brief comment is in order. While the breakup of the Eurozone is not impossible, it is probably not likely to occur. The event of Greece or a number of other countries leaving is unlikely to provoke the end of the euro. Unless the euro collapses, the EU will hardly disintegrate (Schmitter 2012). While the economic crisis is often declared to be the greatest challenge for Europe since 1945, economic meltdown does not seem a likely prospect. A more probable outcome will be that some countries, such as the UK, will renegotiate their membership, leading to a twoor multispeed Europe. But for all practical purposes the illusion of an integrative model of Europe will come to an end. It is in this sense that one can speak of Europe now at the brink of nemesis. Finally, there is the neo-Keynesian position with a call for greater regulation. Essentially this is a demand for a stronger EU and a more regulated neoliberalism. This can vary from the neo-Keynesian position

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of greater regulatory powers given to the EU, the creation of eurobonds, a European banking system, and so on, to—in effect a different position— stronger calls for a deeper and more federalized EU (e.g., Habermas 2009, 2012). A major transformation of the EU would come at the cost of a loss of national democratic control, so this is probably not the moment for such a change to occur. The demand for greater regulation and growth as opposed to austerity—as articulated, for instance, by Joseph Stigliz (2012)—is rather more compelling. However, it is unlikely to be sufficient for anything more than the medium-term restoration of stability, which— along with short-term austerity measures—may be sufficient for abating the crisis, but will probably do little to reverse the damage that has occurred or halt the rising tide of public discontent. It has only a limited capacity to meet demands for greater democratization (in terms of accountability, representation, inclusion). Yet, as argued by Crouch (2004), imposing restraints on neoliberalism, which is far from dead and likely to live on in new forms, is an essential step forward. The elements of the crisis are undoubtedly contained in these responses, but I argue we need to go further to see state and economy linked in deeper and more pervasive ways. This allows us to see that neither the revival of neo-Keynesian fiscal policy on an EU level, nor containing neoliberalism nor simply strengthening EU-level regulation within the existing austerity parameters, will solve a problem that has its origins in uneven capitalist accumulation and a disjuncture of economy and state. This is not to deny that national governments can produce effective short-term solutions. However, partly because they came too late and were perceived to be inadequate, but also because of the recalcitrance of the political, new demands have been made, increasing the stakes of democratic legitimacy. The uncoordinated, ad hoc and inadequate responses by national and intergovernmental organizations have everywhere initiated public fury over incompetence and the misuse of public revenues, giving to the public a capacity to reframe the initial problems into a wider politicization of political discourse. Capitalism no longer has an ideology available to justify itself: neoliberalism may be present in policies aimed at deregulation, but it no longer commands a dominant ideological position. 2. RETHINKING THE CRISIS IN EUROPE The origins of the crisis lie in the expansion and transformation of neoliberalism into a globally networked capitalism in the 1990s (Calhoun and Derluguian 2011). With its roots in the transition from post-fordism into neoliberalism since the late 1970s, capitalism today is a global system in which production, markets and finance are disaggregated (Deutschmann 2011, Streeck 2011). The nation-state is no longer the container of these

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components of capitalism, which is not an integrated whole. Since the Single European Act in 1986, but more decisively since the Maastricht Treaty in 1992, the neoliberal agenda crept into the project of European integration, with market deregulation and financial liberalization gaining increased support on a transnational European level (Stockhammer 2012). The four mobilities—the free movement of capital, goods, services and labour—that were the driving force of European integration lent themselves to a wider project of neoliberalism organized on a transnational scale. The introduction of the single currency was part of this process that led to an interconnected capitalist economy in Europe. But we can now see the interconnected economy to be a fragmented one in that it led to different modes of capitalist accumulation, with the core economies in the north, with Germany at the forefront, and southern Mediterranean Europe on different trajectories. This split and different directions of travel have now unexpectedly proven to be a greater strain than the integration of central and eastern Europe in the various enlargements of the EU—once thought to risk the future of the EU—and puts in an entirely new perspective the enlargement of the EU to include the reintegration of the dysfunctional southern European countries. The example of Poland illustrates very well this reversal in destinies: the Polish economy has not suffered from the problems that have beset Italy, Spain, Portugal, Greece and Ireland and has so far not suffered a recession. 3 The project of European integration has been in its economic aims focused largely on market integration, but the nature of the capitalist economy is that it is also based on production and on finance (which makes possible production through the supply of credit, without which the necessary investment and liquidity is impossible). Production, market and finance are the three pillars of capitalism. On the production side, there are major differences between the economies of Europe in terms of industrial and postindustrial modes of production, as well as the remnants of preindustrial artisan-based economies in the south. Since the global credit boom, which most countries in western Europe participated in and benefited from, the structural imbalances were not critical and most countries experienced economic growth, the Celtic Tiger economy of Ireland being a dramatic example of boom and bust economics. The financial integration of Europe—through the liberalization of capital—at first seemed to complement wider market integration. However, the different logics of production, market and finance proved critical once the global financial crisis impacted on European countries from 2009. In this period, from the early 1980s to the present, in most countries— except Germany, France, the Netherlands, and Sweden—there was little innovation in the system of production on which a future could be built. The easy supply of credit fuelled relative wealth creation and growth, but once it evaporated, the result was that structural imbalances became the sources of major points of crisis. The microelectronics industry and com-

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munication technologies—the major sources of technological innovation—were insufficient to provide a foundation to sustain the increased expenditure to which postindustrial European states had become irreversibly committed. The result was a descent into public debt and a shift from the provider state to the borrowing state, which now becomes also a regulatory state. Due to the structural geopolitical imbalances in Europe, this entails new dynamics between creditor states and debtor states. It may also be the case, as Deutschmann (2011) argues, that there is a longterm shift occurring in the economy from a situation in which traditional entrepreneurial investors who were the basis of the financial sector turn to other areas where greater gains can be achieved in an era of declining growth. The scale of the problem of so-called sovereign debt cannot be solved through transnational redistribution—aside from its political unfeasibility—since the EU has a limited budget of 2 per cent of GDP, which has been reduced further in 2013. The existing measures, such as the Structural Fund, were not designed for large-scale imbalances. It is also not possible for the northern countries to continue to bail out the dysfunctional countries, without imposing reforms on them, which might be necessary (to eliminate inefficiency and endemic corruption) but is not democratically justifiable. All the indications at the moment are pointing in the direction of a major restructuring of Europe around different economies hopelessly tied to the inflexible euro currency. This means that the dream of a more integrated Europe is now over for a very long time to come: the space has been captured by capitalism, not by democracy. Democracy may have made some gains within national contexts, but it has been forfeited on a European level, which has seen the increased prominence of new sources of decision making, such as the European Central Bank, which is not answerable to democratic bodies, and other instruments, such as the European Stability Mechanism. The crisis in Europe is not only economic, but also political and social, though the full scale of the social crisis has yet to be seen. This can be characterized as a crisis in the model of democratic capitalism that has been the basis of European integration since its inception (Streeck 2011). Capitalism and democracy are once again becoming uncoupled. The relation between capitalism and democracy has never been a natural one, and there have been frequent moments of tension (Iversen 2008; Wagner 2011; 2012). Capitalism produces inequality; democracy seeks to provide egalitarianism. Both are therefore prone to conflict, but can be reconciled, as T. H. Marshall argued in his theory of social citizenship in 1949 and in a different way as shown by Hall and Soskice (2001) in the approach known as ‘varieties of capitalism’. However, any such reconciliation will be fragile and volatile, depending on changes on either side of the equation.

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Capitalism in Europe slowly accommodated itself to democracy, following demands for inclusion and the removal of injustice. In the post1945 period this led to a more social kind of capitalism in Europe than had previously been the case. In Germany it has been referred to as the social market economy, Soziale Marktwirtschaft, or Rheinish capitalism, characterized by state coordination of the market. It was in this, the era of Keynesianism and the New Deal, that the project of European integration was born, and while its goals frequently changed—becoming more political than economic—there was a basic commitment to social values that was shared by the centre right and left. The social aims—let alone democratization—of European integration were of course marginal to its wider objectives of market integration and the related aim of creating a lasting peace between Germany and France. Since this was a time of relative economic growth, capitalism was not under threat from the modest demands made in the name of democracy, including egalitarianism and representation. It was also a period before the consolidation of more cultural politics, from feminism, multiculturalism, environmentalism, when the demands for democracy could easily be accommodated though the politics of ‘class compromise’ by social democracy within the framework of the neocorporatist and welfare state. However, from the 1970s this changed, along with its social and economic foundations in industrial society, and the comfortable illusion of an era of democratic capitalism slowly came to an end with increased structural strain on the state’s resources (Offe 1984, O’Connor 1973). The legitimation crisis of the 1970s was not overcome, but postponed. The recent wave of protest movements can be seen as the continuation of the earlier phase of anticapitalist protest under the changed circumstances of the present. In part democratic capitalism, the basis of the post-1945 consensus, survived the 1980s in theory and to a large degree in practice due to crisis management, Foucaultian-style governmentalism, and the arrival of seemingly unlimited credit in the 1990s was the lifeline that allowed the adjustment to neoliberalism. Much of this represented the supposedly positive face of globalization that came with the Internet and, for those who believed in it, the ‘third way’ was a means to keep alive the spirit of democratic capitalism. Today we are living in the aftermath of this period, which has shed its illusions about the domestication of capitalism and the promises of European integration and globalization. The functional separation of the state and economy has become blurred, as the former loses its abilities. On the one side, there are new demands for democracy, levelled against not only the EU and its democratic deficit, but also against the national state, and, on the other side, capitalism has generated a range of problems that neither the national state nor the EU can resolve. This situation is a reminder, as David Harvey (2010) has argued, that capitalism produces crises, which are not exceptions, but part of the nature of capitalism,

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which is by its very nature unstable and uncertain. This was one of the basic insights of both Marx and Keynes. Financial crises, too, are not unique, as Charles Kindelberger et al. (2011) have argued in their history of economic crises. It may then be the case that today we are simply experiencing the normal condition of crisis-ridden capitalism and that the postwar decades of peace and prosperity were abnormal. Certainly if one took the perspective of the twentieth century or post-1870s—when the modern industrial economy took off—as a whole it would be difficult to draw the conclusion that capitalist accumulation leads to peace and prosperity: the period saw three major wars in Europe (1870, 1914, 1945), numerous colonial wars when the European states fought to retain their overseas colonies, and three major economic crises: 1873, 1929, 2008. Only a myopic introspective European could conclude that all was well with democratic capitalism. The crisis in Europe is due to the logic of capitalist accumulation in the financial markets leading to what Marx termed the falling rate of profitability (see also Mahnkopf 2011, Mavroudeas and Papadatos 2012). Since this occurred in Europe at a time in which market liberalization coincided with enhanced political-legal integration, culminating in the single currency, the result has been a monumental catastrophe for European integration, which was never prepared for the systemic failure of capitalism. Unable to find a solution, it is not an exaggeration to say that the EU has reached a point of nemesis in nationalizing the problems of capitalist overaccumulation as one of sovereign debt to be largely managed through austerity measures on a national basis. The underlying model of accumulation and asymmetrical patterns of growth are not addressed. The current situation is marked by the decoupling of capitalism and democracy and the return of the latter in a repoliticization of questions of the economy to which are now added the very rationale of European integration. One should not conclude that the target of democratic critique is only the EU and capitalism, but also the national state, which is also under duress, since demands for legitimation are directed at all political elites. As national states rely on democratic legitimation to a far greater extent than the EU such demands will have a greater impact on national governments (who also have more means to accommodate such demands). This is reflected in increased coverage in the media of corruption, governmental incompetence and higher levels of voter apathy. Some of the most vociferous critiques have been levelled against the banking elite and in the UK against the media. I refer to this trend as the recalcitrance of the political: once demands for democracy are initiated they have the tendency to expand in scope and to change form very rapidly. This can be seen in the proliferation of both right- and left-wing agitation and the metamorphosis of demands for democracy in one place having repercussions in another place in ways that are often unexpected. The economic crisis, then, has been a political catalyst for a new wave of

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democratic politics, which so far is unorganized and lacking clear focus. The EU has been one target, though not the cause of the crisis (but also not seen to be part of the solution). Its primary legitimacy, as is well documented, derives from its efficiency: so long as it delivers the goods, it is favourably viewed, but once it fails to do so, people withdraw at least active support (Scharpf 1999). However, due to the escalation in demands for democracy, the EU is now being measured by a different standard. In this situation the demands of democracy may undermine the conditions of democracy, since undoubtedly what needs to be done—a major reform of the EU with increased central fiscal powers—cannot be democratically achieved. The very notion of a crisis also needs some clarification. A crisis resides in part in its apperception; it is not only an external object, but constituted by the subject. To speak of a crisis is also to speak of a normative stance and is thus connected to critique, in that a crisis can be revolved in one direction or another depending on how the subject responds to it. A crisis is something that requires the subject to address and to reverse so that it is not engulfed and annihilated by the crisis. The outcome can be anomic or pathological, but it can also be potentially liberating. For this to happen technical solutions are needed, but a will is also required. The crisis in Europe is then more than a question of economic management, but has become the basis of a major discursive shift in the way people think about economy and state. In many ways the discursive shift has been a product of increased demands for democracy that the EU fostered as a result of the so-called democratic deficit: by seeking to fill the gaps it raised the stakes. More democracy brings about demands for democracy and thus generates notions of ‘deficits’ (Trenz and Eder 2004). The EU was built on the back of relatively democratized nation-states which exported their demands for democracy onto the bureaucratic edifice of the EU, which was not created to advance democracy (but also not to hinder it). As expectations increased and as the objective reality also changed, it became increasing apparent that there was another world over which the citizens of the EU had little control, namely globalization. This coincidence of rising expectations and institutional barriers to realizing them—a classic recipe for revolt—both frustrated and increased demands for democratization even more. With the unleashing of austerity packages, democratic demands received a new focus, but with much the same results, namely a sense of not just a moving target but one that has no clear location. Unlike almost every previous example of popular protest, the reference points are opaque. As Marx recognized, this is in part the nature of domination in capitalism, but the form of capitalism today and its global reach have added to the opaqueness of domination. One of the consequences of the rise of neoliberalism has been the weakening of social democracy and the erosion of the social (Birnbaum

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2010, Judt 2010). However, it cannot be concluded that capitalism no longer entirely escapes the sphere of the state, as is illustrated by the numerous bank bailouts afforded by the state. The crisis has escalated into a political crisis because the solutions found have been bereft of democratic legitimacy, thus provoking a democratic challenge to the state. Examples of the failure of the state to act in accordance with democratic norms now include bank bailouts, whereby public revenue is bought out by what are private debts without public ownership ensuing (Berend 2012, Lapavitsas 2012). In the case of Iceland, where a referendum decided that sovereign debt should not be paid, democracy was preserved within Iceland, but at a cost to other countries, which invested in its doomed banks that had meaningless government guarantees. In the case of countries such as Greece, democracy has been suspended by the terms under which bailouts have been set. This has been effectively the case too in countries where austerity measures were self-imposed and the principle adopted that the best that can be done is to avoid the worst. It can also be noted that the current post-2008 crisis occurred at a time of relatively high expectations of citizens not just for democracy, but also for prosperity. We can assume that the earlier expectation of peace has been achieved by the EU. Despite the limits of the democratic accountability of the EU before 2008, the relatively advanced degree of wealth creation—which was by then a real prospect for central and eastern Europe—had made living standards in Europe the highest in the world. The reality was that much of that prosperity, in particular since the mid1990s, was built on the house of cards of private and public debt. The prospect of further democratization of the EU was an undecided matter and one on which the jury was out by the time the era of democratic capitalism passed. The post-2008 period has seen the frustration of the aspirations of the middle class in particular—now facing downward mobility, a drop in living standards and income stagnation—and the increased impoverishment of much of the working class in many countries, with increased homelessness, youth employment and suicide rates. The onset of a crisis must thus be placed in that context of rising expectations and blocked avenues to realizing these expectations. The frustration of those desires coupled with the nascent politicization of the EU and the banking sector provided a recipe for the construction of a discourse of crisis in which efficiency and justice would be key elements. This, then, is as much a crisis of democracy as it is of capitalism: capitalism supplied the preconditions for a momentum that has opened up the democratic ethic in a repoliticization of the economy and state. Capitalist crisis has always been an opportunity for political opportunity and the radicalization of democracy. A decisive question, then, is whether the current crisis is such a moment of change in which a new relationship between state and economy will come about. In the post-1945 period democracy was used for social inclusion based on the welfare state; today the challenge

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for democracy is to gain control over finance capitalism (Engelen et al. 2011, 36). A major question then is whether the democratic challenge will be confined to the national state or whether it will have a positive impact on European integration. The difficulty for an enhancement of democracy on the EU level is in the nature of democracy, which includes four main functions: (a) egalitarianism and social inclusion, (b) citizenship (as civic participation), (c) representation and (d) constitutional guarantees (rights such as protection of minorities). The EU can, to a degree, increase the latter two, but the former two can only be effectively realized on local levels. It would take a tremendous transformation of the EU to bring about (a) and (b), which will paradoxically require what it needs to bring about. The result of this incompleteness of democracy is that capitalism can creep into the nooks and crannies of the transnational edifice of the EU. 3. NEW POLITICAL AND ECONOMIC COUNTERCULTURES It is unlikely that the major economies of Europe will collapse, but the prospect of the end of European integration is a more realistic outlook. However, the assumption can be made that the current economic situation will not be a short one, and it can also be assumed that whatever the outcome will be, it is unlikely there will be a return to the pre-2008 days of credit-financed consumption. The immediate future is likely to see a mix of austerity politics with TINA justifications, the continuation of neoliberalism by other means and calls for greater regulations on an EU level, including neo-Keynesian measures (Crouch 2011). A return to a Europe of nations—within the broad framework of a weakened EU—is not to be excluded, but a more probable outcome will be a reformed but diminished EU. A major transformation of the EU will probably not occur, as this will require further compromises of democracy. There is clearly a contradiction in that what is desirable economically is either not desirable or impossible politically: from the perspective of a durable economic solution a stronger EU with powers of redistribution and possibly of direct taxation as well is desirable from the perspective of many countries, but it is difficult to see how such a centralized EU would be politically possible since it would require a considerable surrendering of sovereignty. Such a development would not be in the interests of the core countries, whose enthusiasm for Europe is waning. A return to a Europe of nations is a rather more likely outcome, since it requires only the removal of EU powers and restrictions. Creating new powers, which would be needed to achieve the former objective, would be much more difficult and require considerable political will. However, a return to a Europe of nations, while being feasible and in the medium term may give the illusion of democracy, will ultimately not solve the

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problems that gave rise to the crisis in the first instance. It is possible that an exit strategy is arguably a realistic scenario for Greece, which is an exception due to more or less total economic and political collapse, but it is not in the interests of Europe as a whole to reverse the quite considerable gains of four decades of European integration. Above all, the longterm solution to economic crisis can only be international cooperation and the cosmopolitan ethic of taking into account the mutual interests of as many groups as possible. This, however, requires a political will, without which any such movement will fall before the democratic critique. To assess the extent to which a major social and political transformation of Europe will emerge out of the present crisis, attention should therefore be given to how social actors are reacting and whether in their actions there is a basis for a political will that might support a new departure. The following developments in part capture the range of current political movements, but also suggest the different directions in which change might occur. There are four main orientations within the populations of Europe. All four are examples of anticapitalist sentiments and reflect considerable disenchantment with mainstream politics. However, for good or for bad, all are part of the shaping of new economic and political countercultures. Right-Wing Populist Movements The rise of right-wing populism in recent years—examples include the Dutch Freedom Party, in Norway the Progress Party, the Danish People’s Party, and the True Finns movement—while not easy to account for in terms of a single cause since it takes highly diverse forms, is defined by three main elements. These parties are anti-immigrant in the first instance. Opposition to migration is a common feature to all right-wing movements, which can be described as culturally authoritarian and in many cases racist. Extreme variants of these trends would include neoNazi movements, such as the Golden Dawn movement in Greece. A second feature of such movements is hostility to the EU, which is regarded as undermining the autonomy of nations. A third characteristic is that they are antielite and antimainstream politics. Anticapitalist tendencies are part of this, though not the primary motivations. While being culturally authoritarian, such movements draw much support from the widespread disenchantment with social issues, and the rise of right-wing parties in many countries is as a result of voters turning their backs on the centre left and centre right parties, which are no longer seen to represent the ordinary person. These movements benefit from the economic crisis in that social discontent that in different circumstances could be directed towards less authoritarian ends goes in their direction (as is clearly illustrated by their success in the smaller northern countries with strong traditions of social democracy).

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Anticapitalist Protest Movements More directly in response to the economic crisis is the relatively recent rise of anticapitalist protest movements, which go back at least to the first World Social Forum in 2001 in Porte Alegre. Such movements are not specifically European, as best illustrated by the Occupy Wall Street movement. In European countries such anticapitalist movements have become increasingly more numerous, as is illustrated by the 15 May Movement in Spain in 2011, with its demands for ‘real democracy’. This movement, which has become known as ‘The Indignants’, has spread to over eight hundred cities in southern Europe and become one of the most significant examples of the assertion of democracy against the current regulation of capitalism (Castells 2012). Antiausterity Protests Closely related to the previous are antiausterity protest movements, which are more issue specific and not always organized movements, and take the form of public demonstrations against so-called austerity cuts in public spending. An example of their multifarious and ephemeral character was the London Riots in 2011, when social protest and looting combined to produce the anomic spectre of a breakdown in social order. The target of antiausterity politics is generally national governments. Not all such protests are ad hoc public ones. In November 2012 there were trade union–organized strikes across several countries, with a European Day of Action and Solidarity organized by the European Trade Union Confederation (ETUC). Alternative Economic Practices Occurring more on the margins of society, but nonetheless significant, are alternative cultures of economic cooperation and solidarity that occur beyond the world of the market. Examples of these include alternative self-help groups, agro-ecological cooperatives which are not driven by profit, exchange markets that do not use currencies, the creation of alternative currencies and ethical banking (Conill et al 2012). These alternative forms of consumption are another response to economic crisis and reflect a change in values with a strong emphasis on being ‘alternative’, defined in terms of being anticapitalism and antimarket (see also Arvidsson 2009). These examples of political and economic responses to the economic crisis illustrate widespread disillusionment with mainstream politics and with the organization of economic life. What they do not offer is a basis on which to build a democratic future. They are a mix of what Castells (1996) has termed ‘resistance identities’, with some examples of a

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countermovement, but not one that has a capacity to bring about change. There is not, in other words, a social movement in the making that might be the basis of social change on a European level. For this to occur a change would need to take place in the nature of solidarity more generally, and these movements would need to embrace wider sectors of the population across a range of European countries. For the present it would appear their impact will be largely on national governments. CONCLUSION Is there anything possible beyond austerity versus growth politics? The analysis in the foregoing does not offer grounds for optimism, especially if the implication is that things will not get better until they get worse. The immediate indications are that the crisis is highly localized in national contexts and has been in part contained both by austerity measures and by ad hoc regulations by EU and other intergovernmental organizations such as the IMF. However, the consequences remain: low growth, poor prospects for the youth and frustrated middle-class hopes, continued disenchantment with mainstream politics and considerable disquiet over the failure of democracy. In other words, it is unlikely the current crisis will produce a major social movement that may be the basis for social change on a European level unless either the economic crisis worsens, leading to a politicization of the middle class throughout Europe or the process of what I referred to as the recalcitrance of political developments in ways that connect political discontent with a revitalization of the left. As the historian Jürgen Kocka said in his speech on receiving the Holberg Prize in 2011: If we look more closely into the years after 1873 and 1929, we see that in both cases it was not the capitalist economy per se which led to those structural reforms, and not mainly the capitalist actors themselves who carried them through. Rather it was the interplay between the capitalist crisis, massive criticism of capitalism and political actions based on social mobilization in the public sphere—an interplay which generated partial solutions to basic problems and thus led to structural reforms. 4

The question now is whether the 2008 crisis will produce such a social and political transformation leading to a new model of society. In terms of intermediate strategies, despite the undermining of the state in the era of global networked capitalism, there are some grounds for optimism in that one of the lessons learnt since 2008 has been that the state has a capacity to assert itself over the economy, as demonstrated by rescue bailouts and new regulations imposed on the banking sector. It would probably take an alliance of the European left to bring about effective change, which has an essential part to play in the defense of democracy against the market. Oppositional politics—the aforementioned

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counterculture—will alone not be sufficient to bring about change, unless they broaden their scope and include more of the public. The politicization of the public along with a consolidated alliance of the left may produce the necessary impetus for a resolution of the crisis. To achieve this Europe will have to become more ‘European’. The core of European modernity, which has a civilizational underpinning, is in a social as opposed to either a market- or state-based conception of society. This has been one of the features that define the civilizational nature of European modernity, which it exported to the rest of the world in the previous century (Therborn 2012). If there is a core European value it has been the assertion of social justice. This has been expressed in the ways in which modernity has unfolded in Europe generally. Despite the huge variability in the social, political and cultural shape of modern Europe, something like a European societal model—as opposed to the EU institutional notion of a European model of society—has existed and is based on solidarity and the pursuit of social justice. If there is anything distinctive about a specifically European model of capitalism it is, as Offe (2003) has argued, the prominence of state-defined and state-protected status categories, which set limits to the rule of markets and of voluntary transactions. Viewed in a global perspective it is possible therefore to speak of a European model of social capitalism that underlies the diversity of these different national models. From the perspective of a theory of European modernity, such a conception of capitalism suggests that the form that political modernity has taken has been in a certain tension between state, economy and civil society whereby capitalism has always been constrained by civil society, which has also set limits to state power. The concrete outcome has been a certain balance between capitalism and democracy. This has been variously reflected in the nation-states of modern Europe and is an important structural feature of modern Europe, as Karl Polanyi also recognized with the argument that a certain consensus was worked out between European socialism and conservatism. T. H. Marshall’s famous account of the formation of modern social citizenship reflected in part this view of democratic citizenship as a counter-balance to the inequalities of capitalism. It is true that this perspective was limited by the absence of any sense of social struggles, seeing as he did the social contract as an achievement of the state and not as negotiated outcome of political mobilization spearheaded by trade unionism, socialist movements, labour and various social democratic parties. So to speak of Europe becoming more European is to assert the defense of the social against the market. Such a defense will also require a new vision of the social and the kind of economy that is desirable. The rekindling of democracy and capitalism will need to go beyond the anticapitalist critique of the market if it is to deliver a structural solution. There is still the challenge of creating an economy that delivers the

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goods, which include not only justice but also a sustainable ecological future. The struggle of social justice is now more complicated since it also involves addressing the ecological question. Is it possible that both can be addressed in a new model of politics for the twenty-first century? One of the major challenges for the future will be the creation of a new regime of accumulation based on a different foundation from the intangible world of finance capitalism and the rule of the market. Since there is no return to the heyday of industrial capitalism and Fordism, this will require both a revolution in the knowledge economy as well as the development and deployment of already created technologies, such as environmental technology, which could be the basis both of consumer demand and employment. John Urry’s (2011) argument for a new kind of ‘resource capitalism’ based on a low-carbon technological paradigm to replace neoliberalism would be one way of imagining a sustainable economy and a possible model for Europe to embrace (see also Fücks 2013). The advancement of a new regime of accumulation would require a European-wide collective will and possibly a Schumpeterian act of ‘creative destruction’ to bring it about, since it would require huge investment and a transnational management of the market and system of production. This will require a strong and transnationalized European state system. To conclude, Schumpeter (2010) may have been right when he prophesized in Capitalism, Socialism and Democracy in 1942 that innovation is a key dynamic to capitalism. To harness it for a progressive politics for Europe may be the most viable long-term alternative to neoliberalism, since it seems to be case that all other alternatives are simply strategies of making it livable. The realization that European integration has delivered neither democracy nor made capitalism work may be the call that will awaken the democratic spirit. BIBLIOGRAPHY Aglietta, Michel. 2012. “The European Vortex.” New Left Review 75 (May–June): 15–36. Arvidsson, Adam. 2009. “New Forms of Value Production.” In Routledge International Handbook of Contemporary Social and Political Theory, edited by Gerard Delanty and Stephen P. Turner. London: Routledge. Beck, Ulrich. 2013. German Europe. Cambridge: Polity Press. Berend, Ivan. 2012. Europe in Crisis. London: Routledge. Birnbaum, Norman. 2010. “Is Social Democracy Dead? The Crisis of Capitalism in Europe.” New Labor Forum 19/1: 24–31. Boltanski, Luc, and Eve Chiapello. 2006. The New Spirit of Capitalism. London: Verso. Calhoun, Craig, and Georgi Derluguian, eds. 2011. Aftermath: A New Global Economic Order? New York: New University Press. Castells, Manuel. 1996. The Rise of the Network Society. Oxford: Blackwell. Castells, Manuel. 2012. Networks of Outrage and Hope: Social Movements in the Internet Age. Cambridge: Polity Press. Castells, Manuel, Joao Caraca and Gostavo Cardoso, eds. 2012. Aftermath: The Cultures of the Economic Crisis. Oxford: Oxford University Press.

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Comaroff, John. 2011. “The End of New-Liberalism? What is Left of the Left?” Annals of the American Academy of Political and Social Science 637: 141–47. Conill, Joana, Manuel Castells, Amalia Cardens and Lisa Servon. 2012. “Beyond the Crisis: The Emergence of Alternative Economic Practises.” In Aftermath: The Cultures of the Economic Crisis, edited by Manuel Castells, Joao Caraca and Gostavo Cardoso. Oxford: Oxford University Press. Crouch, Colin. 2004. Post-Democracy. Cambridge: Polity Press. Crouch, Colin. 2011. The Strange Non-Death of Neo-Liberalism. Cambridge: Polity. de Grauwe, Paul. 2008. “Design Failures in the Eurozone: Can They Be Fixed?” LSE “Europe in Question” Discussion Paper Series 57. Deutschmann, Christophe. 2011. “Limits to Financialization: Sociological Analyses of the Financial Crisis.” European Journal of Sociology 52/3: 347–98. Engelen, Ewall et al. 2011. After the Great Complacence: Finance Capitalism and the Politics of Reform. Oxford: Oxford University Press. Fücks, Ralf. 2013. Intelligent wachsen: Die Grüne Revolution. Hanser Verlag: Berlin. Habermas, Jürgen. [1973], 1976. Legitimation Crisis. London: Heinemann. Habermas, Jürgen. 2009. Europe—The Faltering Project. Cambridge: Polity Press. Habermas, Jürgen. 2012. The Crisis of the European Union: A Response. Cambridge: Polity Press. Hall, Peter, and David Soskice. 2001. Varieties of Capitalism: The Institutional Foundations of Comparative Advantage. Oxford: Oxford University Press. Harvey, David. 2010. The Enigma of Capital and the Crises of Capitalism. Oxford: Oxford University Press. Iversen, Torben. 2008. “Capitalism and Democracy.” In Oxford Handbook of Political Economy, edited by Barry Weingast and Donald Wittman. Oxford: Oxford University Press. Joerges, Christian, Bo Strath and Peter Wagner, eds. 2005. The Economy as a Polity: The Political Constitution of Contemporary Capitalism. London: Routledge. Judt, Tony. 2010. Ill Fares the Land. London: Penguin. Kindelberger, Charles, Robert Aliber and Robert Solow. 2011. Manias, Panics and Crashes: A History of Financial Crises, 6th ed. London: Palgrave. Krastev, Ivan. 2012. “Europe Diminished? A Fraying Union.” Journal of Democracy 23/ 4: 23–30. Lapavitsas, Costas. 2012. Crisis in the Eurozone. London: Verso. Mahnkopf, Birgit. 2011. “The Euro Crisis: German Politics of Blame and Austerity—A Neo-Liberal Nightmare.” International Critical Thought 2/4: 472–85. Mavroudeas, Stravos, and Demophanes Papadatos. 2012. “Financial Regulation in the Light of the Current Global Economic Crisis.” International Critical Thought 2/4: 486–99. Offe, Claus. 1984. Contradictions of the Welfare State. London: Hutchinson. Offe, Claus. 2003. “Can the European Model of ‘Social Capitalism’ Survive European Integration?” The Journal of Political Philosophy 11/4: 437–69. Offe, Claus. 2013. “Europe in the Trap.” Blätter deutsche und international Politik 1. Published in English in Eurozine, accessed 3 April 2014. http://www.eurozine.com/ articles/2013-02-06-offe-en.html. O’Connor, James. 1973. The Fiscal Crisis of the State. New York: St. Martin’s Press. Pierson, Christopher. 2007. Beyond the Welfare State: The New Political Economy of Welfare. University Park, PA: Penn State University Press Scharpf, Fritz. 1999. Governing in Europe: Effective and Democratic? Oxford: Oxford University Press. Schmitter, Philippe. 2012. “European Disintegration? A Way Forward?” Journal of Democracy 23/4: 39–46. Schumpeter, Joseph. [1942], 2010. Capitalism, Socialism and Democracy. London: Routledge. Stiglitz, Joseph. 2012. The Price of Inequality: The Avoidable Causes and Invisible Costs of Inequality. London: Allen Lane.

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Stockhammer, Engelbert. 2012. “Euro-Keynesianism: The Financial Crisis in Europe.” Radical Philosophy 175: 2–10. Streeck, Wolfgang. 2011. “The Crisis of Democratic Capitalism.” New Left Review 71 (Sept/Oct): 5–25. Svalifors, Stefan, and Peter Taylor-Goody, eds. 2007. The End of the Welfare State? Responses to State Retrenchment. London: Routledge. Therborn, Goran. 2012. “Class in the 20th Century.” New Left Review 78: 5–12. Trenz, Hans-Jörg, and Klaus Eder. 2004. “The Democratizing Dynamics of a European Public Sphere: Towards a Theory of Democratic Functionalism.” European Journal of Social Theory 7/1: 5–25. Urry, John. 2011. Climate Change and Society. Cambridge: Polity Press. Wagner, Peter. 2011. “The Democratic Crisis of Capitalism: Reflections on Political and Economic Modernity in Europe.” LSE “Europe in Question” Series 44. Wagner, Peter. 2012. Modernity: Understanding the Present. Cambridge: Polity Press.

NOTES 1. See, for some recent sociological interpretations, Castells et al. (2012), Streeck (2011), Wagner (2011; 2012: chapter 5). 2. See Joerges, Strath and Wagner (2005) on the notion of “the economy as a polity.” 3. This is due in part to its control of its monetary policy, for the zloty, unlike the currency of the Baltic countries, is not tied to the euro (Krastev 2012). 4. http://www.holbergprisen.no/en/jurgen-kocka/speech.html (accessed 3 April 2014).

EIGHT Double Trust Creditors’ and People’s Confidence in the Euro Crisis Jenny Preunkert

The Euro and its member states have faced challenges since the introduction of the common currency. This chapter focuses on European crisis management and its social and political consequences. 1 It is argued that up to now European crisis management has been mainly focused on the financial market side of the current crisis, attempting to regain the trust of creditors, while the social consequences of the crisis and its own crisis policy approach have been more or less ignored and excluded. This onesided understanding of the crisis has resulted in a squandering of political trust, as the people of the affected societies have lost their trust in national and European elites. This political trust crisis has not only alienated the creditors and therefore extended the trust crisis of the financial markets, there are also indicators that this development runs the risk of endangering national social freedoms and the acceptance of the European project within the affected societies in the long run. Therefore, my argument is that today, we see preliminary indications that European crisis management seems to be successful in achieving their goal to regain the trust of the creditors. However it will also be shown that, as a negative ancillary effect, European efforts to regain the trust of creditors have resulted in a further trust crisis, the consequences of which are unpredictable. In the following, I will first develop a sociological understanding of crisis. Then I will discuss the economic side of the crisis and its crisis management. The next step will be to outline the economic and social 157

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consequences of crisis and crisis management. Based on this description, I will analyse the loss of trust by the people and discuss the resulting political damage potential, closing with a conclusion. 1. CRISIS AND CRISIS MANAGEMENT The term crisis is often used in daily life. However, the daily understanding of crisis is often diffuse and imprecise. In order to be able to use the term in an academic analysis, it seems necessary to define what a crisis is and what possibilities the actors have in confronting it. Following Jürgen Habermas (1973, 644), “crisis signifies the turning point of a fateful process.” A crisis is an unexpected development and a period of transition, in which a breakdown of the institution appears as a realistic option for the actors. It follows its own logic that differs from the expectations of the actors. Thus a crisis “is a relative concept, it indicates some discrepancy with earlier typical rates or direction of development, or with the wellfounded projections or extrapolations of future trends” (Sztompka 1984, 47-48). A crisis is not a determined process with a set of ineluctable rules; in fact, it is based on changes and developments at the level of system integration and social integration (Habermas 1992, Sztompka 1984). On the system level, “crises arise when the structure of a social system allows fewer possibilities for problem solving than are necessary to the continued existence of the system. ( . . . ) [However], only when members of a society experience structural alterations as critical for continued existence and feel their social identity threatened can we speak of crises” (Habermas 1992, 11-12). Thus, a crisis is a situation in which an institutional collapse is possible. However, problematic institutional constellations only become socially perceived crises through crisis interpretations. The development of a crisis and its outcome on the one hand and the interpretation of the crisis on the other hand interact with each other, which also means that crisis interpretation has significant influence on the development of the crisis. Crises threaten not only the stability of institutions but also institutional continuity. However, the concept of crisis also contains a spark of hope, as institutional collapse is only one possible outcome, not the inevitable conclusion to a crisis. Crises can therefore be overcome by appropriate measures. The political interpretation of economic, social or political crises is therefore essentially a search for possible ways out. Consequently, the political actors do not focus primarily on a diagnosis, that is, on the question of whether there is a crisis or not, but on finding answers for two questions: who has the responsibility to combat the crisis and what can be done to overcome the crisis. Political perceptions and interpretations of a crisis are thus closely linked to the question of crisis management (Peters 2011). Crisis management includes two tasks: the implemen-

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tation of “corrective action with respect to the present state of affairs” and the development of “preventive action directed at the future” (Sztompka 1984, 50). Thus, European crisis managers face two different challenges: They have to introduce and implement immediate actions to overcome the crisis in the short run and thereby stabilize the institutional framework of the Euro area. Additionally, they have to develop a reform agenda for the current institutional framework of the Euro area to prevent crisis in the future. For both tasks, the crisis manager can develop new tools or use already existing instruments. From the perspective of the actors, crises are open social constellations (Vobruba 2013, 3). As a result of crises, cognitive and normative certainties and formerly generally accepted ways of action lose their durable character and their taken-for-granted status, which means that the actors forfeit the possibility to deduce strategies for current situations from experience. Being able to act in times of crisis means both being open to new situations and preserving the capacity to act by keeping some of the existing institutionalized way of acting. The actors are only able to cope with the crisis when they develop new ways of acting as well as stabilize the existing institutional structure; acting in times of crisis has conservative and innovative moments. Consequently, it can be expected that crisis management initiates a mix of incremental and abrupt changes and results in both continuity and discontinuity (Streeck and Thelen 2005, 8-9). Therefore, it is an empirical question as to what extent and in what parts European crisis management has changed the institutional framework of the Euro area. Furthermore, as each crisis management is not based on objective criteria but on subjective crisis perception and interpretation, each chosen political crisis-management approach is the result of political arguing and negotiation processes. To understand European crisis management and its institutional consequences, one has to empirically reconstruct how the actors perceive and interpret the current crisis and what kind of crisis policy they have derived from their interpretations. 2.THE FINANCIAL SIDE OF THE EURO CRISIS The current problems within the Euro area are defined as a crisis of trust in the solvency of some Euro member states. We can recall that in the first ten years of the common currency, all members of the Euro areas enjoyed the same high degree of trust in the financial markets, which was shown by low interest rates. Furthermore, at that time, highly developed countries were labeled as safe harbors with nearly no risk of insolvency. Because of the financial crisis in 2008, first Greece, and then Ireland, Portugal, Italy and Spain have lost trust in the financial markets regarding state credit worthiness. This loss of trust, accompanied by an increasing risk of national bankruptcy, has been seen by Euro member states as an

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indicator of a new and critical understanding and evaluation of the Euro and its member states by the financial markets. Accordingly, European crisis management focuses on the restoration of creditor confidence in all Eurozone members. The following analysis will show that the crisis has changed the institutional framework of the Euro area. The integration process has been pushed by the crisis. Nevertheless it will be also become clear that crisis management focuses narrowly on financial market issues. European crisis management supports the efforts of affected governments to regain the trust of creditors. Concomitantly, the members of the Euro area concur that the institutional framework of the common currency must be reformed to prevent these types of crises in the future. Crisis management at the Euro level means therefore that the “[e]conomic policymakers in Europe are ( . . . ) confronted with the tough task of taking the right steps to stabilize the situation in the euro area in the short run. At the same time, the work on building a stable architecture for EMU needs to be resolutely continued, as this is vital for ensuring a stable longterm regulatory framework” (Sachverständigenrat 2012, 1). The chosen crisis management pushed the integration process inside the Euro area and parts of the EU. Before the crisis, the institutional framework of the common currency was based on the idea that it is possible to separate political responsibilities from fiscal and monetary policies (for a critical analysis of this separation, see Goodhart 2010). Within the common currency area, national political actors should hold sole responsibility for their budget without any transnational help or cooperation. Any kind of cooperation between the central bank and the government was precluded. For instance, since January 1, 1994, European central banks have been prohibited from buying government bonds on the primary market. Furthermore, following the no-bail out clause of Article 125 of the Treaty on the Functioning of the European Union, neither the Euro area nor individual governments can be held liable for the debts of other governmental or public bonds. The Euro governments refused to allow themselves the possibility of mutual assistance. The members of the Euro area should guarantee their status as highly creditworthy debtors by a restrictive austerity policy, which should be monitored by the financial markets themselves and by transnational control mechanisms. Crisis management seemed unnecessary or counterproductive in this situation: It was unnecessary in the sense that market failures were considered unlikely, counterproductive in the sense that crisis management might send the wrong political incentives. The declining trust of creditors and the threat of default led to a rethinking and re-evaluation of the current Euro institutional framework. Government defaults are now seen not only as possible but also as an incalculable danger to the institutional balance of the whole Euro area. Consequently, there has been a change in the understanding of the institutional interdependencies between members of the common currency,

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and Euro partners concur that the crisis states should get help. Various transnational support mechanisms were introduced to combat the crisis immediately. 2 With the European Stability Mechanism (ESM), 3 a bailout fund that compromises about seven hundred billion euros was established by the Euro governments, the European Commission and the International Monetary Fund 4 (Eichengreen 2012). The ESM supports threatened governments with loans and guarantees. Furthermore, the European Central Bank (ECB) buys government bonds on the secondary markets with the program called Outright Monetary Transactions. However, it was decided to only offer transnational help, while a supranationalization of fiscal policy (i.e., the introduction of euro bonds) is still rejected by some Euro members. Also, help is not granted unconditionally. The support of the ESM and the ECB is only available if the asking state is ready to accept several conditions; most of them target the reduction of public debt by savings and/or increasing the income of the state and the implementation of structural reforms in order to strengthen the competitive position of the affected state. Each state that accepts assistance commits to an individually negotiated austerity and reform package. The aim of European crisis management is to combine immediate crisis support with a durable policy of crisis prevention. Besides immediately functioning crisis management, the crisis has also led to a re-evaluation of the existing European regulatory approach. The control and regulation instruments of the Stability and Growth Pact are now considered too weak, which is why the pact was reformed and complemented with a new macroeconomic surveillance by a set of six European legislative measures (the so-called Six-Pack) in December 2011 (Salines et al. 2012). With the Six-Pack, stricter rules on budget discipline were introduced in the EU states, including more control and penalty instruments. For example, when a majority of the Euro member states do not pronounce against it, the European Commission now has the ability to hand out a monetary penalty of up to 0.2 per cent of gross domestic product to states showing a high public deficit. Besides these mechanisms, all EU member states except for the UK and the Czech Republic adapted the so-called European fiscal package, a commitment with strict limits on government debt. All participating states have pledged to implement a balanced-budget amendment into national law, as best suits their constitutions. Thus, the crisis caused further steps within the integration process. However, questions about the extent to which Euro member states will control one another or the extent to which the Commission will be willing and able to use the new control and enforcement mechanisms in the future are still open. Furthermore, concerning the balanced-budget amendment, it is also not clear to what extent and under what conditions this commitment, which is based on an international treaty and not on European law, is implemented on the domestic level. Up to now, it has been mostly the crisis states that have been affected by

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the new, tighter European framework. Greece, Ireland, Portugal and Spain had to implement the new standards to receive help. 5 But Italy also finds itself under increased observation by its Euro partners and thus feels greater pressure to implement the European requirements, as it is feared that the Italian government will need help in the future. 6 The loss of trust by the financial markets in the creditworthiness of some members of the Euro area has challenged and changed the selfconception of the Euro area and its member states. Not only has it become obvious that highly developed states can face the risk of bankruptcy, it has also become part of the common understanding that the Euro member states are dependent on one another and that, therefore, the national insolvency of one member state would cause incalculable risk to the rest. This new understanding of the Euro area has pushed the integration process and changed the institutional framework of the Euro area. The introduction of crisis management itself can be seen not only as a result of the new understanding of interdependency within a common currency area but also as groundbreaking, as we can observe an abrupt change in the institutional integration process as a result of this change discontinuity (Streeck and Thelen 2005, 9). It is the first time that a transnational system of assistance and support has been introduced among the member states of the common currency. The aim of the new crisis policy is to save the affected states and to regain the stability of the institutional framework of the Euro area. To help the affected countries, European crisis management was introduced to support these states with loans, guarantees and/or the purchase of government bonds. In addition, the crisis resulted in a re-evaluation of and enhancements to existing European fiscal regulations and monitoring. Although no supranational fiscal policy was introduced, European regulatory and control mechanisms were tightened. The aim is to prevent future capitalization problems of the Euro member states on the financial markets by strengthening national austerity policy approaches. The chosen policy approach shows some path dependence, as “its ‘logic of action’ has remained unaffected by the gradual changes that the institutional framework has undergone over the past four years. Contrary to the ‘breakdown or overhaul’ alternative which some are predicting, empirical observations point to persistence of the basic philosophy of the Maastricht blueprint” (Salines et al. 2012, 678). As with the precrisis institutional framework, European crisis management focuses on an austerity policy approach. Following the terminology of Streeck and Thelen, we can define a process of displacement, which means that former weak control and penalty mechanisms have become more dominant and that the idea of budget deficit reduction has become more powerful. Furthermore, a process of layering can be stressed, as new and further control and regulation mechanisms have been introduced and added to the institutional framework.

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Summarizing the results, we see that current developments and problems within the Euro area are defined as a crisis of trust in the financial markets, which is why the current policy efforts focus on the regaining of trust. To overcome the current mistrust of the financial markets, new groundbreaking crisis management was introduced. However, the chosen policy approach to combat the crisis and the efforts to prevent crises follow the idea of the Maastricht Treaty and can be seen as path-dependent institutional development. Since autumn 2012, national measures and European crisis management seem to be effective, as the interest rates of the affected states started to fall. This development has already entrapped some European politicians, such as French President François Hollande or German Minster of Financial Affairs Wolfgang Schäuble, into declaring the end of the crisis or at least the zenith of the crisis (BBC News 2013 and Spiegel Online 2012). Financial market confidence in the solvency of the euro members is coming back, so the crisis is over? 3. THE SOCIETAL AND POLITICAL SIDE OF THE CRISIS The picture changes when we include the economic, social and political dimension of the crisis in our analysis. Problems in the financial markets have been accompanied by economic problems in the affected states. 7 The situation is worse in Greece, whose economy is shrinking in terms of real GDP growth rate since 2009. However in Portugal, Spain and Italy, real GDP growth has also been more or less negative or only slightly positive since 2010. Even Ireland confronted negative economic development between 2008 and 2010, and since then its economy is increasing slowly. The shrinking of the national economies has been accompanied by growing social problems. The unemployment rate is growing, while the number of working people is decreasing. In 2012, total labor force unemployment was 10.7 per cent in Italy, 14.7 per cent in Ireland and 15.9 per cent in Portugal. In Greece and Spain, nearly a quarter of the potential labour force was jobless in 2012. The situation is even worse for young people looking for a job. Between 35 and 55 per cent of young people were unemployed in these five states. Furthermore, despite a decreasing median income, the poverty rate is increasing in Greece, Ireland, Italy, Portugal and Spain (Eurostat, 2013). In all five states, more than 25 per cent of the population has to live with an income that is below the risk-of-poverty threshold (which, by Eurostat definition, is set at 60 per cent of the national median equalized disposable income, after social transfers). While increasing social problems were more or less ignored on the European level during the first years of the crisis, now the growing number of jobless people and in particular the growing number of unemployed young people are seen as negative side effects of the economic

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development that have to be overcome by national and common efforts. With the Youth Employment Package in 2012 and the Youth Employment Initiative in 2013, the European Commission and EU member states have started an initiative to support national governments in their efforts to decrease the number of jobless people (European Commission 2012, 2013). Both measures include recommendations for the member states and commitments by the member states to improve their support for jobless people under twenty-five years of age with a job, a training offer or an apprenticeship. Furthermore, European governments plan to use the eight billion extra euros they received to support the efforts of the member states that are most economically disadvantaged (The Economist 2013). Thus, we see that growing social problems have been recognized on the European level, however it is still not clear how effective national and European efforts will be and whether they will be sufficient to combat the problem. The Economist is critical about chances for success as they emphasize that “[c]ompared with the scale of the problem, the funds on offer are puny. The pledge of €8 billion over two years is the equivalent of less than 0.1 per cent of GDP a year for the eligible countries, or €850 a year for every young European in those countries who is neither in work, nor training nor education” (The Economist 2013). Thus, the economic and social results of European crisis management have to be called double-edged. On the one side, the World Bank (2012), the OECD (2012) and others praised the efforts of Greece, Spain, Ireland and Portugal to undertake structural reforms. On the other hand, economic and social problems are growing in the affected states as negative side effects of the crisis and European crisis management. Up to now, the Euro partners have discussed financial problems separately from the economic and social situation. Negative economic and social developments have not been associated with crisis management by the Euro partners, and therefore they have not resulted in a rethinking of the process of crisis policy. 8 Rather, the Euro partners continue to follow the chosen policy and add some labour market efforts to their institutional framework. Current economic and social developments not only have negative effects for the affected people and their future but also for political and societal realms. As a result of the described changes, people have lost their trust in the political elite on the domestic and the European level. National governments have lost the trust of the people. Even before the crisis, in Greece, Ireland, Italy, Portugal, and sometimes in Spain, the people tended to mistrust their governments more than they trusted them. However, with the crisis and its consequences, trust is decreasing dramatically. 9 We see the worst loss of trust in Spain, where the ratio of people who say that they tend to trust their government has shrunk from 49 per cent in October 2007 to 8 per cent in May 2013. In Greece and Portugal, the ratio has decreased from 46 and 30 per cent respectively in

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October 2007 to nine and ten per cent in May 2013. Similarly, the percentage of Irish people who trust their government has decreased from 32 per cent to 18 per cent between October 2007 and May 2013. Even in Italy, where the ratio of trust had been traditionally low, people’s trust in the government has dropped from 23 to 11 per cent. As a political consequence of the crisis and crisis management, people have lost trust in their political elites (we find a similar loss of trust in national parliaments and so on). Not only have the national elites lost the trust of the people, the EU has also lost the support of the people. Traditionally, in all five countries, people viewed and evaluated the EU and its European actors more positively than their national counterparts (Banducci et al. 2009). Because of the crisis and crisis management, people have also lost their positive understanding of the EU and their trust in the European project. Before the crisis, more than 60 per cent of Greek and Portuguese people trusted the EU, now only 19 per cent of Greek and 24 per cent of Portuguese people say they trust the EU. In Spain, the ratio of people who trust the EU shrank from 57 to 17 per cent, in Italy from 53 to 29 per cent, and in Ireland from 58 to 25 per cent (Eurobarometer 2013). Similar results are found when one analyses trust in the European Commission and other European organizations. It can be said that until now more people trusted the EU than their national elite. However, people in all five countries have lost their trust in both levels of governance. The Euro crisis and its management have destabilized the affected societies with unpredictable consequences for both the financial markets and the people. When we focus on the financial crisis, it has to be stressed that the enormous negative economic, social and political side effects are linked to the development of the Euro crisis as a crisis of trust in the financial markets. The countries’ insecure economic futures and unstable political systems have alienated financial market actors, at least in 2011. During at least that year, a study of the International Monetary Fund showed that economic problems have prolonged the duration of the financial crisis (Cottarelli and Jaramillo 2012). In the same year, two rating agencies, Moody’s and Standard and Poor’s, based their decision to downgrade Greece, among others, with a reference to the growing political instability and the bad economic situation caused by austerity policies. Even if the rating agencies and the creditors seemed to regain their trust in the financial situation of the five states in 2013, one can conclude that the Euro crisis as a governmental debt crisis and its economic, social and political consequences run the risk of turning into a vicious circle with unforeseeable outcomes. Focusing on the societal and political dimensions of the crisis, it can be argued that “due to the policy responses to the ongoing sovereign debt crisis and their impacts on people’s lives and perceptions of well-being” (International Labour Organization 2013, 14), the affected societies have

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become unstable and more vulnerable. Following a study of the International Labour Organization (2013), the risk of social unrest has been increased in Greece, Italy, Portugal and Spain between the years 2010 and 2012. People are disappointed by the performance of the political elite and have lost their trust in them. These political divergences aggravate the risk that the population sees itself in opposition to the political elite. On the national level, the political crisis in Greece and Italy in 2013, but also the people’s protests against current policy in Greece, Italy, Spain, to a lesser degree in Portugal, and to a much lesser degree in Ireland in recent years can be seen as indicators of such a development. Up to now, it is unclear if the national elites are able to regain the trust of their people and therefore voters or if social peace has sustained long-term damage. On the European level, the crisis and its European management have caused broader awareness of the European project. However the growing awareness goes hand in hand with a critical evaluation and a critical understanding of the EU. People have started to define the European elite as responsible actors for current developments (Serricchio et al. 2013, 61). Up to now, the decreasing trust in the EU and its actors has not had consequences on the European level as the governments of all five states have always been in favour of the European project and willing to follow the European policy approach. However, in the last election, eurosceptical parties were able to gain voters in Italy and Greece. Thus, it is also unclear if the loss of trust will have sustained consequences for the European integration process. The future will show if the European elites are able to use the new awareness and new attribution of responsibility to strengthen their own legitimate base or if the loss of trust will strengthen nationalistic and eurosceptical powers on the national and European level and therefore endanger further European integration. Returning to the question of whether the crisis is over, we see that the answer is no, the crisis is not over. One-sided crisis management has provoked further problems that go far beyond the troubles of the financial markets and can risk the social peace, political stability and operational capability of the affected societies and the whole EU project. CONCLUSION Current developments are a double trust crisis. The Euro area has not only lost the trust of the financial markets in the financial standing of some of its members and in its own ability to handle such problems, it has also lost the trust of the people of the affected societies. The first part of the crisis seems to be clear and concrete. The creditors lost their trust, which increased interest rates and increased the risk of state bankruptcy. Consequently, from the viewpoint of the European crisis manager, the aim has to be to regain the trust and to make sure that the trust will not

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get lost again in the future. Since 2012, crisis managers seem to be successful as the interest rates have started to decrease for all five states. The second part of the crisis, the loss of political trust, is more diffuse and has less immediately conspicuous consequences. However it is also real and dangerous for the affected societies as well as the whole EU. The increasing risk of social unrest imperils the social peace of the affected societies and the legitimate basis of the EU. BIBLIOGRAPHY Banducci, Susan A., Jeffrey A. Karp and Peter H Loedel, 2009. “Economic Interests and Public Support for the Euro.” Journal of European Public Policy 16:4: 564–81. BBC News, 2013. “Euro crisis is over, says France’s Francois Hollande.” Accessed March 17, 2004. http://www.bbc.co.uk/news/business-22832471. Blanchard, Olivier and Daniel Leigh, 2012. “Are We Underestimating Short-term Fiscal Multipliers?” International Monetary Fund, World Economic Outlook October 2012: Coping with High Debt and Sluggish Growth, Washington, DC: 41-43. Cottarelli, Carlo and Laura Jaramillo, 2012. “Walking Hand in Hand: Fiscal Policy and Growth in Advanced Economies.” IMF Working Paper, Fiscal Affairs Department Washington, DC. Eichengreen, Barry, 2012. “European Monetary Integration with Benefit of Hindsight.” Journal of Common Market Studies 50/1: 123–36. Eurobarometer, 2013. Public Opinion in the European Union. Standard Eurobarometer 80, Autumn 2013. Accessed March 2014, 17: http://ec.europa.eu/public_opinion/ archives/eb/eb80/eb80_first_en.pdf. European Commission, 2012. Moving Youth into Employment. Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions. Brussels, COM (2012): 727 final. European Commission, 2013. Youth Employment Initiative. Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions. Brussels, COM (2013): 144 final. Eurostat, 2013. Newsrelease 184/2013. 5 December 2013. Accessed March 2014, 17: http:/ /epp.eurostat.ec.europa.eu/cache/ITY_PUBLIC/3-05122013-AP/EN/3-05122013-APEN.PDF. Goodhart, Charles A. E., 2010. Europe after the Crisis. Brussels: Institute for New Economic Thinking. Habermas, Jürgen, 1973. “What Does a Crisis Mean Today? Legitimation Problems in Late Capitalism.” Social Research 40/4: 643–67. Habermas, Jürgen, 1992 [1988]. Legitimation Crisis. Cambridge: Polity. International Labour Organization, 2013. World of Work Report 2013. Repairing the Economic and Social Fabric. Geneva: International Institute for Labour Studies. International Monetary Fund, 2013. Fiscal Monitor, October 2013. Washington, DC: International Monetary Funds. OECD, 2012. Economic Policy Reforms: Going for Growth 2012. Paris: Organisation for Economic Co-operation and Development. Peters, B. Guy, 2011. “Governance Responses to the Fiscal Crisis—Comparative Perspectives.” Public Money Management: 75–80. Sachverständigenrat, 2012. “Stabile Architektur für Europa—Handlungsbedarf im Inland.” Jahresgutachten 2012/13. Wiesbaden: Statist. Bundesamt. English version, accessed March 17, 2014: http://www.sachverstaendigenratwirtschaft.de/fileadmin/ dateiablage/Sonstiges/chapter_two_2012.pdf.

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Salines, Marion, Gabriel Glöckler and Zbigniew Truchlewski, 2012. “Existential Crisis, Incremental Response: The Eurozone’s Dual Institutional Evolution 2007–2011.” Journal of European Public Policy 19/5: 665–81. Serricchio, Fabio, Myrto Tsakatika and Lucia Quaglia (2013). “Euroscepticism and the Global Financial Crisis.” Journal of Common Market Studies 51 (1): 51–64. Spiegel Online, 2012. “We Certainly Don’t Want to Divide Europe.” Interview with Finance Minister Schäuble. Accessed March March 17, 2014. http://www.spiegel.de/ international/europe/finance-minister-schaeuble-euro-crisis-means-eu-structuresmust-change-a-840640-2.html. Streeck, Wolfgang and Kathleen Thelen, 2005. “Introduction: Institutional Change in Advanced Political Economies.” In Beyond Continuity, edited by Wolfgang Streeck and Kathleen Thelen. Oxford/New York: Oxford University Press: 1–40. Sztompka, Piotr, 1984. “The Global Crisis and the Reflexiveness of the Social System.” International Journal of Comparative Sociology 25 (1-2): 45–58. The Economist, 2013. “Youth Unemployment in Europe. Guaranteed to Fail.” The Economist, July 20, 2013. Accessed March 17, 2014. http://www.economist.com/news/ leaders/21582006-german-led-plans-tackling-youth-unemployment-europe-are-fartoo-timid-guaranteed-fail. Vobruba, Georg, 2012. Kein Gleichgewicht. Die Ökonomie in der Krise. Weinheim, Basel: Beltz Juventa. Vobruba, Georg, 2013. Gesellschaftsbildung in der Eurokrise. Leipzig: Serie Europa— Europe Series No. 3/2013. Accessed March 17, 2014. http://www.uni-leipzig.de/leus/ wp-content/uploads/2013-03-Vobruba-Gesellschaftsbildung-in-der-Eurokrise.pdf. World Bank, 2012. “Doing Business 2013: Smarter Regulations for Small and Mediumsize Enterprises.” Washington, DC: World Bank.

NOTES 1. The article focuses on developments in Greece, Ireland, Italy, Portugal, and Spain and excludes the crisis in states such as Cyprus or Slovakia. 2. For an overview of the individual steps of the implementation process of the transnational support system, see Salines et al. 2012. It can be said that the introduction of European crisis management was rough and unexpected. It was introduced ad hoc and step by step, which can be seen as indicators of the enormous normative and cognitive challenges the actors faced at that time. One of the most important arguments in favour of European crisis management has been the thesis of contagion, which says that national insolvency of one Euro member state would cause an incalculable risk to other weak debtor states and, at the end of the day, an incalculable risk to the whole Euro area (Vobruba 2012). 3. Before the ESM was introduced, Euro member states implemented bilateral support for Greece in April 2010 and later in 2010 the provisional and temporary European Financial Stability Facility as well. 4. Before the OMT, the ECB first implemented the “Securities Markets Programme” (SMP). Within the SMP, the ECB bought public bonds from those Euro member states that had problems refinancing themselves on the financial markets with a sum from a total of 220 billion euros from May 2010 to February 2012. Contrary to the OMT, within the SMP, the ECB demanded no pre-conditions from the affected states. 5. Greece, Ireland, and Portugal received help in order to be able to refinance their domestic state budget; Spain got help for its banking sector. 6. In 2010, the former Italian government asked the financial experts of the International Monetary Fund for help and a critical evaluation of Italian fiscal policy in order to calm the financial markets. 7. That is also why public debt in relation to GDP has grown despite the enormous government efforts to reduce debt (Sachverständigenrat 2012, 10). An International

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Monetary Fund study shows that in spite of enormous savings and budget cuts, it was not possible for the affected governments to reduce their budget deficit because of the shrinking economy. Only Greece was able to reduce its governmental general gross budget deficit based on the haircut in 2012 (International Monetary Fund 2013, 1-7). 8. The International Monetary Fund is more critical about the chosen policy approach. In one study by that organization, it is stressed that its own analysis framework was too optimistic about the economic development in the affected states and underestimated the fiscal multiplier (Blanchard and Leigh 2012). 9. See Eurobarometer annual reports Public Opinion in the European Union. The last report (Autumn 2013) is available at http://ec.europa.eu/public_opinion/archives/eb/ eb80/eb80_first_en.pdf (accessed March 2014, 17).

NINE What Must Be Democratized? The European Union as a Complex Democracy Daniel Innerarity

What are the criteria for judging the democratic quality of the European Union? Who vouches for it? Is it possible to reconcile our democratic criteria with the intense, extensive complexity of a polity such as the European Union? In order to answer these questions appropriately, it is helpful to begin with the acknowledgement that we do not have an acceptable theory of democracy for anything more complex than nation-states. That is why we must develop a political taxonomy that does not sacrifice the complexity of the European Union to the comfort of our well-established concepts. If we do not take into account the EU’s principal democratic innovations— which I have summarized here as the pluralization of democratic criteria, the indeterminacy of power and the replacement of territoriality for functional differentiation—it is not possible to criticize its democratic weaknesses. As I will show, this lack of attention to the integration process is what makes certain attempts to exert national control on the democraticity of communitarian decisions questionable. 1. LOST IN TRANSLATION If poetry, as Robert Frost affirmed, is what is lost when a poem is translated to another language, we could say that all the difficulty of the European jigsaw puzzle consists of moving from one level to another without losing the normative horizon of democracy or sacrificing the specificity of 171

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each institutional plane. It does not seem to be an easy task, judging by the quantity of invasive extrapolations that are at the heart of our conceptual and pragmatic difficulties when it comes to finding the proper format for democracy in Europe. It is common practice, both for scientists and laypeople, to begin with the known in order to better understand what is unknown or new. Comparisons are generally useful for evaluating different realities. But this exercise can end badly, both intellectually and in practice, when the comparison refers to things that have very different natures and, rather than proceeding by analogy, it is through assimilation or extrapolation. Many of the difficulties that arise when attempting to understand the novelty of the European Union are due precisely to the fact that many of the concepts that are applied to the study of European integration come from disciplines like law or political science that are still basically tied to the conceptual universe of the nation-state. In the field of European constitutionalism, it is difficult to avoid a “touch of stateness” (Shaw and Wiener 1998, 65). Sociology is also a child of the nation-state, and its analysis has accompanied the emergence and development of modern statehood and social integration. Political philosophy, on the other hand, is not as conditioned by this state tradition (which does not free it from committing other errors, of course), and perhaps because of that, its focus is of special value for enriching European studies with new concepts. Official exhortations to respect the specific characteristics of the process of European integration have not protected us from these translation errors. Luhmann warned years ago against the error of extending our social categories to the European or global plane (1997, 145), and Weiler sounded an alert about “problems of translation” (1999, 270). In Beck and Grande’s opinion, the reason we struggle to understand the European Union is precisely because we analyse it with concepts that stem from a world of states (2004, 10). The “analogical fallacy” (Majone 2009) is the cause of a lot of our theoretical perplexity and our practical inability to democratically govern a political reality that is notably different from the nation-state. A certain appeal to European “oddity” is not freed from this conceptual framework either; the more the peculiarity of the Union is referenced, the more we are led to believe that the nation-state remains the dominant conceptual framework and the end game for our normative expectations. In this way, we fail to take advantage of an opportunity to understand the extent to which European integration is an answer to the challenges of a more integrated world and not a reaction against those new realities. Affirming that the European Union is a reality sui generis affords it the charm of being unclassifiable. The problem is that it does not allow us to escape from the categorical framework of statehood, because what we are saying in the end is that the European Union is not a state. A negative definition of the Union ensures the dominance of the

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categories that have been denied. In fact, our current debates are polarized between those who conceive of the Union as a federal state and those who defend a federation of states; in both cases, statehood continues to be the dominant category. In any case, calling the European Union an institution sui generis does not resolve much, because one would have to say whether it is a sui generis state or a sui generis international institution (Kumm 2011, 115–16). Many of the misunderstandings when it comes to thinking about European integration stem from these “translation errors.” The first challenge we have to face is of a cognitive nature and consists of conceiving of European integration without state categories. This is because the debate about democracy in Europe has been polarized by the intergovernmentalists and federalists, among whom there is a background agreement, a tacit template, according to which the nation-state is the basic point of reference. Intergovernmentalism does not sufficiently explain the dynamics of European integration, but most of transnationalism does nothing but replicate the concepts of the nation-state on the European scale. Both perspectives are equally state-centric because they either view member states as the principal protagonists or they aim to have Europe become a state. The analogy with the nation-state is mistaken both if we talk about the nation-state as the model to which the Union should aspire or as the reality from which it cannot distance itself. Of course the EU is made up of states, but its nature is incorrectly interpreted whenever it is reduced— conceptually or in practice—to a mere aggregate of states. The fact that the EU is not strictly speaking a state does not mean that it is limited to mediating between states and that it receives its legitimacy from that mediation. The basic error is conceiving of the European Union as the mere projection of the categories of nation-states on another scale or as the reorganization of already existing spaces, instead of as the configuration of a new space and a different political entity. The EU represents one more evolution in the movement that goes from territorial forms of differentiation belonging to the nation-states toward the functional differentiation of the contemporary world. Its hybrid structure is connected to this process. The EU has come to the assistance of states that were incapable of fulfilling certain functions, and it has afforded its citizens many opportunities, but this change in scale cannot be carried out without modifying some things to which we were accustomed. In spite of that fact, the European Union is not a substitute or a mere defensive correction or a prosthesis for the states. The functional equivalents are merely analogous; they do not perfectly replace what came before. We will have to modify our democratic expectations in one way or another. If we conceive of European integration properly, we will be positioned to propose suitable solutions for its obvious weaknesses. We will

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be able to avoid, first off, the error that stems from an improper categorical translation. For example, a large portion (although not all, of course) of what is called the EU’s “democratic deficit” originates precisely in an improper projection of the national model onto the European plane. It is not so much that there are particular deficits in the European Union but that it is impossible to create a political entity in the twenty-first century based on existing nation-states following the paradigm of modern democratic statehood. In any case, we must always distinguish democratic weaknesses that need to be corrected from those that arise out of the contrast between the state format of democracy and new transnational spaces. Those who vindicate constitutional moments or opportunities for democratization of the European Union are implying that they conceive of a Europe “ready for Hegel” (Schwengel 1999, 68), as if the democratic concept and practice of nation-states were the only possibilities, examples that should be mimicked in other areas with greater interdependence and complexity. When it is specifically affirmed, for example, that Europe does not have the conditions to allow a true democracy or to develop effective redistribution, what conditions are we referencing? The conditions of the nation-state? Statehood, even if it is only in an implicit and involuntary fashion, continues to be the reference point to which we aspire. One example of unnecessary translation is, for example, bemoaning, as Majone does (2009, 23), that no “Europeanization of the masses” has taken place in the way it did in the nineteenth century during the processes of constructing the nation-states (some of which were, incidentally, very weak). However, proof that those who are unsatisfied are not always right is the fact that some proposed solutions are even more unsatisfactory than the problems detected. The protests point in the right direction—transparency, participation, democratic control—but they are mistaken when they do not manage to conceive of other forms of legitimacy that could work for spaces and decisions that are no longer in the realm of the nation-state and probably never will return to that known territory. Some of the proposals to improve democracy in the European Union—awarding more power to the European Parliament, restricting state vetoes in the Council of Ministers or making the European Commission responsible before the electorate (we will not address the appropriateness of these proposals here)—do not do justice to the complexity of the EU and reveal that they are truly thinking within state categories and projecting them onto the European level. This translation is not always inconvenient, but it should be carried out thoughtfully, not automatically, respecting the peculiarities of the European structure and the diversity of values that are in play in its delicate balance.

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We will only be capable of resolving these political dilemmas if we manage to liberate the categories of social and political thinking from its state format, without ignoring its current persistence. Representative democracy should be reinterpreted to understand, describe and value the European Union. To elaborate a concept of democracy applicable to Europe—a “Europafähiger Demokratiekonzept” (Benz 1998, 357)—we have no choice but to “reset the standard,” which does not necessarily mean less democratic demand. It implies, fundamentally, not generalizing a specific historic arrangement, such as the national identities constructed in the nineteenth century. In the dominant theories, the criteria for judging the democratic character of the EU are taken, explicitly or implicitly, from the example of the nation-states. That means, among other things, losing sight of the contingent and controversial nature of nation-states (Wiesner et al. 2011, 11). The type of configuration of the political space that modernity realized with the invention of the state—the typical contrast between state and society, the relationship between identity and territory, the invention of sovereignty—is not the only or the best possibility for the realization of democracy. Given that the process of European integration is developing a structure which goes beyond cooperation between states but which cannot be assimilated to the concept of statehood, the process will allow us to rediscover possible alternatives to the modern state that had previously been marginalized (Diez 1996, 256). Let us explore these possibilities instead of trying to reduplicate known realities on another scale. 2. AN EXERCISE IN POLITICAL TAXONOMY: THE NATURE OF THE BEAST Many of our differences in opinion about the degree of integration that is desirable have their origin in the original disagreement about how to understand the European Union. For this reason, any philosophical reflection about the future of integration should be preceded by an exercise in euro-taxonomy, describing the type of animal we are confronting in the European Union, clarifying as much as possible “the nature of the beast” (Risse-Kappen 1996, 34). To avoid diagnostic errors, we must do justice to the complex array of practices and negotiated regulations that belong to a posthierarchical polity (Tully 2008; Wiener 2008) whose structures of governance have emerged as answers to functional necessities relative to managing growing social complexity. The EU’s principal complexity—its sometimes contradictory tensions, the tortuous nature of its commitments, multilevel institutionality, or whatever we want to call it—stems from the necessity of combining the state realities that comprise it with the challenges of transnational governance. European complexity does not depend as much on the quan-

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tity of actors as on the diverse nature of the experiences and principles that should be attended if we are facing true integration. Stated paradoxically: there is no viable path if we maintain the contrast between the national and the transnational, but it is no easier if we fully abandon that contrast. This constitutive complexity always brings us face to face with a dilemma: in regards to the “pouvoir constituant,” it is not possible to escape the consensual demands of a community configured by means of a treaty, while the pouvoir constitué tends to be decided by the majority, which suggests federality. Consensual obligation ensures consensual multinational plurality, while majority rule provides effective decision-making capabilities. One cannot suppress both traits without substantially modifying the character of the European Union, its constitutive complexity. That is why it does not seem likely that the EU will become a federal state in the classic sense, but rather a mixed system with traits that are increasingly federal, but which at the same time maintains the texture of international cooperation. Wallace defines it as “a constitutional system which has some state attributes, but which most—or all—of its constituent governments do not wish to develop into a state, even while expecting it to deliver outcomes which are hard to envisage outside the framework of an entity which we would recognize as a (federal) state” (Wallace 1994, 272). The EU is constructed to accommodate the difference presented by a group of institutions that combine intergovernmentalism and supranationalism, which would, in some people’s opinion, justify fusing both terms into the expression “intergovernmental supranationalism” (Ludlow 2005). Its multilevel arrangement is composed of intergovernmental, supranational and transnational structures of government. That is why the European Union can be defined as a “synthetic polity” formed by already established constitutional states that are integrated through the law (Fossum and Menéndez 2011, 216). This great innovation can be qualified as pluralist because there is only one constitutional law, but a plurality of institutions where that law can be interpreted and applied with authority. It is essential to keep this complex plural balance in mind in order to correctly diagnose what is called a democratic deficit and to propose reasonable solutions. The debate generated by this question is largely due to the fact that the assessment of the European Union’s type of governance will depend on whether we take as a model the democratic commitment of the classic nation-state or the unexplored territory of transnationalism. Europe has a very complex form of compounded representation that articulates the coexistence of different channels and institutions that vindicate the representation of European citizens (Benz 2003; Lord and Pollak 2010). Basically the structure of EU legitimation proceeds from the

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generality of the citizens through the European Parliament and from the states represented in the European Council. National parliaments, the directly elected European Parliament, the European Council, the Commission, the organizations of civil society all attempt to represent the citizens in their diverse facets. This makes the European Union a multilayered, polyarchical polity, with fluid and complex institutional balance. The concept of “demoi-cracy” (Nicolaïdis, 2003 and 2012) is probably what best expresses this dual nature of the European Union. In any case, there is a concept of democracy that corresponds to the EU’s very nature. If the European Union is perceived as something new, this novelty should also be reflected in the democratic demands we make of it. The Treaty of Lisbon seems to understand that when it presents a network of legitimacy that includes both direct and mediated procedures. But the complexity of its institutional balance always leads us to a dilemma, a nonresolved tension—which we may need to protect as an open question, reminding us of the provisionality and revisability of human constructions. One possible definition of European democracy is articulated by the will of state representatives, who add up the democratic will of their respective electorates. The second is the idea of a European democracy as a direct expression of European citizens. The ambiguous nature of the European Union, its hybrid position in the area between a federal state and a federation of states, its precarious constitutional balance, should be considered a strength and not a weakness, to the extent to which it leaves open the question of how to articulate its political unity while maintaining its diversity. The European Union is an interesting case study of democratic complexity because it showcases all the richness and difficulty of governing a complex institutional network democratically. The fact that it is a compound polity makes us develop a democratic theory that does not begin with the axiom of homogeneity but which articulates distinguishing and common characteristics as part of all polities. They all attempt, as the experts have posited, to “moderate heterogeneity by renouncing hegemony” (Franzius and Jauss 2012, 46). In this sense, the EU is more constricted than the nation-states, precisely because of the plural structure of its government, divided between institutions, levels and functions that limit each other. Abromeit has summarized this complexity with eight categories: (1) various levels (community, member states, substate units); (2) various dimensions (territorial, functional); (3) formal, complex decision making (institutionalized); (4) informal, complex decision making; (5) actors with various degrees of “Europeanization”; (6) political arenas with diverse degrees of “Europeanization”; (7) policies that add various numbers of participants; and (8) those following different decision-making rules (Abromeit 1998). Those who are concerned with how to articulate this diversity normatively should begin by renouncing the imposition of a

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unique principle of legitimation. “The production of democratic legitimacy is such a complex task that it cannot be carried out without a division of labor” (Lübbe-Wolff 2010, 280). In such a dense polity, the legitimations are more complex, and it is more difficult to articulate democratic responsibility. We can illustrate this diversity of institutions, planes, and ideological elements in the following chart (inspired by Hürrelmann 2007 and Middelaar 2012). In it, we can visualize, on the federal, technical and intergovernmental level, the institutions that are considered central in accordance with the dominant vision of the EU, what types of legitimation, government and idea of the people correspond to them, as well as dominant ideological elements, depending on one’s conception of Europe. Without having the neutral logic of a puzzle, this chart attempts to highlight the coherence of certain ideological options on the basis of what is expected of the European Union as well as the need to balance all the possibilities that are in play. The democracy that is possible under these conditions is very similar to the American system with its various levels, checks and balances, plu-

Table 9.1. European Complexity, Its Logic and Principles FEDERAL LEVEL

TECHNICAL LEVEL

INTERGOVERNMENTAL LEVEL

DEMOCRATIC PRINCIPLE

Direct representation

Deliberative

Indirect representation

CENTRAL INSTITUTION

European Parliament

European Commission/ European Court of Justice

European Council/ member states

TYPE OF LEGITIMATION

Analogical

Complementary

Derived

TYPE OF Majoritarian GOVERNMENT

Deliberative

Consociational

DEMOS

The People

Stakeholders

The Peoples

POLITICAL LOGIC

Federalism

Functionalism

Confederalism

IDEOLOGICAL ELEMENTS

Direct democracy

Aristocracy

Representative democracy

IDEOLOGY

Republican

Technocratic

Liberal

CIVIC HORIZON

The citizens’ Europe

The experts’ Europe

The states’ Europe

IDEOLOGICAL MOMENT

Madisonian

Saint-Simonian

Rousseauian

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ralism of interests, diverse public opinion and scenarios. The institutional equilibrium of the EU is closer to the concepts of “mixed government” of the first modernity (pre-Hobbesian republicanism) than to the later idea of the division of powers (Majone 2005). Although the American constitution is based on the functional separation of powers, limited by the mechanisms of checks and balances, and the EU is characterized by shared power, the two models have many similarities. In this sense, European democracy is somewhat separated from the Westphalian state model. In both cases, small countries are overrepresented: there is one commissioner on the Commission per state, and the weight of the votes in the European Council does not depend on population, while in the American senate, there are two senators per state, regardless its size and inhabitants. This means that in both cases, decisions need very broad majorities: a qualified majority for the Council and a three-fifths majority in the American senate. The consequence is that policies cannot be adopted unless they are supported by a great number of political interests. The institutional system of checks and balances implies sensitivity toward national interests. The suspension of sovereignty is compensated by the fact that the risk of harming the interests of smaller countries is minimized. The only institutions that have made progress in the adoption of common policies are those devised to be managed by consensus. This has surely presented us with more than a few problems of indecision and obstruction. That is why in the last years some elements that are more in fitting with state homogeneity than interstate balance have been introduced. These range from majoritarian decision-making procedures that note the size of the respective populations to direct representation in the elections of the European Parliament. It is probably necessary to move forward in that majoritarian and federalizing direction, but without forgetting that the EU, as a complex entity, does not allow a complete imposition of this logic over the idea of interinstitutional balance, as if we were facing a state polity and not a relatively novel entity that must reconcile, paradoxically enough, state and poststate realities. 3. THE DEMOCRATIC INNOVATION OF THE EU The European Union contains elements that distinguish it from the nation-state, even if these characteristics are more or less recognizable in the history of the nation-state. It would make sense to group them according to three common characteristics. In the first place, the EU intensifies and complicates the diversity of the criteria of democraticity that are already present in the nation-state. In the second place, the flip side of this pluralism is the indeterminacy of power, which also means an intensification of the democratic process. And in the third place, the European Union should understand itself as a response to the process of functional diffe-

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rentiation and globalization that weakens forms of territorial power, in such a way that it makes it possible to recuperate spaces of political configuration. Therefore, these three properties allow us to understand that the process of integration, far from necessarily condemning us to a reduction of our democratic expectations, affords possibilities of making progress toward democratization. The Pluralization of Democratic Principles Democracies are controlled by a plurality of principles that are not always easily compatible. Democratic progress does not simplify this network of principles but, quite the opposite, often makes things more complex. This suggests that the task of balancing them appropriately is the principal challenge we must face. In the face of the monism of some of its clumsier early versions, democratic renovation today passes through the correct combination of the diverse components of a complex democracy: representation, effectiveness, delegation, election, participation, advice, balance, responsibility, none of which exhaust—particularly under the current conditions of complexity—all the dimensions of the democratic process. As with Aristotle’s “being,” democracy is described in a lot of different ways, and being closer, more immediate, more direct or more popular does not always make it more democratic. There are institutions that do not have procedures for majority decisions or whose members are not elected (or only indirectly elected), like courts, central banks or certain regulatory institutions, that are not ruled by the logic of popular decisions or representativity, but by other criteria such as competence or independence. No one can conceive of the correct functioning of a democracy without these institutions, whose democraticity is very indirect. This pluralization of democratic ways of thinking is also clearly seen in the realm of territoriality, especially when we examine the function of compound polities such as federal states or the European Union. Most federal states are diverse institutions that mix majoritarian, counter-majoritarian, and nonmajoritarian techniques in an effort to balance unity and diversity. We see this, for example, in the election of the president, a constitutional tribunal, a senate or a central bank. The EU does not do anything very different, with the federal element more restricted because of the limitation of competition on this level. Democracy in the European Union (and in other types of polities) is realized through a plurality of strategies and not exclusively through popularity. Some have summarized the European plurality of legitimation principles around four vectors: indirect, parliamentarian, technocratic and procedural (Lord and Magnette 2004, 188). None of these can be taken alone, ignoring everything else. To state it graphically, one could affirm that the European Union combines classic elements of the aristoc-

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racy (the Commission), direct democracy (the European Parliament) and indirect democracy (the Council, in other words, the member states). Improving European democracy must mean rebalancing these criteria according to the types of matters that are in play. Indeterminate Power One of the novelties that stands out the most and has the greatest democratic significance has to do with something that, depending on one’s point of view, may be considered a mere difficulty. I am referring to the principle that the more advanced a system and the more democratic its political culture, the more indeterminate is its ultimate definition of power, supremacy, identification of responsibility, the centrality that makes everything intelligible, the originating source of authority or whatever we want to call it. This has been the motive for multiple discussions that have addressed the dispute over supranational institutions’ supremacy, constitutional pluralism or control of democraticity. From the point of view of its political ontology, the EU is a polity without a centre, a “political community with different levels of aggregation” (Schmitter 2001). European institutions are strongly interconnected but lack a clear hierarchical order. The system combines supranational and intergovernmental principles in a multilevel and pluralist structure, more consensual and cooperative than antagonistic and hierarchical. There is not an “Archimedian point” from which all legal and political authority unfolds (Schütze 2012, 211). The EU presents a defiant change of paradigm in the face of legal monism and the hierarchical logic that stems from the state-centric tradition. European practices of governance are “heterarchical”; authority is not centralized or decentralized but shared (Neyer 2003, 689). That is the reason for the profusion of expressions like “governing without government” (Rosenau, Czempiel, Zürn), “law beyond the state” (Volcansek, Neyer) or “constitutionalization of international politics” (Stone). These phrases attempt to identify a model of governance that relativizes the monopoly of the representation of one’s own interests in the context of complex multilevel structures within transnational networks that overlap without forming hierarchical structures that are similar to state structures. This reality is at the heart of the complaints about such apparently diverse matters as the EU’s lack of intelligibility, lack of transparency, difficult accountability or weak leadership. Behind these deficits, there are without a doubt shortcomings that should be corrected, but also attributes that, from a certain point of view, could even be considered democratic successes. It is true that “the lack of transparency of the European ‘Politikverflechtung’ [‘joint decision trap’] increases the impossibility of sanctioning any single person or party for a positive or negative performance” (Höreth 1998, 17). However, perhaps we are judging this ques-

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tion from the matrix of the nation-state when we should, instead, take advantage of this circumstance to consider a more complex and less personal idea of responsibility, ways of making shared power intelligible and responsible (Innerarity 2012). The lack of centrality and the multiplicity of levels in the EU match the diffuse leadership, scant polarization, and not very well-understood greater collegiality. There are those who interpret this as a political deficit, but it can also be seen as an advanced stage in the evolution of politics, when the personalization of sovereign power has been left behind. “The problem is not so much that it is impossible to provide a clear picture of the European types of policy-making, it is rather that it is impossible to trace those processes to a set of identifiable authors and thus to deal with the ‘intelligibility problem,’ whose democratic figure is the ‘accountability’ problem” (Leca 2009). Leadership is lacking not so much because of the personalities of European leaders, but because the present set of institutions, rules and conventions do not allow for such a role. In this sense, Europe is a good example of this “empty place” that according to Lefort defines the locus of power in democratic societies, a space still too monarchically occupied today, even if it is only because of the nostalgia for hierarchies, personified leaderships, foundational moments, retained sovereignties or aspirations to ensure Kompetenz-Kompetenz (i.e., the ability of a tribunal to rule on the question whether it has juridiction). In the EU, there is no central power that must be conquered in a competition between political parties, and policies are not determined by a majoritarian government, but by negotiations between the Council, Parliament, and the Commission. In this context, the language of state democratic politics—government and opposition, competition among parties, responsibility to voters—would be completely unintelligible (Majone 2009, 33). Republican-inspired constitutional pluralism can help us understand the institutional equilibrium of the EU, the coexistence of communitarian law and state constitutions and international law in a nonhierarchical fashion (Zetterquist 2012). We could say it is better to replace constitutional metaphysics with pragmatic metaphysics. Constitutional practice can be more truthful than the traditional hierarchical model (Halberstam 2012, 86). Constitutional pluralists like Kumm and Maduro take this idea to the point of believing that the question of an ultimate constitutional authority remains open in EU law (Kumm 2002; Maduro 2003 and 2012). From this point of view, the “heterarchy”—understood as the network of elements in which each one maintains the same horizontal position of power and authority—is considered superior to the hierarchy as a normative ideal in circumstances of competing constitutional claims. Against the classic idea of “supremacy,” we must now think about the relationship between legal systems in a pluralist, rather than monist, mode, interactive rather than hierarchical (MacCormick 1995, 265), which means

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moving toward a more modest and constrained conception of primacy, as was suggested, for example, by the Spanish constitutional court in its ruling against the Constitutional Treaty (DTC 1/2004). There is a long discussion about how communitarian law’s principle of supremacy should be understood or, conversely, how limits to the state delegation of sovereignty should be ensured. For some people, this means that “there is no nucleus of sovereignty that Member States can invoke, as such, against the Community” (Lenaerts 1990, 220), which would always keep an argument of subordination or a Kompetenz-Kompetenz in reserve. In recent years, this conditioning has become more settled, which we can see clearly, in the first place, in certain rulings of the states’ constitutional courts. It is also true that this holding back would not in any case be rigid but a “resistance norm” that would function as a “soft limit” (Young 2000, 1594). It is not certain that the constitutional courts have adopted a position contrary to the idea of the primacy of communitarian law. Generally, they have adopted an intermediate position, trying to afford the best comprehension of rival principles that are in play (Kumm 2005). Another recent example of the national conditioning of European politics is the recent introduction of national parliaments into European governance with the Treaty of Lisbon. We should not interpret this aspiration as the attempt to return to a Europe controlled by the states; it is better to understand it as the rejection of the conception of “an autonomous and hierarchical legal order,” but not as a repositioning of a hierarchical relationship of another kind (Maduro 1998, 8). As can be verified, the question of ultimate sovereignty is not presentable in the EU in its traditional format, with hierarchical security, but through a series of reservations that make it “weak” or contested, in other words, not very sovereign. Therefore, from the perspective of constitutional pluralism, communitarian primacy does not establish a type of suprastate sovereignty, but only regulates the interaction between the levels that constitute the institutional framework of the European Union. In any case, we can say that either the EU has not found a solution to the question about who has the competence to determine to whom competence corresponds (Schilling 1996; Weiler and Haltern 1996) or else it has stopped considering it relevant. This would be its principal innovation: the possibility of constituting a political community by setting this question aside. Let us examine the matter anew, from a practical perspective. The EU’s peculiar structure—its complex rounds of decision making and implementation—is what makes the power appear weak and indecisive. Without a doubt, there are many aspects of it that can be improved, but we cannot lose sight of the fact that when the formal instruments of power are weak, ensuring agreement is an essential part of their decision making. As I have tried to show previously, it may be that we are judging the political quality of the European Union based on categories that come

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from the nation-state, and we classify its peculiar form of governance as weak because we are too accustomed to perceiving any example of shared or semisovereign decision making in that way. Good proof of this is the fact that the emphasis on state monopoly of violence underestimates the effectiveness of noncoercive procedures of governance (Mitchell 1996; Zürn 2005). We can find in the European complex a manifestation of this “decentering of democracies” with which Rosanvallon (2008) indicates the pluralization of ancient popular will—personified in the king or represented in parliament, ritualized in the moment of elections—toward a deconcentration of sovereignty that is diversified in moments, instances, levels and functions. Again, the consolidation of European democracy should not be considered with the pathos from which nation-states emerged, which visualized the sovereign people without divisions; our objective would focus more on the less heroic task of guaranteeing the level of complexity and the political culture of limitation, mutualization, and cooperation between diverse levels and actors. Functional Differentiation and Territoriality As Luhmann noted, the peculiarity of the European Union and its evolution should be explained by virtue of its relationship with the environment, rather than appealing to the memory of historical events (Luhmann 1994). In this sense, its more radical definition would understand it as an answer to the progressive replacement of territoriality for the functional differentiation that characterizes the contemporary world. The process of integration is the answer to a series of very profound social changes that are summarized in the fact that territorial forms of differentiation are being progressively replaced by functionally differentiated structures. The EU must be understood as a transformative structure that has played a central role in the process of reducing the territorial forms of the nation-state, not as a reaction to this evolution. What does this evolution entail? We can track it through its political effects. Territorial forms have been a stabilizing element since early modernity, but they increasingly act more as a limitation for the type of operations we would like to realize. Today, territorial structures of the organization of power are not capable of confronting certain dynamics that have very little to do with territoriality. Many of the current world’s problems with ungovernability are due to contrasts between functional systems of law and politics, which still typically display a strong territorial implication, and other systems like the economy, the environment, communications or science that have a weak relationship with physical spaces. This is the context in which the EU is developing structures of governance that try to overcome the discrepancy between social forces that have pushed Europeanization and an underdeveloped institutional

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structure that is incapable of managing the demands with which it is presented. In this sense, it is worth noting that the EU, through supranational politics, represents the attempt to recuperate the uneven expansion of functional subsystems for politics (Jachtenfuchs and Kohler-Koch 1996). In any case, it would be a categorical error to limit ourselves to conceiving of the EU as a mere reproduction of the state on a larger scale, thus ignoring its institutional innovation. This is the approach taken by Habermas, whose theoretical ambition on this issue is, in my judgment, minimal: he simply conceives of it as a polity that is attempting to protect the democratic legacy of the nation-states on the European level (Habermas 1998). This is equivalent to considering the EU as a replacement for the democracy of the nation-state, a mere extension of or a negative reaction to the undesirable side effects of globalization. But the role of the EU’s political system is distinct from the role carried out by states, precisely to the extent that it replaces territorial logic with functional logic. Decisions adopted within the state arena were oriented toward problems of a territorial nature, while EU decisions have as an end goal the reduction of negative externalities, asymmetries between the level of globalization of the different systems and the phenomena of contagion that emerge among functionally differentiated systems (principally between the economic system and other systems). In an interconnected world, and particularly in an integrated Europe, one’s decisions have ever more effects beyond their limits. The EU’s principal mandate is precisely to regulate the negative externalities that result from interdependence. If we take this task as the common theme of its legitimacy, we can see that the EU is neither promoting nor protecting us from globalization. It is a stabilizing hybrid structure that would make legal regulation possible, as well as the adoption of decisions in accordance with the realities of a progressively global world of disaggregated spaces. Therefore, instead of considering the EU as a sui generis entity, it might be more appropriate to understand it as a new solution for an old problem (Lindseth 1999, 630). In this sense, we see it is nothing but the configuration of a complex democracy in social and political contexts that are very different from the context in which our current democratic systems were created. 4. WHO GUARANTEES DEMOCRACY IN THE EU? For some years now, there has been increased resistance to recognizing any democratic or constitutional originality in European governance beyond the mere national “delegation.” Certain constitutional courts, when it comes to reviewing the constitutionality of the agreements in the last decade of the twentieth century and the first decade of the twenty-first,

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have claimed maximum authority for themselves when it comes to delimiting transfers of sovereignty toward the European Union (especially in Germany, Denmark and the Czech Republic). There are those who soften this claim by affirming that it is presented once they have declared their decision in favour of European integration (Lindseth 2010, 135). The problem is whether this profession of faith in Europe is compatible with a reservation that contradicts it conceptually and in practice. The theme is once again presenting itself with all its historical significance in the German constitutional court’s current deliberations over whether the European Central Bank’s program of buying debt is in agreement with its constitution. It is clear that this debate is airing a question that is more crucial than the legality of this particular intervention. The deeper question is not whether these operations involve surreptitious debt pooling in such a way that German contributors would be paying other people’s debts; neither is it attempting to determine whether the specific rescue measures contradict the Treaty of Lisbon’s express prohibition (the famous “no bailout” clause that prevents financial coresponsibility) or whether the operations were sufficient given the exceptional nature of the crisis (Sester 2013). What is being determined in the end is the form of democracy that is appropriate for the European Union, whether we need to view it and configure it along the lines of the nationstate and who has legitimacy to guarantee that everything is being done according to democratic criteria. The precedents in this regard are not very encouraging. The German constitutional court, from its ruling on the Maastricht Treaty through its ruling on the Treaty of Lisbon, has been developing a doctrine that destabilizes the double legitimacy of the European Union in favour of the states. In these rulings, the judges propose national control over the process of integration to avoid any erosion of the German democratic system. The principle that sustains the ruling is that the nation-state is “the primary political realm in which community is achieved” (BVerfG, Fn. 301). This doctrine has been expanding, and there are similar rulings on the part of Poland, the Czech Republic, Portugal and Estonia. This approach is conceptually mistaken, but it is also mistaken from a normative and practical point of view. It does not sufficiently understand the evolution of the context in which democratic ideals are developed today, it is not consistent with the values that should rule relationships between political actors and it puts into motion a dynamic that ends up being unsustainable. In the first place, arguing in this way means, in the conceptual arena, enthroning democracy that has been configured around nation-states as the only possible or the exemplary form of democratic cohabitation, but it does not offer any indication about how we should think about the transformations of democracy from the moment in which the states replace or complement their sovereign autarchy with integrative techniques. Even

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while recognizing that the German constitution is open to integration, the constitutional court considers self-determination in the exclusive context of sovereign statehood; it believes national democracy to be the standard of assessment for the democraticity of the European Union. This implies a descriptive intention, the stating of a fact, but also, indirectly, a performative assessment: there cannot be any democracy beyond the realm of the state. In the end, the judges are implying that there can only be democracy with a national demos, which is far from being self-evident. They presuppose that democracy is only possible under the model of a parliamentary democracy associated with a sovereign nation-state and that only in the national space do we achieve the type of confidence and solidarity that are required to sustain a democratic polity. We must abandon the idea that democracy should involve the same requirements on all levels. It is not that there is more or less democracy on a local or transnational level but that there are different criteria for assessing democraticity depending on the institutional level at which we find ourselves. “The issue about Europe ought not then to be whether it is totally or completely democratic, but whether it is adequately so given the kind of entity we take it to be” (MacCormick 1997, 345). Either we think about democratic demands in accordance with the specificity of the European Union, or we will transfer categories incorrectly from one level to a level at which they are not applicable without a profound transformation. From the normative and practical point of view, the German constitutional court’s demands are contradictory since, on the one hand, their perspective is too internal, while on the other, they condition the European process too much. This contradiction stems from the fact that “the German Court presents itself as a guarantor of the universal values of democracy rather than as a guarantor of German particularism” (Weiler 1995, 222). In its ruling on the Maastricht Treaty, it is established that foreign sovereign agents cannot claim superior validity to the democratically legitimated (in other words, nationally legitimated) law, but as Joerges argues: What if we turn the argument around? We would then have the principle that constitutional states cannot unilaterally impose burdens on their neighbours (Joerges 1996). By assuming the function of controlling the democraticity of this new reality that is configured in the process of integration, Germany presents unilateral demands on its European colleagues, demands that are formulated as if there were a perspective that would allow Germany to consider itself—even if only at the moment of judging constitutionality—outside of the European Union. Let us imagine the cascade effect and the resulting obstruction to the functioning of common institutions, since all the states would feel the same obligation to attest to and condition the democraticity of communitarian decisions (Zürn 2010, 51). The European Union is inconceivable and ungovernable as a juxtaposition of sovereignties.

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The rulings seem to also ignore what practical necessities respond to integration, what possibilities integration has created and the extent to which Germany—like the other member states—depends upon the European space of action. It gives the impression that we are facing a zerosum game between different legitimacies, as if there had not been an increase in spaces and possibilities of action for all the states because of transnational integration. The German constitutional court presents, in short, the question of democracy in a unilateral fashion in favour of national control, while it ignores the other side of the coin: that the existence of institutions capable of acting beyond the nation-state matches democratic necessity. Many of the tasks assigned to the constitutional state cannot be realized except in a transnational fashion. No state alone can guarantee on the European level the domestic market, free competition, monetary stability, financial regulation or the protection of the environment. The institutions we have designed to guarantee these common European goods should not be understood as a hetero-determination but as instruments of expanded self-determination, for a realm of action that states cannot achieve, on their own or through mere aggregation. The future of the EU depends on how we resolve the question of adequate spatial measurements for socially relevant policies. The process of integration has given member states some spaces of action which evaded them or which they would not have reached on their own. These spaces are not mere supplements or prostheses that are given to “complete” states, leaving their constitutionality intact and viewing the institutions as “agents of member states,” as Lindseth, for example, suggests (2010, 227). There is often an excessively “hydraulic” idea of the system by which states recuperate on the European level that which they cannot provide on the national level. The conception according to which European integration would be a tension between national self-government and the functional delegation at the European level is too static. In the political theory of European integration, there is a lot of compensatory functionalism (the European Union as the corrector of state incapability) and little theorization about its nascent and transformative side. It is true that understanding European governance as a corrective for functional limitations of member states protects us from the error of interpreting it as a mere successor of the states, but it also prevents us from realizing its innovative significance. That is why the construction of rights and responsibilities of the arenas generated by integration cannot be carried out by the vigilance of their constitutional courts. What sense does it make to leave the determination of the democraticity of European integration in hands of a state (or all the states) that has accepted the idea of integration precisely because it recognizes that it is not capable of ensuring the supply of certain democratic goods to its citizens on its own? Future development of democracy

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in the European Union cannot be guaranteed by allowing one of its member states to control constitutionality, not even from the space of intergovernmentality constituted by all the states in their function as “guarantors of treaties.” Are we confronting the option of understanding the discrepancy between the European Court of Justice and the national courts as a “pluralist dialogue in which there is no praetor” (Beck 2005) or as the states’ warning about the inescapable limits of its delegation (Lindseth 2010)? My answer to this dilemma is that, since the European Union’s nature is as a complex and composed polity, its democraticity must be viewed in an original manner in the balance between what is intergovernmental and transnational. This balance should now be reclaimed with greater emphasis on common institutions. It is possibly a bit exaggerated to think that the attempt to ensure Kompetenz-Kompetenz matches a conception of democracy based on Carl Schmitt (Weiler 1995, 222), but it certainly does not seem to sufficiently recall the recent transformations of democratic politics, especially in areas of special interdependence, such as Europe. These transformations are demanding that we elaborate a postsovereign idea of the control of constitutionality, of communitarian interest, and of democratic legitimacy. Instead of conceiving of sovereignty as state property, we should view it as an ability for political action, and therefore, a pragmatic problem. We must replace the question of state or interstate sovereignty with “the real possibilities of human self-determination” (Neumann 1980, 57). If we were capable of thinking and acting beyond the idea of sovereignty as an originary possession, beyond the search for foundations, then sovereignty, instead of being viewed as a state attribute, would begin to reference a property of the people in their collective state, their capacity for concerted action. It would not only be a question of protecting spaces of individual autonomy (as it tends to be understood from a liberal perspective), but of designing institutions from the perspective of a republic in order to create spaces of influence where state politics often bumped up against the limits of their power. Member states acquire power in exchange for sovereignty, they give up the ability to act in favour of a frequently empty title. No matter how paradoxical it may seem, popular sovereignty is only realizable within a horizon of shared sovereignty, where what makes the exercise of power possible limits it at the same time. The question is not, then, to determine who holds sovereignty and to take part in the debate confronting state sovereignists against federal sovereignists (who tend to be in agreement on the traditional framework of the argument and only differ in the question of where sovereignty resides). The much more relevant question is to determine whether the European Union does or does not constitute an adequate framework to achieve certain objectives of political configuration that the people have the right to expect. European integration is precisely a consequence of the

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confirmation that state frameworks are often insufficient for the provision and securing of certain public goods. If it is true that the fragmentation of normative power has given way to a complex regulatory system within the states, in such a way that no singular institution can “control” the totality of political processes (Lindseth 2012, 23), this fragmentation is even more open in the case of the EU. This has negative consequences (deadlock regarding residual sovereignty in the constitutional courts) and positive ones (the states’ willingness to consider the effects of its decisions on other states and, therefore, to not claim control over the democraticity of the European Union). The structure of Europe should respect the political peculiarity of the European Union, its logic, institutional novelty and complexity. Europe cannot be reduced to simple alternatives: states or integration, the supranational against the intergovernmental, what is common or what is individual. But there is no doubt that responding adequately to the current challenges requires granting greater protagonism to common institutions of deliberation rather than institutions of aggregation. CONCLUSION: THE EUROPEAN UNION AS A COMPLEX DEMOCRACY According to the Maastricht Treaty, the European Union rests on the principles of democracy and refers to democratic structures in the operation of its member states, from which it receives a good deal, but not all, of its democratic legitimacy. Moreover, over the course of integration, the necessity of incrementing its own mechanisms of democratic legitimation has increased. It is frequently noted that this self-legitimation is deficient, and I personally share this appraisal. I only note this point of view because not every democratic deficit is attributable to the EU; some respond to disproportionate expectations regarding its functioning or poor comprehension of its complexity, largely because it is compared to the measuring stick of the nation-state. In discussions about democracy in Europe, there is frequently more criticism than analysis, much normativity with scant reflection about conditions of possibility. Many of the problems regarding legitimate governance in the EU are not due to an inadequate application of democratic principles but to an insufficient conceptualization of the complexity of the arena in which that transnational democracy must be achieved. For that reason, I must conclude by affirming that the best way to overcome these deficiencies is to reformulate the democratic ideal itself, not in order to weaken demands in response to current difficulties, but to present the democratic ideal in a manner that is compatible with the complexity of the European project. For the first time in history, we are facing the project of establishing a complex democracy, a democracy that is not coercive or based on a

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homogeneous people. The interest in European integration, from a philosophical-political perspective, stems from the fact that reflections about the EU’s nature, institutions and forms of government can contribute to the conceptualization of a complex democracy. “Complexity” is not only a negative designation; it can represent greater richness or the presence of more agents in the political field given the very opening up of democracy. It is obvious that this complexity has nothing to do with its character as a “baroque entity” (Fossum and Menéndez 2011, 4). Complexity does not mean the accumulation of institutions of distinct and even conflicting ideological nuances, as is largely the case right now (a European Court in the French style, a central bank based on the German model, an open method of coordination imported from the culture of new public management, which is dominant in Great Britain and the Scandinavian countries, etc.). It means balance and tension among various parts of democracy, which focus on levels and criteria whose harmonization is a condition of possibility for the development of a true democratic culture. We seem to be achieving confusion, rather than complexity, and our oscillation between criteria of national democracy (majority procedures, the strengthening of parliament, more direct representation) and uses of intergovernmental negotiation (the growing role of the Council) reveals that we need a new concept of democracy that is applicable to European complexity. In a banal sense, the complexity of the European Union is that of a decision-making body that must accommodate a great variety of interests, institutional realities and cultural orientations. But in a more radical sense, the complexity stems from the dynamic character of the EU, which a static vision of political realities will struggle to express. Almost all the difficulties of understanding and governing the European Union have to do with the fact that we are not facing fulfilled realities, but processes that have great dynamism and whose final result we do not know: fundamentally these are all things that could turn self-sufficient realities into something in common. In any case, we would be committing a profound error if we were to suggest that this process necessarily tends to bring disperse elements together. I have noted that the final result of these dynamics is unknown to us because there is no conclusion in which all the principles and experiences that intervene in the process of integration can be harmoniously reconciled. There are realities that will only be integrated polemically, in the midst of difficultly reconcilable interests, where power relationships do not magically disappear, which will require political decisions, in other words, choosing in such a way that someone or something will not be attended in the way they believe they deserve. The necessary politicization of the EU does not focus as much on organizational procedures to make the communitarian scale worthwhile (political parties that represent Europe as a whole or more direct elec-

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tions). What is more important is being able to place the decisions that have a certain tragic dimension into context so they are intelligible and acceptable to those who have the most to lose. BIBLIOGRAPHY Abromeit, Heidrun. 1998. “Ein Vorschlag zur Demokratisierung des Europäischen Entscheidungssystems.” Politische Vierteljahresschrift 39/1: 80–90. Beck, Gunnar. 2005. “The Problem of Kompetenz-Kompetenz: A Conflict between Right and Right in which There Is No Praetor.” European Law Review 30/1: 42–67. Beck, Ulrich, and Edgar Grande. 2004. Das kosmopolitische Europa. Frankfurt: Suhrkamp. Benz, Arthur. 1998. “Ansatzpunkte für ein europafähigen Demokratiekonzept.” In Regieren in entgrentzten Räumen, edited by Beate Kohler-Koch. Opladen: Leske and Budrich: 345–67. ———. 2003. “Compounded Representation in EU Multilevel Governance.” In Linking EU and National Governance, edited by Beate Kohler-Koch. Oxford: Oxford University Press: 81–110. Diez, Thomas. 1996. “Postmoderne und europäische Integration. Die Dominanz des Staatsmodells, die Verantwortung degenüber dem Anderen und die Konstruktion eines alternativen Horizonts.” Zeitschrift für Internationale Beziehungen 3/2: 255–81, 256. Fossum, John Erik, and Agustín José Menéndez. 2011. The Constitution’s Gift. A Constitutional Theory for a Democratic European Union. Plymouth, UK: Rowman & Littlefield. Franzius, Claudio, and Ulrich K. Jauss. 2012. Die Zukunft der Europäische Demokratie. Baden-Baden, Germany: Nomos. Habermas, Jürgen. 1998. Die Postnationale Konstellation. Frankfurt: Suhrkamp. Halberstam, Daniel. 2012. “Systems and Institutional Pluralism.” In Constitutional Pluralism in the European Union and Beyond, edited by Matej Avbelj and Jan Komárek. Oxford: Hart: 85–125. Höreth, Marcus. 1998. “The Trilemma of Legitimacy—Multilevel Governance in the EU and the Problem of Democracy.” ZEI Discussion Paper C11. Accessed 6 March 2014. http://aei.pitt.edu/340/. Hürrelmann, Achim. 2007. “Multilevel Legitimacy: Conceptualizing Legitimacy. Relationships between the EU and National Democracies.” In Democratic Dilemmas of Multilevel Governance: Legitimacy, Representation and Accountability in the European Union, edited by Joan DeBardeleben and Achim Hurrelmann. New York: Palgrave Macmillan: 17–37. Innerarity, Daniel. 2012. The Future and its Enemies: In Defense of Political Hope. Translated by Sandra Kingery. Stanford, CA: Stanford University Press. Jachtenfuchs, Markus, and Beate Kohler-Koch. 1996. “Regieren in dynamischen Mehebenensystem.” In Europäische Integration, edited by Markus Jachtenfuchs and Beate Kohler-Koch. Opladen, Germany: Leske+Budrich: 15–45. Joerges, Christian. 1996. “Taking the Law Seriously: On Political Science and the Role of Law in the Process of European Integration.” European Law Journal 2/2: 105–15. Kumm, Mattias. 2002. “The Idea of Constitutional Pluralism.” Modern Law Review 65: 317–59. ———. 2005. “The Jurisprudence of Constitutional Conflict: Supremacy before and after the Constitutional Treaty.” European Law Journal 11/3: 262–307. ———. 2011. “How does EU Law Fit into Public Law?” In Political Theory of the European Union, edited by Jürgen Neyer and Antjie Wiener. Oxford: Oxford University Press: 111–38.

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Leca, Jean. 2009. “The Empire Strikes Back! An Uncanny View of the European Union: Part I—Do We Need a Theory of the European Union?” Government and Opposition 44: 285–94. Lenaerts, Koen. 1990. “Constitutionalism and the Many Faces of Federalism.” American Journal of Comparative Law 38: 205–63. Lindseth, Peter L. 1999. “Democratic Legitimacy and the Administrative Character of Supranationalism: The Example of the European Community.” Columbia Law Review 99/3: 628–738. ———. 2010. Power and Legitimacy: Reconciling Europe and the Nation-State. Oxford: Oxford University Press. Lord, Christopher, and Paul Magnette. 2004. “E Pluribus Unum? Creative Disagreement about Legitimacy in the EU.” Journal of Common Market Studies 42/1: 183–202. Lord, Christopher, and Johannes Pollak. 2010. “The EU’s Many Representative Modes: Colluding? Cohering? “ Journal of European Public Policy 17/1: 117–36. Lübbe-Wolff, Gertrude. 2010. “Europäisches und nationales Verfassungsrecht.” Veröffentlichungen der Deutschen Staatsrechtslehrer 60: 246–89. Ludlow, Peter. 2005. The Leadership in an Enlarged European Union: The European Council, the Presidency and the Commission. Brussels: EuroComment. Luhmann, Niklas. 1994. “Europa als Problem des Weltgesellschaft.” Berliner Debate 3. ———. 1997. Die Gesellschaft der Gesellschaft. Frankfurt: Suhrkamp. MacCormick, Neil. 1995. “The Maastricht Urteil: Sovereignty Now.” European Law Journal 1/3: 259–65. ———. 1997. “Democracy, Subsidiarity, and Citizenship in the ‘European Commonwealth.’” Law and Philosophy 16/4: 331–56. Maduro, Miguel P. 1998. We the Court: The European Court of Justice and the European Economic Constitution. Oxford: Hart. ———. 2003. “Contrapunctual Law: Europe’s Constitutional Pluralism in Action.” In Sovereignty in Transition: Essays in European Law, edited by Neil Walker. Oxford: Hart: 3–32. ———. 2012. “Three Claims of Constitutional Pluralism.” In Constitutional Pluralism in the European Union and Beyond, edited by Matej Avbelj and Jan Komárek. Oxford: Hart: 67–84. Majone, Giandomenico. 2005. Dilemmas of European Integration: The Ambiguities and Pitfalls of Integration by Stealth. Oxford: Oxford University Press. ——— . 2009. Europe as the Would-be World Power. Cambridge: Cambridge University Press. Middelaar, Luuk van. 2012. Le passage à l’Europe. Histoire d’un commencement. Paris: Gallimard. Mitchell, Ronald B. 1996. “Compliance Theory: An Overview.” In Improving Compliance with International Environmental Law, edited by Jacob Cameron, James Werksman and Peter Roderick. London: Earthscan. Neumann, Franz. 1980. Die Herrschaft des Gesetzes. Frankfurt: Suhrkamp. ———. 2010. “Das Bundesverfassungsgericht und die Politisierung der EU.” In Strukturfragen der Europäischen Union, edited by Claudio Franzius, Franz C. Mayer and Jürgen Neyer. Baden-Baden, Germany: Nomos: 46–55. Neyer, Jürgen. 2003. “Discourse and Order in the EU.” Journal of Common Market Studies 41/4: 687–706. Nicolaïdis, Kalypso. 2003. “Our European Demoi-cracy: Is this Constitution a Third Way for Europe?” In Whose Europe? National Models and the Constitution of the European Union, edited by Kalypso Nicolaïdis and S. Weatherill, Oxford University Press: 137–152. ———. 2012. “The Idea of European Demoicracy.” In Philosophical Foundations of EU Law, edited by J. Dickson and P. Eleftheriadis, Oxford University Press: 247–275. Risse-Kappen, Thomas. 1996. “Exploring the Nature of the Beast: International Relations Theory and Comparative Policy Analysis Meet the European Union.” Journal of Common Market Studies 34/1: 53–80.

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Rosanvallon, Pierre. 2008. La Légitimité démocratique. Impartialité, réflexivité, proximité. Paris: Éditions du Seuil. Schilling, Theodor. 1996. “The Autonomy of the Community Legal Order.” Harvard International Law Journal 37/2: 389–410. Schmitter, Philippe. 2001. “What Is There to Legitimise in the European Union?” Jean Monnet Working Paper 6/01, Symposium: Responses to the European Commission’s White Paper on Governance. Harvard. Schütze, Robert. 2012. “Federalism as Constitutional Pluralism: ‘Letter from America.’” In Constitutional Pluralism in the European Union and Beyond, edited by Matej Avbelj and Jan Komárek. Oxford: Hart: 185–211. Schwengel, Hermann. 1999. Globalisierung mit europäischem Gesicht. Der Kampf um die politische Form der Zukunft. Berlin: Aufbau. Sester, Peter. 2013. “Status und Zukunft der Währungsunion.” In Europa als Rechtsgemeinschaft—Währungsunion und Schuldenkrise, edited by Thomas Möllers and FranzChristoph Zeitler. Tübingen: Mohr: 175–200. Shaw, Jo, and Antje Wiener. 1998. “The Paradox of the ‘European Polity.’” In State of the European Union 5: Risks, Reforms, Resistance, and Revival, edited by Maria G. Cowles and Michael Smith. Oxford: Oxford University Press. Tully, James. 2008. Public Philosophy in a New Key, Vol. II. Oxford: Oxford University Press. Wallace, Helen. 1994. “Theory and Practice in European Integration.” In Economic and Political Integration in Europe: Internal Dynamics and Global Context, edited by Simon Bulmer and Andrew Scott. Oxford: Wiley-Blackwell. Weiler, Joseph H. H. 1995. “Does Europe Need a Constitution? Demos, Telos and the German Maastricht Decision.” European Law Journal 1/3: 282–302. ———. 1999. The Constitution of Europe. Cambridge: Cambridge University Press. Weiler, Joseph H. H., and Ulrich R. Haltern. 1996. “The Autonomy of the Community Legal Order—Through the Looking Glass.” Harvard International Law Journal 37/2: 411–48. Wiener, Antje. 2008. The Invisible Constitution of Politics. Cambridge: Cambridge University Press. Wiesner, Claudia, Kari Palonen, and Tapani Turkka, eds. 2011. Parliament and Europe: Rhetorical and Conceptual Studies on Their Contemporary Connections. Baden-Baden: Nomos. Young, Ernest. 2000. “Constitutional Avoidance, Resistance Norms, and the Preservation of Judicial Review.” Texas Law Review 78: 1549–1614. Zetterquist, Ola. 2012. “Out with the New, in with the Old—Neo-Roman Constitutional Thought and the Enigma of Constitutional Pluralism in the EU.” In Constitutional Pluralism in the European Union and Beyond, edited by Matej Avbelj and Jan Komárek. Oxford: Hart: 213–29. Zürn, Michael. 2005. “Law and Compliance at Different Levels.” In Law and Governance in Postnational Europe. Compliance Beyond the Nation-State, edited by Michael Zürn and Christian Joerges. Cambridge: Cambridge University Press.

TEN Populist Movements and the European Union Serge Champeau

It seems to me there are two ways of understanding the title of our conference: “After the euro crisis.” The first meaning is simply that, thanks to the joint action of various European institutions, we have apparently now left behind some of the tensions that put the existence of the single currency in danger. But the second meaning invites us to get beyond the very concept of the “euro crisis.” Because what we witnessed and will witness again, beyond the monetary component, seems to belong to a broader crisis, the crisis of governance within the European Union. Some of the manifestations of this, which were visible before the euro crisis, have not disappeared with monetary stabilization (I am thinking, particularly, about foreign policy and security policy, or energy and environmental policies). This crisis of European governance has gradually become, as we can all see, a political crisis, with an increase in Euroscepticism and Euro-phobia in almost all the European countries. The best proof we have that what the European Union experienced was not essentially a “euro crisis” in the strict sense of the term is that the relative stability of the currency at present did not in any way mitigate Euroscepticism. In this chapter, I will argue that this political crisis is profound, that it threatens the European Union and that the populist movements that are developing throughout Europe must be interpreted as authentically political phenomena that do not stem from a democratic deficit but an executive deficit whose relationships with the democratic deficit, alongside the lack of politicization of European institutions, are indirect and complex. 195

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Among European leaders and, more broadly, in pro–European Union public opinion, there are two dominant descriptions of the peak of populist movements in the Union and of the Euro-scepticism that constitutes one of its essential aspects. These descriptions strike me as inadequate, as are the responses that are proposed to counteract populism. I will first clarify and justify this affirmation, and then I will propose an interpretation for these inadequate descriptions of populism and for the executive deficit that generates it, basing my argument on two concepts that I take from Reinhold Niebuhr: moral idealism and political realism. 1. A POLITICAL INTERPRETATION OF POPULISM The two prevailing definitions and interpretations are as follows: In the first, populism is when demagogues exploit people’s lack of understanding. The people are fundamentally irrational, emotional and completely befuddled by the complexity of European Union politics. It is worth noting that the rather recent emergence of the term populism, alongside or in place of the older demagogy, is linked to this interpretation. This term places the source of the demagogy in the people, limiting demagogues to responding to popular needs with simplistic slogans, symbols and emotions. The solution for that type of interpretation is easy: we must refute the demagogues and heighten communication and pedagogy. The second interpretation claims that populist reactions and their exploitation by demagogues are fostered by inadequate solutions offered by European politics. From this perspective, this type of inadequacy is often understood as a legitimacy deficit. The solution in this case would be simple as well, although more difficult to apply than the previous one: the European Union must be further democratized. More extensive participation by the people when decisions are being formulated should improve decisions and reinforce their legitimacy. These two interpretations and their solutions seem debatable to me. The first is a barely updated representation of technocratic paternalism, and we all know that refuting demagogic simplifications and improving communications and pedagogy have never produced convincing effects. The second interpretation presumes that citizens associate what they perceive as inadequate results with the excessively undemocratic nature of the decision-making process, but empirical studies of European public opinion do not confirm this view (see appendix, point 1). As for the solution this interpretation advocates to combat the legitimacy deficit, it runs the risk of reinforcing what numerous analysts already confirm: the Union’s chaotic troubleshooting in search of democratic guarantees of all kinds (e.g., increasing the powers of the European Parliament; conferring a more important role on national governments through the European

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Council; connecting national parliaments to the decision-making process and to the work of the European Parliament; applying the popular initiative of the Treaty of Lisbon, etc.). This is a group of measures that, until now, have not had much impact on public opinion and could even end up being counterproductive. S. Goulard and M. Monti, in a recent book on the European Union, write in this regard that the Union “wants everything” and that we must have “the courage of our convictions to say that this fragmented democratic activity does not measure up to what is in play” (2012, 787; see also Pech 2012). A third interpretation of populism strikes me as more convincing. In it, populism is a truly political 1 phenomenon that need not be interpreted as a manifestation of citizen ignorance or mistrust of representative democracy and a demand for direct or participatory democracy. In a recent book, French philosopher Vincent Coussedière interpreted it not as a will to govern but as a demand to be governed according to the common good. Coussedière does not hesitate to write that populist phenomena give evidence of “the political maturity of a people who know the unavoidable character of representation,” realizing that “the people as a whole are citizens whose task is not to govern others,” but who “find they must dedicate themselves to politics, in other words, to occupy a place that does not belong to them” (2012, 21, 73). This seems to be contradicted by the fact that the central theme of populist movements is the criticism of political and cultural elites and of all the institutions of representative democracy. 2 But it is precisely a question of knowing how to interpret this topic, in the diverse forms in which it is expressed (in favour of the movements of the extreme right, the extreme left, or protest movements; support for citizens movements that are not politically structured; etc.) and knowing whether populism can be confused with demagogy. Numerous empirical studies show that the majority of those who vote for demagogic parties come nowhere close to sharing all their ideas, and the ideas themselves are often changing and contradictory. 3 It is not obvious, in particular, that the voters and citizens who support these parties and movements reject representative democracy. Criticism of the elites could imply a rejection of representation (in favour of direct or participative democracy or of charismatic leaders), but it could also denote a demand for better representation (see appendix, points 1, 2 and 3). Regarding the European Union, the two criticisms that most often appear in the polls are very well known: public opinion is not demanding a different democracy or a more democratic government as much as more coherent and effective European institutions (in other words, institutions that are capable of guaranteeing fundamental rights, security and prosperity, and more specifically, offering protection against the effects of opening Europe to the world). The European Union is often, for many citizens, synonymous with rivalry and powerlessness. Christopher Bickerton summarizes this view in his analysis of the

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European Union’s international policies: the Union’s “foreign policy cooperation is oriented as much towards the balancing of the positions of different actors within the Union as it is to securing outcomes in theatres across the world.” For this reason, the European Union too often becomes an “introspective power.” 4 This third interpretation suggests that demands that stem from the people are more political than is suggested by the first interpretation, 5 but more conservative than believed by the second, insofar as it presupposes a conception of politics that originates in the nation-state, a conception that it projects onto the European Union and that leads it to view its structure and its policies as inadequate (in part or in whole) and, in the end, as a danger to the nation-state. But it is obvious that this type of political demand confronts two objections these days. (1) It is not certain that European politics can avoid the complexities, slowness and compromises inherent to federal states, and even more to a nearly federal entity. One can take seriously the populist demand for coherence while recognizing that it is founded on a decision-making model that originates in the nation-states and is also largely idealized. This is obvious in the political speeches that articulate populist demand when they affirm that the European Union will never manage to achieve this model (according to the right) and should strive to do so (according to the left). (2) It is not clear that a political body such as the European Union can be effective, particularly in the economic realm, in the way that the nation-states could be—although this has been largely idealized as well—or Europe could be in its beginnings, when its legitimacy rested on results manifested in questions of peace and economic reconstruction. Asking the European Union to try to end massive unemployment is, without a doubt, a sensible demand, because the Union has true power over monetary matters, regarding stabilization and regulation of the financial system and the coordination of fiscal policy and competitiveness between different states. But it may become an illusory demand: on the one hand, because numerous economic problems still depend on decisions that are also made on the national level (debt reduction, structural reforms) meaning that, in the governance of a group of states such as Europe, one would await a single institution’s solution in vain; on the other hand, because Europe is now open to a world it no longer dominates and this opening demands a politics of anticipation and quick response that differs from that other type of politics, the headstrong, constructivist politics that achieves more predictable results, the politics of the nation-states of the past or of the early years of the European Union, in a context that was either less open or colonial. These objections directed at populist demand are powerful. However, they do not seem determinant. The focalization of such demand on coherence and efficacy, which provoked the objections that I just mentioned,

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can, from another perspective, seem justified. It could constitute a realistic demand directed at European institutions and be proof of a consciousness of the limits the European Union has reached. The focalization of demand over effective results is not necessarily a sign of blindness in the face of the inevitable peculiarities of European Union decision making and the type of results that can be expected. The message that a large number of voters direct at European agencies can be understood in another way: “we are conscious of the peculiarities of the European Union, but this peculiarity can in no way justify incoherence and ineffectiveness; the Union must be encouraged to construct a type of coherence and effectiveness of its own.” It is clear, for example, that many citizens are conscious of the difficulty that the European Union confronts in its construction of a common foreign policy, but that does not make those same citizens accept European incoherencies and paralysis in this area, as in others, particularly in the field of energy policy and the creation of a common currency. They ask Europe, with trepidation and insisting on results, to live up to its ambitions and to its limits, to define a common position or, if it does not, to stop acting in these areas. 6 In other words, political theorists are not the only ones to notice that the European Union has not yet managed to overcome its internal contradictions, particularly between federation and confederation, and the results of that contradiction, among European elites and the people (Marquand 2012, 22). Citizens also, more frequently that we tend to think, perceive the paralyzing effects of the compromises between federation and confederation and between technocracy and democracy. 7 If we take Euro-scepticism seriously, in other words, if we do not let ourselves be affected by the extreme forms it can assume in the mouths of demagogic parties, it cannot be reduced to small-minded nationalism or a demand for democracy that follows the current model of the nationstates. On this point, numerous European citizens know they will never have, with the European Union, the affective relationship they have with their own state that conditions their national democratic life and national solidarity. They know the European Union is not and will never be a nation in the sense that French philosopher Ernest Renan gave the term: “a nation is therefore a large-scale solidarity, constituted by the feeling of the sacrifices that one has made in the past and of those that one is prepared to make in the future. It presupposes a past; it is summarized, however, in the present by a tangible fact, namely, consent, the clearly expressed desire to continue a common life” (1996, 41–55). This desire can be present in the European Union, but the previous factor, the consciousness of a common past that forges a “spiritual family” (which, for Renan, can include various languages, ethnicities and religions), which makes possible “great solidarity” and the sacrifices that this brings about, is undoubtedly not very active in the Europe of the twenty-eight. One can be conscious of all this, in other words, of the inherent limits of the

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European project both regarding the results that should be expected and the degree of democracy that can be accepted, while also pointing out to European institutions that the reality of the Union is often very removed from the conception of it (even regarding solidarity). What should we do if we are convinced that the construction of the European Union is the only possible solution, if we reject the illusion of retreating into the sovereignty of the nation-state? What can we do in the face of these populist phenomena—which I hope I have shown to be ambiguous but political—and for certain phenomena that are politically promising for the future of the European Union? (1) We must recognize, in the first place, that populist phenomena are normal in a democracy, particularly in an entity such as the European Union. We should stop reacting with alarm every time an extremist party or protest movement makes progress in an election and try to interpret the political demand they are expressing. Europe can withstand a more combative political environment. The Italian vote in favour of a clown, correctly interpreted, is not at all scandalous, no more so than the German middle class’s hostile reactions to the southern European countries. They simply reveal that the European Union is under construction, just as the nation-states were in the nineteenth and twentieth centuries. The difficulties of the nation-states generated broader populist movements that were exploited by totalitarian regimes. (2) We must rely, in the second place, on the political demands of these movements to attempt to give greater coherence, efficacy and visibility to European Union activities. No political entity, be it a nationstate, a federal state, a confederation or a construction sui generis like the European Union, can do without what French philosopher Michael Foessel calls, in line with phenomenological tradition, a “social world” or “cosmos.” By that he means a sufficiently stable spatial-temporal framework so that the most disadvantaged are not abandoned to their luck and to nostalgia or the messianic hope for a miraculous transformation of the world. In many aspects, the global economy represents for certain social categories, including, in times of crisis, for the middle classes, an “end of the world” that does not generate any activist position of transforming society (unlike what happened with other “end of the world” historical figures). That is why it is essential that the European Union does not further contribute, with its contradictions, to making doubt the dominant feeling of European citizens. People without a world, dispossessed of the expanse of the possible, of possible courses of action that this world could offer, end up considering reality “a process whose abolition they can desire or, alternatively, whose inexorable character they suffer” (2012, 4957–62). For this reason, we must take into account the populist complaint about the European Union, keeping in mind that “the most profound complaint does not demand another world, which would mean entrusting its hopes to unreality; it reclaims a world, in other words, an

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organization that both exists in reality and is compatible with the power of the individual” (2012, 3713–20). (3) We should, in the end, act without nurturing the dreams, in other words, without being ignorant of the limits of European construction. Mobilizing all the resources to obtain results should not make us forget that certain problems of the European Union do not originate in the action or inaction of European institutions, but in a modification of the world axis and, often, in the inappropriate reaction that national powers have to this change. That is why it is important to insist, in public debate, on the limits of the European Union’s effective power, and on the essential role of structural reforms in every country (the salvation of the Union will also come from each of the countries). These are both arguments that can be understood by the public if political leaders formulate them in a suitable fashion (see appendix, point 4). In other words, we must understand and take advantage of populist demands to neutralize their exploitation by demagogic and protest parties and movements. The limits to these demands are evident. Euro-scepticism, in its right-wing version, overestimates the power of the nationstates and, in the left-wing version, often tends to overestimate the power of the Union, when it demands “another Europe” or a “social Europe.” And it is obvious that the people, who demand coherence and effectiveness, are very far from reaching an agreement about the type of results they expect from the Union, although people everywhere would probably more easily accept compromises and concessions if they were coherent and effective. But those limits cannot conceal that it is an authentically political phenomenon. 2. THE EUROPEAN UNION, MORAL IDEALISM AND POLITICAL REALISM The thesis I am now going to defend is the following: shortcomings in the interpretation of populism are founded in the moral idealism of European institutions and of many defenders of the European Union, and many of the shortcomings of Union policies are founded in the same idealism. I take this concept from the great American philosopher, theologian and theorist of international relations, Reinhold Niebuhr. 8 For Niebuhr, one can talk about moral idealism (1) as long as a moral value (or an institution or an action that embodies that value) is raised absolutely because an agent underestimates the multiplicity of moral values and their contradictory nature and (2) as long as is underestimated the role of democratic politics, which is for him the only way of articulating, in an always provisional and imperfect manner, contradictory moral values. In other words, moral idealism exists when political realism is forgotten. 9

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Moral idealism, at the level of the European Union, seems to take diverse forms, the principal of which is the idealization of the European institutional framework and the results that it generates. I will offer just one example of this idealization: the mechanical opposition to the communitarian method and the intergovernmental method to denounce the supposed selfishness of the states, which seems to me a way of underestimating the political role of the “new intergovernmentalism.” 10 Universalizing the institutional framework, the values it embodies and the results it achieves is what leads us to believe that populist movements are alien to democracy and the European Union. We are led to interpret them exclusively as a parasitic phenomenon and a threat that must be neutralized or eliminated. Such universalizing means believing the European Union reached the balancing point, that its institutions and its functioning, which are both clearly perfectible, are globally satisfactory, that the difficulties and contradictions of its construction are momentary or exogenous (“the economic crisis”). Only this type of viewpoint can allow one to lose sight of the political significance of populism and the fact that it is consubstantial with democracy, and particularly with the European Union. One could have thought the opposite, because representative democracy was originally elitist (British parliamentarianism and American presidentialism) and, regarding the European Union, because its construction took place from top down, with only tacit agreement from the people—which was inevitable in the context of the time. But today’s European Union has also opened economically to the world and politically to different European peoples who debate its policies and institutions. To understand the sense in which populism, and the demagogic and totalitarian exploitation to which it can lead, are inherent to democracy, it may help to read the work of Hungarian philosopher Istvan Bibó. In his studies on the history of Germany and the central European countries, he highlights the fact that the people, when they experience what he calls a “historically traumatic situation,” can come to oppose nation and liberty, two values whose convergence and articulation are at the crux of the political construction of modern states since the eighteenth century (1993). This is how Bibó interprets the beginning of Nazism: after the defeat of 1918 and the Treaty of Versailles, the German people found themselves in a situation that led them to despair of any political democratic construction of the German nation, which led to a “magical cult of power” (1993, 72). Generalizing this analysis, Bibó affirms that “fascism begins brewing when, after a cataclysm or a delusion, the cause of the nation is dissociated from the cause of liberty” (1993, 111). The case is that everywhere, that is to say in all societies that are democratic or developing democracy: “no matter how paradoxical it may seem, fascism does not exist except where the masses are moved by democratic feelings.”

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“Fascism is the deformation of certain manifestations of the crisis of democratic evolution” (1993, 111–12). In an analogous fashion, it seems to me that the difficulties inherent to the construction of the European Union, in the new context of opening up to the world, lead some people today to renounce politics, opposing values of the nation and the European Union. However, this opposition runs the risk of again leading to the contrast between nation and freedom. Because the situation in which we find ourselves does not differ much from what Bibó described. In contrast to the opinion of the sovereignists for whom Europe is threatening the nation-states, the European Union has been an essential step in the construction of the sovereignty of the nationstates. After the Second World War, they could only recover their sovereignty and consolidate their democratic institutions, and the citizens could acquire new civil, social and political rights, by sharing sovereignty inside the Union. It would be an error to think that the European nationstates are completed and firmly anchored to their democratic institutions. No one can affirm that the exit of a state from the Union or the disintegration of the Union would necessarily lead to a return of the rule of law and democracy, but nothing guarantees that fundamental rights would remain outside of the framework of the Union either. Bibó’s analyses, applied to the European Union, still seem to be fully relevant: if contemporary populism is not considered an authentic political phenomenon, it threatens to open the way for demagogic, even totalitarian parties and movements. Since they oppose nation and Europe, these parties and movements will end up opposing nation and freedom, as the unsettling example of Hungary indicates. The difficulties of the political construction of the European Union are not, however, more exceptional and its consequences are not more inevitable than the difficulties that many peoples found in the construction of their nation-states. Bibó affirms that the victors in 1918 could have avoided Nazism and the Second World War if they would have helped the Germans construct a democratic nation instead of persisting in the moral stance of “making Germany pay.” In order to do so, they would have needed to interpret German nationalism in another way, as a politically ambiguous and potentially dangerous phenomenon and not a fundamentally antidemocratic phenomenon (an expression of a supposed essence of the German people or the inevitable evolution of capitalist domination). In an analogous fashion, it seems necessary to play down the phenomenon of contemporary populism—which does not mean hiding its dangers for the Union and for democracy—interpreting it as a politically normal phenomenon that can only emerge as a democratic entity in construction (profoundly original because of the fact of trying to reinforce the nation-states sharing their sovereignty)—and dedicating our efforts not to the destruction of this phenomenon but to the construc-

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tion of this democratic, postnationalist, although not postnational or poststate, entity. This idealization of the institutional framework of the Union and of the results it produces is inseparable from a refusal of politics by European institutions. David Marquand diagnosed the two forms of this refusal: on the one hand, suspicion of “impure” politics such as it is practiced on the national level and, on the other hand, suspicion about nations and ethnicities. 11 Both of them seem to me to be constitutive of the moral idealism of European institutions. That this has had a positive function in the construction phase of the European Union should not conceal the fact that the refusal of politics and the nation now nurtures populism throughout Europe. As long as the European Union idealizes its political framework, underestimating the importance of the voice of the people, it provokes incomprehension that it tries in vain to reduce with not very coherent or long-lasting compromises that end up generating political dissatisfaction and, finally, rejection. We have seen this proven with the creation of the Eurozone without the necessary guarantees, in a period of general optimism, or in the failed attempt at the constitutionalization of treaties, in an atmosphere of nearly Philadelphian enthusiasm. It is worth adding that populist reactions, whose demands for good government constitute a truly political demand, have a hard time overcoming, in the measures that they advocate, the framework of moral idealism. In the end, the whole society is unable to adopt a position that is strictly speaking political. 12 This is illustrated, from the beginning of the crisis, by the confrontation of what is often interpreted as a conflict between two types of politics, but ends up being more of a conflict between two moral values: the southern countries invoke necessary “solidarity” and the northern countries the no less necessary “responsibility.” Each side accuses the other of holding European construction back through its “selfishness” or “irresponsibility.” But true politics only begins, in the European Union, from the moment in which the parties are sitting around the table to elaborate a strategy destined to harmonize as much as possible these contradictory demands. Beneath the proclaimed moral values, there are indeed always legitimate national interests that should be articulated by European politics. Condemning southern people’s proclivity for spending or northern people’s limited solidarity are prepolitical moral postures. In the current crisis, the EU will be acting politically when it compromises about measures that will satisfy the long-term interests of all EU countries. The states that make up the Union always acted, like all states, on the basis of what they considered their interests, both when Europe was being founded and nowadays as well. 13 In the new globalized economic context, the interest presented by the fact of belonging to the Union is real for everyone, but it is much more complex and uncertain than in the period when Europe was being constructed, particularly regarding a fact emphasized by many economists, that some

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countries like Germany or the Nordic countries open their economies to the outside world while other countries are not able to focus their exports toward emerging countries. 14 This leads, within the European collective, to an asymmetry in dependence and solidarity, with the sacrifices that implies. The fact that the elaboration of coherent and effective compromises is particularly difficult in the European Union nowadays should not conceal the idea that only this specifically political path, by taking popular dissatisfaction with Union policies seriously, can make populist phenomena retreat. In other words, it can help overcome its immediate, prepolitical demands, saving itself from demagogical exploitations and structuring them as truly political forces. Taking popular dissatisfaction seriously and acting as a political authority does not mean that the Union must be more democratized, at least in the sense that the theorists of the democratic deficit give to that term. Insisting unilaterally on the democratization of the Union effectively places process before results, assuming that the most democratic processes will necessarily lead to the best results, which, when it is a question of Europe, is far from being obvious. Furthermore, as we have seen, the movement to democratize the Union can be, more than a solution, a symptom of its powerlessness. On the other hand, democratization is desirable in another sense: the need to take into consideration the popular demand for results and to respond with political action (which most likely assumes a democratization of the processes, but a sui generis democratization). Taking popular dissatisfaction seriously and acting as a political authority does not mean politicizing the Union more either, at least in the sense that is generally given to that expression, because it could be, as various studies show, that such politicization, on the model that exists in nation-states, disorients people even further, reinforcing feelings of uncertainty, indifference and fatalism in the face of the European Union (see appendix, point 5). On the other hand, the politicization of Europe is eminently desirable, in the sense that we must try to respond to people’s demand with decided political action. In other words, we must become more conscious of the limits of European policies and the absolute need for coherence and efficacy, making an effort to make the order inherent to the European ideal emerge. As David Marquand describes it, the European Union can no longer remain on the fringes of “high politics,” as opposed to technocratic politics. 15 But, once again, high politics is not limited to some process (for example, a Commission with a more pronounced political profile, more in line with the majority of the European Parliament, or the election of the president of the Commission or the Council by universal suffrage). In other words: more than anything, the European Union is suffering from an executive deficit. 16 It is more than likely that there is a relationship

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between that executive deficit and the democratic deficit, but this connection is complex. Politicization and democratization do not guarantee, in the Union, coherent and effective results, and the results are compatible with various institutional forms. 17 One could interpret and call this executive deficit whatever one likes, connecting it to a lack of leadership, inadequate political will, the blindness of European leaders, a “loss of energy” of the European people (Manent 2013, 91), and so on. What is important here is understanding, beyond the different explanations of the executive deficit, that “high politics” only exists when, beyond its institutional forms, there is a will to construct a limited, clear, coherent and effective order. An order can be simple or complex, and the order of the Union is undoubtedly very complex. But we must remember this tautology: a complex order is still an order. This can be affirmed, and we can conceive of the Union with an executive deficit, without therefore accepting the neo-Schmittian theses that affirm that executive power is the ultimate power and that any control by the legislative authority or the constitutional court is illusory and futile (Posner and Vermeule 2011). If we do not manage to construct this European political order, there will only be two paths open to us, the path of chaos and the path of the nationalist order. We Europeans know well how these paths end up converging. By Way of Conclusion The situation in which we find ourselves is a new, particularly delicate stage in the formation of the European Union. That does not mean it is desperate. But it demands a vigorous effort of self-criticism of European authorities, who must adopt an ironic posture, according to Niebuhr’s terminology, before the ideology they generate. The self-criticism of European authorities seems as necessary to me as it is for nation-states and the people, areas in which we generally demand it. The European Union will have no choice but to make this effort at self-criticism, because there is good reason to fear that the populist phenomenon is not a passing malaise, connected to “the crisis,” but a longlasting dissatisfaction. The almost exclusive insistence by populist reactions on results does, of course, have its limits, beginning with the fact that all the European people do not expect the same results. 18 But, in spite of these limitations, and because of these limitations, it has the merit of reminding us (1) of the essence of political demand: we want to be governed effectively; and (2) that no political entity, whether a nation-state or the European Union, is an end in and of itself, and that the institutional methods that are established are never anything but means to an end. When these means become, in the eyes of an ever greater portion of the public, too numerous, too incoherent, uncertain and ineffective in their

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results, then there is danger of death, a beneficial danger for the European Union. APPENDIX Within the framework of this article, we cannot present at great length the empirical studies that support the defended hypotheses. The reader may want to consult two studies with very different methodological perspectives, the Standard Eurobarometer 78 (2012) and a recent study by four sociologists, Citizens’ Reactions (Duchesne et al. 2013). Although Citizens’ Reactions refers to polls from before the 2008 crisis, its final conclusions, regarding the issues of interest to us in this article, are not appreciably different from the results of the Eurobarometer, and its much more complex methodology allows them to add details and qualify the Eurobarometer results. Both surveys highlight the following points: (1) The degree of European dissatisfaction toward the European Union is high. What is of most concern is not the Union’s democratic nature but the effectiveness of its actions. According to the Eurobarometer, 57 per cent of those polled do not trust the European Union. But while 45 per cent (versus 44 per cent) are not satisfied with the Union’s democratic functioning, 58 per cent (versus 33 per cent) believe that the Union is ineffective. According to Citizens’ Reactions, the demand for democratization and participation is not a top priority (1348–30). (2) The European project and European institutions are not the object of massive rejection. According to Citizens’ Reactions, Europeans do not reject the Union as such: “we do not find a massive rejection of European level governance” (3755–64). Rejection, like total approval, is only present in groups of “activists.” The authors insist on the fact that the average nonactivist citizen manifests a more nuanced approval of the Union. They believe that the Eurobarometer’s classification of citizens into Eurosceptics and Euro-philes is too simple, that the polarization is in reality less marked because of the importance of attitudes of indifference, ambivalence and indecision (504–9). They also reveal the very limited knowledge that citizens have about European institutions and the way they function (1243). According to the Eurobarometer, 52 per cent of the citizens say they do not understand how the Union works. (3) The two studies reveal a strong contrast between “a positive assessment of the European project and a more critical evaluation of the current state of the EU” (Duchesne et al. 2013, 2157–58). Regarding the democratic character of the Union, the two polls indicate that the citizens do consider it democratic (Duchesne et al. 2013, 2577–81), but they are sceptical about the realization of this democratic ideal (2660–62). Regarding the efficacy of the Union, the very negative evaluation is accompa-

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nied by a strong demand for efficacy (in response to the Citizens’ Reactions question about who can act most effectively against the crisis, the Union comes in first place, before the nation-states or the IMF); 76 per cent believe that a stronger coordination of economic policies is an effective means to fight the crisis. (4) We can see in the two polls that citizens are conscious that their fate depends as much—or more—on what happens on a global level as on a European level (Duchesne et al. 2013, 3747–52). (5) According to Citizens’ Reactions, the poll shows that a greater politicization of European institutions could lead to “greater ambivalence and indifference” (2415–29) and raise hopes that cannot be satisfied, which could, in the end, enlarge the gulf between the European Union and the people (2432–34). BIBLIOGRAPHY Bibó, Istvan. 1993. Misère des petits États d’Europe de l’Est. Paris: Albin Michel. Buonanno, Laurie, and Neil Nuguent, eds. 2012. Policies and Policy Processes of the European Union. Basingstoke, UK: Palgrave Macmillan. Champeau, Serge. 2014. “De la morale à la politique; le réalisme chrétien de Reinhold Niebuhr.” Revue d’Histoire et de Philosophie Religieuse 94/1. Strasbourg. Chopin, Thierry. 2012. “Le libéralisme à l’épreuve.” In Populismes. L’envers de la démocratie, edited by Marie-Claude Esposito, Alain Laquièze and Christine Manigaud. Paris: Vendémaire. Coussedière, Vincent. 2012. Éloge du populisme. Grenoble: Elya éditions. Duchesne, Sophie, Elizabeth Frazer, Florence Haege and Virginie Van Ingelgom. 2013. Citizens’ Reactions to European Integration Compared: Overlooking Europe. Basingstoke, UK: Palgrave MacMillan. Eurobaromètre Standard. 2012. 78, November 2012. Accessed 6 March 2014. http://ec. europa.eu/public_opinion/archives/eb/eb78/eb78_first_en.pdf. Foessel, Michael. 2012. Après la fin du monde. Critique de la raison apocalyptique. Paris: Seuil, Kindle edition. Garton Ash, Timothy. 2012. “What’s Best for Both Sides? Try a Dual-Core Europe.” London: Guardian, 21 November 2012. Goulard, Sylvie, and Mario Monti. 2012. De la démocratie en Europe. Paris: Flammarion, Kindle edition. Goulard, Sylvie. 2013. “L’Europe entre rêves et cauchemars.” Commentaire 140 (Winter 2012–2013). Manent, Pierre. 2013. “La crise du libéralisme.” Commentaire 141 (Spring 2013). Marquand, David. 2012. The End of the West: The Once and Future Europe. Princeton, NJ: Princeton, Kindle edition. Middelaar, Luuk Van. 2012. Le passage à l’Europe. Histoire d’un commencement. Paris: Gallimard. Paibis, Laurent, and Olivier Passet. 2013. “L’Allemagne prend le large.” Les Echos, 13 June 2013. Pech, Laurent. 2012.“The Institutional Development of the EU Post-Lisbon: A case of plus ça change . . . ?” In The European Union after the Treaty of Lisbon, edited by Diamond Ashiagbor, Nicola Countouris and Ioannis Lianos. Cambridge: Cambridge University Press. Pisani-Ferry, Jean. 2013. “Assurance mutuelle ou fédéralisme: l’euro entre deux modèles.” Commentaire (Paris) 140, Winter 2012–2013.

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Posner, Eric. A., and Adrian Vermeule. 2011. The Executive Unbound: After the Madisonian Republic. Oxford: Oxford University Press. Puetter, Uwe. 2012. “The New Intergovernmentalism in EU Governance.” In Key Controversies in European Integration, edited by Hubert Zimmermann and Andreas Dür. Basingstoke, UK: Palgrave Macmillan. Renan, Ernest. 1996 [1882]. “What Is a Nation?” In Becoming National: A Reader, edited by Geoff Eley and Ronald Grigor Suny. New York: Oxford University Press. Véron, Nicolas. 2013. “La redéfinition politique de l’Europe.” Commentaire (Paris) 141 (Spring 2013).

NOTES 1. Vincent Coussedière remembers that politics is “the fact of pursuing selected goals together” (2012, 120). 2. “The general characteristics of populism today are quite clearly identifiable: in the first place, it is a question of denouncing political, economic, and social elites who are accused of confiscating and betraying the power of the people, which is the only valid foundation for legitimate authority” (Chopin 2012). 3. V. Coussedière makes a pointed distinction between the populist phenomenon and its exploitation by demagogues. See appendix, point 2. 4. Quoted in Buonanno and N. Nuguent (2012, 283). 5. As V. Coussedière says, “the people fight to survive by once again discovering the solidarity of their social and their political beings” (2012, 72). 6. Regarding this gap between the European ideal, as conceived by the people, and the current state of the Union, as they perceive it, see the appendix, point 3. 7. Chopin (2012, 217) emphasizes that “the apparent weakness of the European Union’s response made one think that the Union accepted the liberal creed because it was incapable of providing itself with the instruments of an economic government that would attempt to prevent budgetary, monetary, and salary laxity (German point of view) or the application of a politics of macroeconomic stabilization (French point of view). The Europeans, who had placed a lot of hope on the European Union in the context of a systemic crisis, were disappointed.” 8. All of Niebuhr’s work is a criticism of moral idealism and a defence of political realism. See Champeau (2014). 9. For Niebuhr, equality and freedom, or efficacy and justice, are not immediately compatible. 10. Uwe Puetter (2012), based on a very fine description of the Union’s decisionmaking processes, affirms that the “new intergovernmentalism,” in the economic field and in foreign policy and defense does not threaten the movement in favour of European integration, because this intergovernmentalism is closely connected to communitarian processes; in the same way, Luuk van Middelaar (2012) rejects the opposition between federalism and sovereignty, insisting on the fact that the European decisionmaking process includes intervention not only in the internal sphere (communitarian method) and the external sphere (intergovernmental method) but a third area (the “intermediary sphere” of the action of the European Council, which cannot be reduced to the traditional game of alliances between the states; it should instead be interpreted as proof of a politicization and democratization of the Union). 11. D. Marquand claims that the founding fathers of Europe tried to build institutions that are safe from political life with all its “messy, vulgar, clamorous irrationality” (2012, 63), and everything that was related to the ethnic reality was considered “archaic, backward-looking, divisive, and above all, dangerous” (2012, 53). 12. D. Marquand specifically insists on the idea according to which the political crisis that we know is manifested as much on the level of the European Union as on the level of the states and the peoples: “Weakened and defensive states, terrified at losing such prerogatives as remain to them, are not alone in feeling its effects. So do

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some (though not all) of the peoples for whom they claim to speak. Not only have the states grown more assertive and rigid in response to their loss of capacity and legitimacy; as the peoples have come to feel that power has slipped away from the political communities to which they belong, they have sought scapegoats both at the top of the social pyramid and at the bottom” (2012, 83). 13. I am not convinced by the idea, which is developed particularly by Ulrich Beck, that threats related to global risks or the economic crisis will necessarily bring about new solidarities. Cf. Foessel: “nothing assures that the globalization of risks spontaneously favors global democratic institutions” (2012, 4227–32). 14. Cf. for example Xerfi’s analyses. They are summarized in Paibis and Passet (2013). 15. “However, the days when the European project could stay out of high politics are over. One reason is that monetary union—the last great achievement of technocratic Europe—burst the banks between low politics and high politics” (Marquand 2012, 109). 16. Various voices were recently raised to insist on the idea of an executive deficit: “the executive deficit is truly at the core of the European crisis” (Véron 2013,174); “We already have a multi-group, multi-tier Europe, and it is on the brink of becoming a multi-directional one” (Garton Ash 2012); “to the crucial need for legitimacy . . . we add the necessity, no less pressing, of a European executive authority” (Goulard 2013, 1033). 17. An exercise of institutional design would be beyond the framework of this chapter and the abilities of its author. Regarding this type of executive power that could allow coherent and effective management of the Eurozone, I suggest the excellent article by Jean Pisani-Ferry (2013, 1162). 18. We must not consider the people as more naive than they are; of course, they do not all want the same thing, but they are conscious of that. “Citizens are not specialists in political science, but that does not make them stupid” (Duchesne et al. 2013, 3796–97).

ELEVEN Legitimacy in a Neomedieval (Postcrisis) Europe Jan Zielonka

The current debate about Europe is fascinating. It is truly political, intellectual and entertaining. Yet there are two problems with it. It confuses the deficiencies (or even failures) of the integration project with the deficiencies (or even failures) of capitalism and democracy. The EU was hardly responsible for the latter two failures and, by extension, one should not expect the EU to revive or remake capitalism and democracy. We need to locate the European integration project in the historical trajectory of democracy and capitalism. Integration can only be successful if it manages to work in synergy with political and economic forces. The current debate also projects the past onto the future. Although the past has largely been determined by the relationship between European nation-states and an ever more federal Europe, this does not need to be so in the future. The crisis is likely to weaken both the EU and its member states. Both performed poorly in the period of good weather and failed to cope effectively with the bad weather. They may survive the current storm, but the claim that any of them will come out of this storm stronger rather than weaker represents a poor version of historical determinism that even Marx or Hegel would not suggest. This means that many different actors will play important roles in the future European political game: imperial-like states and ministates, strong regions and cities, the remnants of EU institutions and numerous European NGOs. (I am not even talking about a plethora of non-European actors, private and public, taking part in European politics). The interests and influence of these actors will vary and so will their political philosophy and culture. Integration 211

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can only be successful if it manages to create the rationale for cooperation between these multiplicities of influential actors in a postcrisis Europe. To sum up these introductory remarks: the point of departure for our discussion matters. You probably know the story of a lost man asking a peasant for the route to Rome, in which the peasant replies: I would not start my journey here if I were to get to Rome. 1.THE EU AND ITS MEMBER STATES In the past it was often suggested that integration produces a win-win situation for both nation-states and the European structure. Integration was said to rescue nation-states. The economic benefits of market integration were seen as providing the member states’ governments with a powerful tool for subsidizing national welfare. Moreover, the EU was helping European states fend off globalization, and it represented a convenient scapegoat for states’ governance failures. Today the European welfare system is in tatters in most of Europe and the EU is seen as an agent of globalization, imposing severe domestic constraints on its member states. One can discuss the accuracy and fairness of such reasoning, but it is hard to deny that the win-win logic has been replaced by a bipolar logic: some argue for repatriating powers from the EU to the nation-states, while others argue the opposite. The former believe that nation-states will function better after breaking free from the EU’s bureaucratic corset. The latter believe that only a courageous jump into federation will save Europeans from financial predators and warlords. I believe that both groups are wrong. In my view, both the EU and nation-states will come out of this crisis with many bruises, some of them potentially deadly. As a result we will end up in a lose-lose situation. Why? Federalism would imply giving more power and resources to the same institutions that proved ineffective in solving the crisis or even made things worse. This explains why so few Europeans are currently endorsing the federal project. For instance, according to the November 2012 Eurobarometer, since the beginning of the euro crisis, trust in the European Union has fallen from positive 20 to negative 29 per cent in Germany and from positive 42 to negative 52 per cent in Spain. 1 Moreover, for an economic and political union to emerge, a European ministry of economics would have to be created and be put in charge of redistribution and taxation. National parliaments would need to transfer sovereignty to a reformed European Parliament. Foreign and defence ministries would have to be merged into a single European framework. At present such steps are not seriously being contemplated. In fact, the EU (or more precisely, the Eurozone) is unable to persuade the creditor countries to convert their existing stock of government bonds into eurobonds;

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a crucial step to guarantee the survival of the Euro. Can one contemplate a European federation in this situation? In fact, we see the opposite trend. The UK wants to repatriate numerous powers from Brussels and may end up leaving the EU altogether. Germany increasingly relies on bilateral diplomacy rather than common European institutions to cope with the crisis. (Consider, for instance, the German loan to Spain to tackle unemployment.) The EU is only allowed to rubber stamp and enforce unpopular decisions conceived in Frankfurt and Berlin. Numerous other member states also conspire behind the EU’s back. The official guardian of common interests, the European Commission, is increasingly marginalized. Proposals to revive the EU are either cosmetic (e.g., direct elections of the President of the Commission) or highly divisive (e.g., tighter integration within the Eurozone only). In short, the empirical evidence strongly suggests that the EU will end up with much less formal power and political influence and may even collapse altogether. Will the weakening of the EU reinforce European nation-states? The answer is negative, in my view. With no EU to help or blame, nationstates will find it increasingly difficult to legitimize their overreaching powers. The EU was never as effective in facing off the global competition as it claimed, but it certainly was more effective than even the largest European nation-states can ever be. Moreover, the democratic challenges facing European nation-states will not disappear with the demise of the EU. The EU may well have been responsible for the erosion of parliamentary prerogatives in its member states, but it was not responsible for the weakness of political parties, floating electoral markets, cascading political polarization, teledemocracy and clientelistic culture. Reviving the spirit of nationalism will not be easy either, especially in states with strong regional identities such as Spain, Italy, Great Britain or Belgium (Keating 2004, Le Gales and Lequesne 2013). In these states regions are already quite autonomous and in charge of issues close to citizens’ concerns, such as schools, hospitals, roads and housing. Large cities are also growing in importance as economic, social and democratic units (Brenner 2004, Sassen 2001, Taylor 2003). One can expect that the weaker nation-states become, the stronger other political units such as cities and regions will become. Their political agendas are not complementary, let alone identical. Cities, with their sizable immigrant populations, can hardly identify with nationalist agendas. Cities, being the embodiment of digital networks, have little interest in territorial politics of borders and fences. The security policies of states and cities are also fundamentally different (Graham 2010; Sassen 2012). This does not mean the withering away of European nation-states, but power will be more dispersed in Europe, political loyalties will be multiple, governance structures more complex and open-ended, jurisdictions more criss-crossing, territorial authority more elusive. Moreover, some

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states will do better than others. States such as Cyprus or Greece, but to some extent also Portugal, Spain, Italy, Ireland, Romania, Bulgaria or Belgium, are clearly dysfunctional, if not failing altogether. Some of them are having difficulty balancing their budgets and are under international supervision from the infamous Troika, imposing on them painful economic and social policies. They have an overblown and largely ineffective public sector; a private sector that is neither properly regulated nor truly competitive; a political class that is divided, corrupted and disconnected from the electorate and a civil society that is unhappy with the performance of their state and increasingly unwilling to shoulder the burdens of externally imposed structural adjustments. On the other hand, we have states such as Sweden, Finland, Austria, Denmark or the Netherlands with fairly high administrative capacities, competitive private sectors, sustainable levels of social provisions, relatively low levels of corruption and a relatively less conflict-prone political culture. Some of these stronger states may soon begin to act as local hegemons or quasiempires. This is already evident in the case of Germany, which not only became Europe’s greatest paymaster, but also a mediator between other states, an ideological trendsetter (ordo-liberalismus as its brand) and a patron of numerous cultural events. Finland is also extending its economic, political and cultural influence, particularly in Estonia and Latvia. But such imperial status does not come free of cost. Unstable peripheries will demand money and protection; they will cheat and rebel, they will draw the imperial centre into their petty internal squabbles. In essence, they will cease to be self-governing units able to function without external intervention. This story does not promise a bright future for European nation-states. Does it? 2. NEOMEDIEVAL EUROPE The Europe emerging from my argument will increasingly resemble a maze without a clear hierarchy or structure. In this European maze different legal, economic, security and cultural spaces are likely to be bound separately, crossborder multiple cooperation will flourish and the inside/ outside divide will be hazy. Most states will enjoy limited sovereignty not just because of mounting global economic pressures, but also because of the demands coming from powerful regions, cities and neighbouring states (or if you wish, local hegemons). Citizen loyalties will be split; democracy will function differently and independently at the local, national and regional levels; social and administrative provisions will be offered by diverse public and private actors operating transnationally. The key terms representing this emerging neomedieval reality would be plurality, hybridity and heterogeneity.

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One may label the suggested scenario as postmodern or cosmopolitan, but I prefer to use the term neomedievalism. 2 This is because there is a respected body of literature identifying such a system of plural political allegiances, overlapping jurisdictions and socio-cultural heterogeneity with medievalism. As John Gerard Ruggie puts it: The medieval system of rule reflected “a patchwork of overlapping and incomplete rights of government,” which were “inextricably superimposed and tangled,” and in which “different juridical instances were geographically interwoven and stratified, and plural allegiances, asymmetrical suzerainties and anomalous enclaves abounded.” (Ruggie 1983, see also Friedrichs 2001, Khanna 2009)

In a postcrisis Europe we will observe a similar pattern of transnational politics with increasingly fuzzy borders, overlapping jurisdictions, multicentred governance, blurred identities, and cascading socioeconomic discrepancies. The medieval paradigm does not propose any historical analogy or a “back to the future” scenario, but it helps comprehend the European trajectory of change. Most scholars of the EU assume that Europe will stay as it is, subject to some minor adjustments only. This is a folly in view of the mounting evidence. In the future Europe the key agents of integration will probably be functional agencies, networks and clubs operating independently from each other in different fields such as trade, agriculture, immigration, human rights or foreign policy. 3 In other words, integration will continue, but it will not be led by the EU and controlled by European nation-states. Medievalism does not represent a political option; it is the product of a complex historical process compounded by the euro crisis. One can hardly imagine politicians campaigning for such a medieval Europe, if only because they fear getting stuck in a maze and losing control over multifaceted European structures. Yet, there is no need to demonize medievalism. 4 Some of Europe’s most impressive cultural, technological, architectural, intellectual and even social accomplishments took place in the late medieval period of the Renaissance. Nor is medievalism a symbol of anarchy and war. As numerous scholars have shown, the medieval system was law-based; law mattered not just as an abstract norm, but as a capability that structured interests. The patchwork of various medieval quasisovereignties and overlapping hierarchies was also fairly orderly and stable due to the existing system of oaths and contracts, however complicated (Ullmann 1966, 215–230; Spruyt 1994, 34–57). Weaker actors in the Middle Ages often had less “voice” than those in the Westphalian (democratic) era, but because the medieval borders were quite fuzzy they could exercise much more “exit.” 5 The expedient pursuit of egocentric interests was also curbed by the strong moral values and religious principles that prevailed in the Middle Ages. While a plethora of modern analysts, from Bodin and Hobbes to Kissinger and Waltz, argued that moral

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rules do not apply to states, medieval authors such as Thomas of Aquinas or Saint Augustine sought to define a concept of just war. 6 Of course, there was a great deal of predatory behaviour in medieval Europe, but it would be wrong to assume that military means were the preferred tool of “foreign” policy at the time. Medieval rulers preferred to use nonviolent means in pursuing their European objectives. For instance, the Habsburgs augmented their territories chiefly through marriage and inheritance. Other actors, especially the major cities, pursued their objectives through trade. The papacy relied on the church’s spiritual “power” and well-organized taxation. Armed forces were deployed rather reluctantly in medieval Europe because they were not predictable or reliable instruments (Kennedy 1988, 71). In conclusion, there is no need to castigate the Middle Ages. The question, however, is whether medievalism can allow some forms of continental integration. For most scholars specializing in the EU, medievalism is a symbol of disintegration rather than integration. This is because they identify integration with strong common institutions, ever greater convergence and central steering. I will argue, however, that reducing the size and power of the EU’s institutions may bolster integration rather than halting it. This is chiefly because the current integrative project has been discredited and is difficult to repair. So far, there are few signs suggesting that the EU can reform itself. By the same token, it became an obstacle to integration. Those in the private and public sector who depend on smooth integration have no “horse to put money on.” They urgently need to be given more plausible ways for fostering transnational endeavours. Medievalism will offer them an opportunity to forge an integrative project independently from the powerful centre in Brussels, which is at the service of a few most powerful member states. Functional clubs and networks will represent a viable alternative to the current overcentralized and overpoliticized arrangement embodied by the EU. Medievalism will also facilitate integration based on the principle of tolerance and pluralism. “One-size-fits-all” solutions are not well suited to the highly diversified European environment. The absence of central steering may open the door for more effective, flexible ways of governance recognizing local conditions. In the future, the notion of cosmopolitan Europe may induce more young people to pursue crossborder cooperation rather than the notion of a European superstate. Journalists, artists and teachers may be better agents of integration than Eurocrats. European firms will not stop trading with each other simply because the European Commission no longer exists. Europe’s history also shows that cooperation and even integration can flourish in complex and diversified systems. As Eric Jones’s historical comparison of Asia and Europe has shown, for several centuries integration in various forms and shapes was Europe’s characteristic feature. Despite the occasional wars and cascading heterogeneity, Europe formed

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a quite cohesive if not unified cultural, economic and even political system. However, unity was understood in a different way in Europe than in the Chinese or Ottoman empires. European unity recognized a high degree of pluralism, contestation and competition (Jones 2003). All this suggests that integration may well progress in a medieval Europe, but it would be a different kind of integration than the one represented, first, by the European Communities and now the European Union. We can learn more about it from the work of David Mitrany than that of Ernst Haas. The former proposed original solutions for integrating complex, interdependent and transnational polities, the emergence of which we are witnessing today (Mitrany 1966; compare with Haas 1968). In any case, integration would represent an enormous intellectual and practical challenge. One of the trickiest issues to address is the issue of legitimacy. 3. INTEGRATION AND LEGITIMACY European integration will not be seen as legitimate without economic prosperity and/or democracy. The current discourse focuses on the question of whether the EU needs both in order to enjoy legitimacy. In other words, is output legitimacy sufficient? And if not, how can the EU be made more representative? (Youngs 2013). My view is that output legitimacy is fine during fair-weather conditions. During times of bad weather, there is more need for democracy, but this can hardly materialize through the European Parliament for at least two reasons. First, parliaments are no longer as sovereign, representative and scrutinizing as they used to be. Second, the European Parliament is even more deficient than national parliaments, and it is likely to remain so even if given more powers. In fact, the European Parliament has obtained more powers with each recent treaty, yet fewer and fewer people bother voting in European elections, and those who do vote often support anti-European politicians. The crisis of parliamentary representation is worrisome, but it does not herald the end of democracy. We are simply moving to a new democratic stage, and the question is whether medievalism clashes with, or reinforces, this democratic trend. According to John Keane, we are faced with the new “postparliamentary” phenomenon of “monitory democracy” manifested by the rapid growth of numerous extraparliamentary, power-scrutinizing mechanisms (Keane 2011; 2009). Democracy today, according to Keane, is chiefly about self-governed networks monitoring traditional political institutions and forcing them to make regular adjustments to their policies. This is close to my neomedieval argument. The ever growing number of political think tanks, surveys, focus groups, deliberative polling, online petitions and advocacy services, to mention only some of nearly one hundred new types of power-scrutinizing de-

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vices, change the nature of representation and democracy. Monitory bodies, Keane argues, keep politicians, parties and elected governments permanently “on their toes.” They question the authority of formal institutions, force politicians to change their agendas and break long-standing corporatist arrangements. Democracy is no longer about delegating power to elected officials within confined territorial states. Nor is democracy a government implementing the common “will” of any given (national) majority. Other scholars reinforce this line of thinking. For instance, Michael Saward argues that the state-centred model of representative democracy, with its formal reliance upon parliaments, parties, elections and constitutions, does not exhaust the potential of contemporary democratic representation. In his view, an ever greater scope and intensity of public engagement by local and transnational organizations of civil society is also, if not chiefly, about democratic representation. Nonstate democratic representation occurs in and around various interest and pressure groups, the workplace or the corporation, social movements both old and new, and in clubs, societies and advocacy groups in regional or city communities (Saward 2010). There are also scholars who talk about the rise of various forms of international and transnational forms of democratic representation resulting from a kind of societal denationalization of the modern world (Held 1989, Zürn and Walter-Drop 2010). In short, one can easily envisage democratic forms of governance in a neomedieval setting where states and their parliaments are no longer the dominant agents. The crisis has clearly accelerated the erosion of parliamentary representation in Europe. The parliaments in the debtor states rubber-stamped fiscal rules made in the creditor states, in some cases causing public fury. But parliaments in the creditor states were not in the driving seat either. The Fiscal Compact Treaty was rushed through by the Merkozy duo with little input from their respective parliaments. The Fiscal Compact and other arrangements adopted in the wake of the crisis seem to also hamper economic growth in numerous EU member states. Some experts argue that they condemn the creditor states to many years of economic stagnation. This leaves little space for the EU’s output legitimacy, least so in the debtor states. Moreover, the adopted laws allow little flexibility and diversity, even though these are the usual prerequisites of efficient governance. The Fiscal Compact Treaty, in particular, envisages strict common rules, but without robust common institutions. Germany and France have clearly not learned the lesson of 2003, when they found the macroeconomic criteria from Maastricht too rigid to cope effectively with rapidly changing economic circumstances.

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4. LEGITIMACY IN A NEW EUROPE Legitimizing the EU’s institutions in the context of the ongoing crisis seems like an impossible task. The burning of shares at the London Stock Exchange or Borsa di Milano has led to the burning of European flags in the streets of Budapest, Nicosia and Athens. EU institutions have been unable to decouple the two developments. Put differently, two fires merged, causing unprecedented social and economic devastation. Germany’s insistence that there is only one way to redeem the fiscal “Schuld” (with the double meaning of debt and guilt) has ejected democratically elected politicians from office and helped populist agitators to prosper. EU institutions oversaw and assisted this process. Under the watch of EU institutions, the continent has been split into antagonistic groups of affluent creditors and impoverished debtors, of policy makers and policy takers, of those in Europe’s periphery and those in Europe’s metropolis. Who will reintegrate these groups in the future: the same EU institutions? Delegating European integration to agents that are not the current EU institutions should produce a legitimacy “bonus” given the current situation, at least in the short term. In the long term, the new system would have to prove its efficiency and accountability. The new system proposed here envisages integration along functional lines, carried out by various clubs and networks. Some of those will be new, while others will represent reformed agencies already existing, such as the European Environmental Agency in Copenhagen or the Eurojust (European Body for the Enhancement of Judicial Cooperation) in The Hague. Efficiency may be easier to achieve for autonomous functional clubs or networks responsible for performing very specific integrative tasks, be it in the field of transport, migration, food safety, trade, sport or tourism. If a functional agency proves inefficient, its board can easily be dismissed. This is unlike the case of the European Council or even Commission. Moreover, dysfunctional functional agencies can be dissolved or disbanded without catastrophic political implications, unlike in the case of the current EU. All of this already facilitates accountability and not only efficiency. The dispersion of power envisaged in a Europe of clubs and networks will also facilitate accountability. To paraphrase a famous saying, concentrated power corrupts more than dispersed power. Securing transparency may be difficult in a complex system of clubs and networks, but networks usually watch each other and publicize abuses of power. Moreover, they are easier to penetrate for the media than megabureaucracies such as the EU. Citizens’ involvement and participation in clubs and networks will also be a challenge, but not greater than in the case of the EU. Moreover, the functional approach allows a more focused public discourse. This is difficult in the current EU, where specific functional problems are being mixed in with the overall institutional ones.

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In summary, legitimizing complex polities is certainly a challenge, but it is not necessarily a greater one than legitimizing the current EU. Legitimacy of networks can be based on expert knowledge and moral authority. Those networks that enhance civic participation, public discourse or contestation will enjoy a republican type of legitimacy, to use Michael Zürn’s words (2013). Those networks that specialize in protection of human rights and the rule of law principle will enjoy a liberal type of legitimacy. Of course, networks do not compare with constitutionalized nation-states or multinational (co)federations. Legitimacy of networks does not stem from popular elections and parliamentary representation. However, this does not mean that networks operate above law and lack any sound source of legitimacy. Credibility of networks’ assessments combined with their transparency, accountability and crosspartisan membership can help networks enjoy different forms of input and output legitimacy. The point is to comprehend the evolving reality and adjust the paradigm of integration and legitimacy to it. Flexible and decentralized forms of integration are not to be carried out by an ever changing group of unidentified persons. Nor will they operate in a rule-free environment. However, laws and rules may allow a considerable degree of autonomy and self-rule of various networks. Stakeholders’ supervision can involve bargaining and not just commands and orders. A crisis of legitimacy of some functional networks will not threaten the collapse of the entire integrative endeavour. CONCLUSIONS Some contributions to this volume question the severity of the euro crisis and its impact on European integration. Other contributions acknowledge that the crisis has shaken the EU and suggest that this shock will make the EU embark on the road toward a European federation. This chapter argues that the crisis has indeed been severe, but that rather than moving Europe toward federation, it is pushing it in the opposite direction. The crisis has undermined the credibility of the EU and tainted the model of integration led by European nation-states. Integration is likely to continue because of the high level of economic and political interdependence in Europe, and it will assume more functional and less territorial forms. Integration will not just be a matter of nation-states and the bureaucracy in Brussels, but also of many other actors, private and public. The role of large cities and regions has been emphasized in this essay, but attention should also be paid to corporate actors and various forms of transnational associations representing their interests. The capacity and capability of individual states in Europe will also vary across the continent. Most of these actors will not abandon integration, but will look for forms of integration other than the one represented by the EU. They are

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likely to forge integration through a variety of networks and clubs, addressing specific functional challenges. There are currently more than thirty such functional institutions and agencies. More similar agencies can be created; the existing agencies may gain powers, autonomy and resources. The governance of these various agencies will not resemble a pyramid, but something more puzzling and complex. This will be part of a more general trend that I labelled neomedievalism. Securing legitimacy for these various autonomous integrative arrangements will be difficult, but possible. In any case, it is hard to see any viable alternatives at present. The top-down integration project embodied by the EU is in tatters, and new forms of integration ought to be envisaged. The proposed decentralized forms of integration along functional lines may sound disappointingly modest to those advocating a European superstate. However, functional networks would be much easier to legitimize than any European superstate. 7 BIBLIOGRAPHY Brenner, Neil. 2004. New State Spaces: Urban Governance and the Rescaling of Statehood. Oxford: Oxford University Press. Davies, Norman. 1996. Europe: A History. Oxford: Oxford University Press. Deibert, Ronald J. 1997. “‘Exorcismus theoriae’: Pragmatism, Metaphors, and the Return of the Medieval in IR Theory.” European Journal of International Relations 3/2 (1997): 187. Friedrichs, Jörg. 2001. “The Meaning of New Medievalism.” European Journal of International Relations 7/4 (2001): 475. Graham, Stephen. 2010. Cities under Siege. London: Verso. Haas, Ernst B. 1968. The Uniting of Europe: Political, Social and Economic Forces 1950–1957. Stanford, CA: Stanford University Press. Hall, Rodney Bruce, and Friedrich V. Kratochwil. 1993. “Medieval Tales: Neorealist ‘Science’ and the Abuse of History.” International Organization 47/3 (1993): 479–91. Held, David. 1989. Democracy and the Global Order: From the Modern State to Cosmopolitan Governance. Cambridge: Polity Press. Hirschman, Albert O. 1970. Exit, Voice, and Loyalty: Responses to Decline in Firms, Organizations, and States. Cambridge, MA: Harvard University Press. Hirschman, Albert O. 1978. “Exit, Voice and the State.” World Politics 31/1 (1978): 90–107. Jones, Eric L. 2003. The European Miracle: Environments, Economies and Geopolitics in the History of Europe and Asia. New York: Cambridge University Press. Keane, John. 2009. The Life and Death of Democracy. New York: W. W. Norton. Keane, John. 2011. “Monitory Democracy?” In The Future of Representative Democracy, edited by Sonia Alonso, John Keane and Wolfgang Merkel. Cambridge: Cambridge University Press: 212–13. Keating, Michael. 2004. Regions and Regionalism in Europe. Aldershot, UK: Edward Elgar. Kennedy, Paul. 1988. The Rise and Fall of the Great Powers: Economic Change and Military Conflict from 1500 to 2000. London: Unwin and Hyman. Khanna, Parag. 2009. “The Next Big Thing: Neo-medievalism.” Foreign Policy, 15 April 2009. Accessed 15 April 2014. http://www.foreignpolicy.com/articles/2009/04/15/ the_next_big_thing_neomedievalism.

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King, Preston. 1999. The Ideology of Order: A Comparative Analysis of Jean Bodin and Thomas Hobbes. London: Frank Cass. Kratochwil, Friedrich V. 1986. “Of Systems, Boundaries, and Territoriality: An Inquiry into the Formation of the State System.” World Politics 39/1 (1986): 21–52. Le Gales, Patrick, and Christian Lequesne, eds. 2013. Regions in Europe: The Paradox of Power. London: Routledge. Majone, Giandomenico. 2013. Interview in Schwerpunkt Europe. Accessed 15 April 2014. http://www.verfassungsblog.de/de/europe-2023-giandomenico-majone/#. Uiv6K2xwYcA. Majone, Giandomenico. 2014. Europe as the Would-be World Power: The EU at Fifty. Cambridge: Cambridge University Press. Mitrany, David. 1966 [1943]. A Working Peace System. Chicago: Quadrangle Books. Ruggie, John Gerard. 1983. “Continuity and Transformation in the World Polity: Towards a Neorealist Synthesis.” World Politics 35 (1983): 247. Russell, Frederick H. 1975. The Just War in the Middle Ages. Cambridge: Cambridge University Press. Sassen, Sasskia. 2001. The Global City: New York, London, Tokyo. Princeton, NJ: Princeton University Press. Sassen, Sasskia. 2012. “Urban Capabilities: An Essay on our Challenges and Differences.” Journal of International Affairs (Columbia SIPA) 65/2 (Spring/Summer 2012): 85. Accessed 16 April 2014. http://jia.sipa.columbia.edu/urban-capabilities-essayour-challenges-and-differences/. Saward, Michael. 2010. The Representative Claim. Oxford: Oxford University Press. Spruyt, Hendrik. 1994. The Sovereign State and Its Competitors. Princeton, NJ: Princeton University Press. Stoessinger, John. 1991. “The Nation-State and the Nature of Power.” In Perspectives on World Politics, edited by Richard Little and Michael Smith. London: Routledge. Taylor, Peter. 2003. World City Network: A Global Urban Analysis. London: Routledge. Traynor, Ian. 2013. “Crisis for Europe as Trust Hits Record Low.” Guardian, 25 April 2013. Accessed 15 April 2014. http://www.theguardian.com/world/2013/apr/24/ trust-eu-falls-record-low. Ullmann, Walter. 1966. Principles of Government and Politics in the Middle Ages. London: Methuen. Youngs, Richard. 2013. “The EU Beyond the Crisis: The Unavoidable Challenge of Legitimacy.” Carnegie Europe Papers, Brussels, 8 October 2013. Accessed 15 April 2014. http://carnegieeurope.eu/2013/10/08/eu-beyond-crisis-unavoidable-challengeof-legitimacy/gpfa. Zarka, Yves Charles. 1996. Jean Bodin: Nature, histoire, droit et politique. Paris: Presses universitaires de France. Zielonka, Jan. 2006. Europe as Empire: The Nature of the Enlarged European Union. Oxford: Oxford University Press. Zielonka, Jan. 2014. Is the EU Doomed? Cambridge: Polity Press. Zürn, Michael, and Gregor Walter-Drop. 2010. “Democracy and Representation Beyond the Nation State.” In The Future of Representative Democracy, edited by Sonia Alonso, John Keane and Wolfgang Merkel. Cambridge: Cambridge University Press: 258–81. Zürn, Michael. 2013. “From Rule to Authority in International Institutions.” Paper presented at the Festival of Democracy, University of Sydney, Institute for Democracy and Human Rights, 7 November 2013 (unpublished).

NOTES 1. See http://ec.europa.eu/public_opinion/index_en.htm, accessed 15 April 2014. See also Traynor 2013.

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2. The use and misuse of the medieval paradigm has been well discussed by Hall and Kratochwil (1993). See also Deibert (1997). 3. I spelled out my vision of European integration in Zielonka 2014. A similar vision has been presented by Giandomenico Majone (2013; 2009). 4. I spelled out this argument in more depth in Zielonka 2006. 5. For the use of the terms “voice” and “exit” see Hirschman (1970, 1978). For the notion of borders in the medieval Europe see, e.g., Davies (1996, 185–88) or Kratochwil (1986). 6. The works of Bodin obviously preceded the Treaties of Westphalia. In fact, Jean Bodin’s influential work De La République, published as early as 1576, elaborated the concept of sovereignty and inspired the Westphalian arrangement. See, e.g., King (1999), Zarka (1996), Stoessinger (1991, 24). For the medieval concept of a “just war” see Russell (1975). 7. I spelled out the new paradigm of integration in Zielonka 2014.

TWELVE The Euro Crisis and Institutional Reform in the EU Miguel Poiares Maduro

The origins of the financial and economic crisis of the euro system are state- and market-based democratic failures that the original regime of euro governance did not adequately address. It is only by fully understanding the democratic character of the crisis that we can appropriately understand the extent of the democratic challenges faced by Europe and the role of the European Union in this context. Two narratives of the current crisis exist. Whichever we may adopt, at the very core of the explanation lies the recognition of a democratic failure. The first is the dominant narrative. It puts most of the blame for the crisis on some member states and their irresponsible fiscal policies and lack of economic competitiveness. Capital flight from those member states is a simple consequence of those irresponsible fiscal policies and underlying economic problems. But, meanwhile, the interdependence generated by the euro resulted in the financial problems of those states becoming a problem for all. This can be presented as a democratic problem, since the interests of the latter member states are not taken into account in the former member states’ democratic processes. But it is also a democratic problem internal to the former, since it reflects the extent to which domestic politics is more responsive to political cycles than to the interests of future generations. The second narrative does not see markets punishing the mismanagement of member states but, instead, as the main cause of the crisis. The 225

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crisis is a product of unfettered capital flows. After the creation of the euro, an excessive influx of capital occurred from northern banks to several EU member states, particularly in the south. Those banks benefited from the euro to inject liquidity into other member states in search of increased profits. This resulted in artificially lowered interest rates in their economies, creating a credit bubble. When the financial crisis took place in the United States and expanded to European financial institutions, it was only a matter of time until markets lost confidence and suddenly cut off access to credit in those countries. This narrative can (and ought) also to be presented in democratic terms. This is a form of transnational democratic externality imposed on the states. Or, in other words, capital movements can be presented as having a profound impact inside a state without being subject to its democratic control. The failure to internalize the democratic consequences of interdependence also explains what many perceive as the erosion of solidarity within the EU. In fact, the reverse is actually the case. Rather than being the product of the absence of a European cultural or social identity, lack of European solidarity is the result of that very lack of internalization of the consequences of interdependence: this time, of the benefits it generates. Whatever our view on capital controls, it is impossible to conceive of a European internal market subject to national capital controls. A fortiori, it is an impossibility within a monetary union. In fact, a stronger normative justification for the euro might be the opportunity it affords Europe to address the democratic challenges posed by capital flows. As to the first narrative and the possible answer to the democratic failure explicit therein, whatever our view of the benefits and costs of constitutionalizing fiscal discipline, two things are clear in the current EU context: this discipline is needed to reestablish market trust and also to reestablish trust between member states, but this discipline is also insufficient to address the current crisis, for both economic and democratic reasons. It begins by ignoring the fact that the fiscal situation of a state is closely dependent on its underlying economic situation. Several states that are now in a profound fiscal crisis were until recently fully compliant with the Maastricht criteria. The reasons for their fiscal crises have to be found in deeper economic problems that rapidly turned into a fiscal crisis. We need to take seriously the economic aspects of Economic and Monetary Union. A fiscal union requires fiscal discipline. But it also requires coordination of economic policies between states to work toward complementarity. Non-complementarity of economic policies can generate a problem of collective action. What seems to be reasonable for each state individually considered may well come to reveal itself as damaging for the collective. Imbalances inside the Eurozone must be addressed jointly within the framework of the Fiscal Compact, taking into account

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the different fiscal positions of the member states. Depending on the fiscal position of those states, different state policies might be necessary in order to be successful in the current adjustment process. Second, a monetary union also requires fiscal capacity. A regime relying exclusively on fiscal discipline to be enforced by the EU would undermine the already limited political and social legitimacy of the Union: either national political processes would preserve autonomy and the effectiveness of the rules would be put into question or the disciplining of national political processes by a nonpolitical space would put democracy itself into question. In light of the dominant discourse on the crisis, it may seem to many that our choice is between a Union anchored almost exclusively on discipline and that, sooner or later, will enter into a destructive conflict with national democracies or a Union that is captive to permanent negotiations between those national democracies, in an intergovernmental setting that is increasingly incapable of providing effective and legitimate governance. But that is not so. There is an alternative. 1. SIX CONDITIONS FOR EFFECTIVE AND LEGITIMATE GOVERNANCE Any answer to the current crisis and the form of EU governance adopted to that effect will have to fulfil certain conditions to be both effective and legitimate. What follows is a list of those conditions. We need political authority. Any successful model of EU governance will have to make clear that political authority stands behind the euro and the EU. It is the absence of this political authority that undermines the effectiveness and credibility of the Union governance of the euro. We need accountability. The current crisis is a prime example of the need for accountability. Who exactly was responsible for the crisis? Markets or member states? And who in the EU was responsible for the failure of the Maastricht instruments of surveillance and the coordination of national fiscal policies? Who should citizens hold accountable for the results of the adjustment programs “imposed” on some member states: their national governments or the EU? And if we conclude that the EU holds responsibility, does that mean the Commission, the ECB, the Council, or some member states within the Council? The diffuse character of EU political authority makes accountability virtually impossible and favours its manipulation by political actors: national political actors may use the nature of intergovernmental bargaining to transfer political costs to the EU. But, increasingly, EU institutions might use the fact that its policy choices will have to be enforced by national governments to evade accountability as well.

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We need to reestablish mutual trust between states and between citizens. This has been severely affected by the crisis. Some member states and their citizens believe they are paying for the mistakes and even the cheating of others. The others believe that the former states have not shown sufficient solidarity and are, instead, imposing a form of collective punishment on the latter. We need both rules and solidarity to be traced back by all citizens to collective goods shared by all. In other words, they must be linked to the broader purposes of European integration and the fair distribution of its costs and benefits. We need to render both the benefits and the democratic consequences of interdependence visible to citizens. This will never be achieved by information campaigns, no matter how well designed. The real source of communication by a political authority with its citizens is through the policies that it enacts and how they impact and are perceived by citizens. The benefits and costs of the European Union are only properly internalized by citizens if they are inherent to the character of EU policies, including its revenues. EU policies must be simultaneously capable of informing citizens about the benefits of European integration and the reasons for their contribution to it. We need to legitimate financial solidarity by relating it to the wealth generated by European integration and not the wealth of some states. The idea that the EU is an instrument to transfer the wealth of some states to other states is a poisonous tree that undermines any form of solidarity within the Union. We must detach financial solidarity and financial transfers between states. Financial solidarity must be a product of the wealth that the process of European integration itself generates and be guided by the goal of a fair distribution of the benefits of integration among all European citizens and all economic players. We need political integration to support the increased transfer of powers to the Union and its financial solidarity. The starting point for this political integration must be a European political space. Any form of political integration based only on national political spaces will, as described above, both lack sufficiently clear political authority and be incapable of internalizing the democratic consequences of interdependence. The suggestions to be put forward are aimed at promoting that political integration even in the absence of the treaty reform involved. 2. THREE SUGGESTIONS The following suggestions are based on three pillars: an increased EU or euro budget supported by real EU revenue sources, new and different kinds of EU policies, and more effective political authority supported by a European political space.

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An Increased EU or Euro Budget I favour an increase of the EU or euro budget so that it should provide the Union with the firepower necessary to play two fundamental roles in the context of a monetary union: First, introducing policies capable of addressing the asymmetries affecting the proper functioning of the monetary union. Second, using the EU or euro budget to address financial emergencies like the one that the Union is currently experiencing. Solidarity through transfers between states is not only limited but also undermines the social and democratic legitimacy of the Union. The citizens of member states which at a particular moment in time would be net contributors would tend to construe it as an unjustified transfer of their funds to cover risks assumed by other member states. Use of the EU or euro budget would prevent that direct link from being established. It would also signal to citizens in all member states that their financial solidarity will be limited to their obligations towards the EU or euro budget and is the price to be paid for the general benefits and costs of being part of the EU. The legitimacy of this form of financial solidarity would also be made stronger by changing the character and origin of EU revenues. The argument I want to put forward next is that what would make an increased EU budget possible, new resources for the EU itself, could actually also serve to legitimate the Union. Again, I must articulate clearly and carefully what is another counterintuitive argument. A polity, including the political authority exercised therein and the necessary solidarity between its members, must be made meaningful and intelligible to its citizens not only by how it represents itself but also by what it does. One fundamental aspect is certainly how revenues are collected and taxes organized. These are not simply a source of revenue. They are also a way for the reasons for solidarity to be made clear to the members of the polity. How revenues are collected in a polity, and taxation allocated, also informs citizens of the reasons for that polity and what it means to be a member of it. EU or euro revenues should not simply be determined on a pragmatic basis of how much is required to fund the Union budget and what is the easiest way to obtain it. Instead, the sources of EU or euro revenues should be determined by what makes the Union more legitimate to its citizens by making visible the reasons for the Union’s existence and linking its revenues to the benefits and costs that different social groups obtain from European integration. If conceived in this way, the new EU or “euro own” resources would not only provide the EU with the funds necessary to support the proposed budget increase but would also contribute to a clearer justification for the project of European integration. Furthermore, only in this way

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will we be able to legitimate solidarity within the Union on any meaningful and lasting basis. It is essential that the Union be seen as redistributing Union wealth and not merely the wealth of some member states. It is equally important for this solidarity to be related to the different degrees to which different social groups benefit from European integration and, particularly, the internal market. In this light, the choice of EU resources should focus on the following areas: economic activity enabled by the internal market; economic activity that, while taking place in a member state, has important externalities in other member states; or economic activity that member states can no longer individually regulate and tax on their own. In all these domains, the Union would be justified in obtaining revenues from the activity in question either because that activity would not exist without the Union or because the intervention of the Union is the only way to limit the negative effects of that activity in some or all states. In addition, the way those EU resources (in particular taxes) should be designed must take into account who benefits most from European integration. These principles should shape any possible proposals for new EUspecific resources. It is the link with democracy and a theory of justice that sheds a new light over the choice of some and not other resources and makes them both politically more viable and better capable of reinforcing EU legitimacy. New EU Policies Union policies also need to be rethought in light of what justifies European integration. The European Union can increase its democratic legitimacy by more closely aligning its policy priorities to the problems that, given the ineffectiveness of member-state solutions, it needs to address. But the problem with EU policies concerns more than having the right policies. The structure and character of EU policies also needs to be rethought. Politics remains intergovernmental at the decisive level of EU policy making. Policy decisions continue, in spite of the enhanced role of the European Parliament, to be a product of intergovernmental bargaining. More importantly, they continue to often be framed in intergovernmental terms. National governments aggregate the preferences of their citizens, and EU policies strike a balance between those aggregated preferences. Since, however, EU rules often affect individuals directly, they can, in fact, be constructed as discriminating on the basis of nationality. This

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affects citizen understanding of what determines the redistributive effects of EU policies and the idea of justice that guides them. It is unrealistic (and also wrong) to eliminate intergovernmental bargaining from EU policy making. But one should require EU decisions, whatever the bargaining underlying them, to be designed along the lines of EU citizenship rather than nationality and to conform to criteria of universality. In the future, this would require that a higher percentage of Union expenditures be allocated to policies structured around citizen benefits and rights instead of simply being allocated by national quotas. One hears endlessly about the European democracy deficit, real and imagined. But, as I have tried to emphasize, Europe’s real democratic deficit is to be found in its excessive reliance on national politics that have not internalized the consequences of European and global interdependence. More Effective Political Authority The Union’s democratic problem is also one of effectiveness. A democracy that cannot effectively govern is no democracy. There is no selfgovernment without government. Europe needs a strengthened political authority if it is to become a legitimate and accountable democratic authority. All this is only made more urgent because of the powers being transferred to the Union. A fiscal Union does require a political Union. This problem is particularly acute with respect to the Commission’s position. On the one hand, the Commission has lost part of its powers of political leadership to the Council. But, on the other hand, it has acquired significantly more powers with respect to the member states under the Fiscal Compact and other fiscal crisis–related legislation, such as the Six Pack. To be effective and legitimate, the Commission must be able to rely on the kind of legitimacy that comes with a direct link to the outcome of European elections. Elections to the European Parliament should be “transformed” into an electoral competition for the government of Europe. The most important step in this direction would be for the different European political groups to present competing candidates for the role of president of the Commission before the next election to the EP. The Treaties afford the European Council the power to propose the president of the European Commission, but his or her nomination is subject to approval by the European Parliament, and the electoral focus on the choice of a president would ensure that the “winner” of the elections would be the selected president. The cohesion of the Commission would also be reinforced by the fact that the elected president would have much stronger bargaining power vis à vis the member states in the selection of other members of the

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Commission. One may even consider whether the Commission should not fully reflect the political majority in the EP following the elections. I am well aware of the risks involved in this approach. The politicization of the Commission is bound to affect its perceived neutrality and the authority it derives from being conceived as a semitechnocratic body. But the reality is that the latter authority is already under attack. The expansion of EU and Commission powers into the core of social and economic policy issues is bound to immerse the Commission in politics. The only question is the nature of these politics. As what is happening in some member states is already making clear, the Commission will not succeed in preserving an appearance of technocratic neutrality in the face of deeply contested political issues. It will simply come across as a limit on democracy and politics. It will no longer be perceived as bringing reason into the passions of national politics but as passion without politics. In order for the Commission to effectively and legitimately exercise the role required by the new EU governance, it will have to embed itself in a political space where the legitimacy of the reason that it will impose on member states will gain the authority of political deliberation. A first consequence of the transformation of EP elections into an electoral competition for the government of Europe would be the promotion of transnational politics. Once each European political group selects a candidate for president of the Commission, it must also come up with a political platform or government program. Clearly, these political platforms, in order to be agreed on within that political group and to be successful in all member states, would have to focus on genuinely European issues: issues where citizens are not divided along national lines but across them. The simple need to come up with these European political platforms is bound to generate European politics. The Commission and its president would not simply gain stronger legitimacy. They would gain political capital. EU political authority would also be reinforced. The link established between the election and a specific political platform would provide the Commission and Parliament with a strong political claim in pursuit of the proposals contained in that platform. The effects of the change of paradigm that I propose with respect to EU politics would be profound. In a democratic Europe, citizens can disagree about the policies that will best respond to the current economic and financial crisis. If they are not presented with alternative EU policies, then the only alternative they have left is to be for or against Europe. Disagreement about the right European response must take place and be arbitrated in a European political space. The extent to which European citizens from different member states increasingly feel engaged in national elections in other member states, particularly those understood as

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playing a key role in EU policies, is revealing. This signals the extent to which European citizens perceive the EU as shaping their lives. But it also highlights the risk that they will see those lives being determined by national politics in which they have no voice. The only viable alternative is to offer such politics at a European level.

THIRTEEN About the Democratic Governance of the Euro How the Crisis Is Changing Europe Josep Borrell

Since 16 October 2009, when the Greek prime minister recognized his country’s public deficit issues, the crisis has now been going on for four years. But it is far from having run its course. We are not “after” the crisis. We can agree that, because of Draghi’s “guns of august” in the summer of 2012, the euro has overcome the acute phase of the crisis. No one seems to be betting on the disintegration of the European Monetary Union (EMU) any longer. But we have entered into a chronic phase of weak growth, unemployment and recession in the “peripheral” or “southern” countries (in the broad sense, since this also affects Ireland, France and the United Kingdom) and high risks of social disintegration. The Europe of “after” the crisis will be fundamentally different from the Europe that lived the euphoria of the first eight years of the euro. What was in principle a fiscal crisis of a small EMU country has become an existential crisis for the European project. The three axes—legitimacy, democracy and justice—chosen for this conference to analyse these changes are particularly appropriate given the fundamental political nature of the euro crisis.

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1. SAVING THE EURO BY SACRIFICING EUROPE? The euro did away with the European currency war, logically enough, but it has disguised growing differentials of competitiveness between territories and favoured processes of unsustainable indebtedness. Furthermore, rather than preparing the way toward political union, it weakened the feeling of community with new divisions between northern and southern Europe, between the wealthy countries bordering the Baltic (Club Balt) and the Mediterranean (Club Med), immersed in austerity and depression. As they say in Brussels, we may have saved the euro at the cost of sacrificing Europe. It is the time to remember Jean Monnet and his famous phrase: “Europe will be forged in crises and will be the sum of the solutions adopted for those crises.” Unfortunately, it is currently hard to believe the European project will come out of this crisis strengthened and expanded from the point of view of its legitimacy, its democratic operation and the equity of its cost sharing. That is particularly true for a country like Spain that has been fundamentally pro-European. Isolated by the Franco dictatorship, my generation viewed Europe as the combination of political freedom, social solidarity and economic progress for which we were longing. Which is to say, it represented the legitimacy, democracy and justice that now concerns us. We have lived the best period of our modern history within the EU. Both the assistance we have received and the “credibility transfer” that the euro gave us have contributed to this. 2. THE CRISIS CHANGES CITIZENS’ PERCEPTIONS OF THE EUROPEAN PROJECT But Europe, when implementing its policies to confront the crisis, is now perceived as an agent that imposes reductions in the system of social protection and that weakens democracy on the national level without having strengthened it on the European level. Only 18 per cent of Spaniards believe that their voice can democratically influence EU decisions. European authorities, whose legitimacy is scant, continuously lecture us about how much to raise our taxes and how much to lower our pensions and salaries. Because of European Central Bank demands, we had to quickly modify the constitution over the course of a few days, something we had been told was practically impossible. Those of us who are citizens of Spain, and of the many other countries affected by the crisis, have learned that we can change the government, but not policies, because those are determined in other institutions where there is no democratic control.

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Inequality and precariousness have experienced notable growth throughout Europe. Spain now has more inequality than any other country in the EU. In Spain, the number of people who live in extreme poverty, earning less than 30 per cent of the average salary (300€/month), has doubled, from 1.5 to 3 million. Unemployment, in addition to being at an unsustainable level—27 per cent of the active population—is becoming chronic: more than 25 per cent of the unemployed have been so for three years. The crisis is changing social structures and dissolving the middle classes. What is now important is not so much when we will escape the crisis, but the type of society we will have constructed during it. Throughout Europe, there has been an increase in income tax versus capital gains tax. Without flexibility on the type of change, social norms have served as an adjustment variable to confront the difficulties of an asymmetric macroeconomic shock. European citizens have strong feelings of injustice about the fortunes spent on rescuing the banks while pensions and basic public services are being cut. Unlike in 1929, in this crisis, the bankers are not committing suicide. Instead they receive enormous amounts of public money without managing to reactivate the credit circuit. In Spain, as in other peripheral countries, the EU is not seen as a solution, but as the cause of the decline in the social situation. And the legitimacy of the project is in question. 3. LEGITIMACY OF ORIGIN AND OF RESULTS The EU’s legitimacy of origin was always in question. But now the legitimacy of results that accompanied the first years of the euro has been lost in the face of the serious economic consequences of the crisis. The expectation of a continued and shared prosperity has disappeared. A double feeling of distrust and injustice has been created. Europeans in the money-lending surplus countries believe they are being pushed beyond the commitments they made in the Treaties. And the deficit countries that receive financial assistance believe they are being forced to adopt painful and ineffective policies. 67 per cent of the Spanish population believes that the applied policies are not producing positive results. All of this explains the growing disillusionment with European integration. Confidence in the EU has fallen from 57 per cent in 2007 to 31 per cent, and 46 per cent of the population is unsatisfied with the democratic operations of European institutions. But the same polls show that the citizens of the Eurozone do not want to go back to their national currencies. This may be because they are conscious of the costs of a breakup and backtracking. Or because they sense that it would be even harder to survive alone in the global world and that the answer to their problems must be found in a space that is bigger than the national arena.

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4. CHANGES IN ECONOMIC GOVERNANCE: FROM THE NONBAILOUT TO THE ESM In the last two years, there have been more advances in what is called the “economic government of the euro” than in the ten previous years. One could make the argument that these changes should have taken place sooner and better, that little has been done and that it has almost always been done too late. But the changes in economic governance of the euro have been very important. They have had to be because there were no plans in place to confront the financing problems of Eurozone members. In fact, it was presumed that nothing like that would ever be needed. In addition, since that eventuality was impossible, we had set it up so we had no access to the instruments necessary to confront it. Under the German conception, we Europeans tried to create a currency without politics, governed only by predetermined fixed rules. Every state was responsible for its debts, others could not share them and the ECB could not finance public deficits. But the virulence of the crisis forced us to transgress, often without recognizing it, those founding principles. Because of the difficulty of reforming the Treaties, new instruments were constructed on the margin of the communitarian system. We began with bilateral loans and, after many intermediate steps and frustrated attempts, we ended up creating a permanent mechanism of financial assistance, the European Stability Mechanism (ESM), equipped with its own capital contributed by the states, that is financed in the markets. It has a maximum lending capacity of five hundred billion euros. This would have been unthinkable before the crisis. 5. FOUR ERRORS ALONG THE WAY But there have been many errors on this journey. Let us take a look at four of them. First, financial assistance has taken place in extremis, perhaps because tottering on the edge of the precipice was the only way to make it acceptable to the public in the countries doing the financing. Secondly, it was given in exchange for austerity plans that restrict activity and make fiscal readjustments more painful and difficult. Third, we underestimated the spread of distrust and private investor predictions (what we call speculation). When Merkel–Sarkozy announced in Deauville that public debt holders would suffer losses, it hastened the fall of Ireland and Portugal. After the partial default on Greek debt, Spain and Italy suffered unsustainable interest rates and were only saved by the intervention of the ECB in August 2011, in exchange for the imposition of constitutional reforms, and by Draghi’s words in 2012. If Trichet had wanted to, or if they had let him, say in the summer of 2010 the same

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thing Draghi said in the summer of 2012, perhaps we would have avoided the crisis. Fourth, we allowed a vicious circle to be created between the difficulties of public funds and the solvency of the banks. The states went into debt to save their banks, and bank balances were downgraded as a consequence of the devaluation of their public debt portfolio. As a consequence of the last point, there was a brutal stoppage of financial flows between states and the reduction of credit to the economy. 6. LENDER OF LAST RESORT THROUGH THE BACK DOOR Under these circumstances, only an economic agent capable of providing unlimited amounts of liquidity can avoid market panic. The ECB has played this role as the lender of last resort for the banks, to which it has been lending ever greater quantities of money with increasingly weak guarantees and lower and lower interest rates. Although the Treaties prohibited the ECB from financing governments, the virulence of the crisis forced them to do so, or to threaten to do so, through the back door, in other words, through the secondary market. First, timidly and in tiny amounts, but then increasingly more so until Draghi noted that he would do so in an unlimited fashion if necessary, with the condition that the states have requested ESM assistance first and have submitted to strict vigilance. It is left to be seen whether these interventions are considered compatible with the Treaties in the end; we are awaiting a ruling from the German constitutional court, but for now, the possibility of intervention has made intervention unnecessary. To calm the lack of confidence in European markets, we have constructed direct solidarity between states through financial assistance funds and indirect solidarity through the ECB’s buying of public debt. These are the first steps in the construction of a “genuine economic and monetary union,” as the report that H. Van Rompuy elaborated for the European Council is entitled. 7. THREE AXES FOR CHANGE IN THE GOVERNANCE OF THE EURO The changes in the governance of the euro induced by the crisis are articulated around three axes: a new system of rules to avoid another fiscal problem similar to what happened in Greece, a banking union to correct the dangerous financial fragmentation of the Eurozone and the inability of some states to save their banks and a European politics of growth.

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A Reinforced System of Budgetary Vigilance The system of budgetary vigilance of the states has been widely developed. If the rules were enough of a guarantee (we have already seen that they were not), we could feel confident in this regard because we have given ourselves an impressive arsenal of rules. They focus excessively on the politics of public deficit, as if this were the only dangerous instability (we have also seen that it is not). A political pact, called Euro Plus Pact, a system of budgetary coordination, the European Semester, a package of six directives (the Six Pack) approved in November 2011 that reinforces the preventative dimension of the Stability Pact, a new Treaty on Stability, Coordination, and Governance (TSCG) that introduces what is (poorly) called the “golden rule,” which makes balanced budgets mandatory (the structural deficit should be capped at 0.5 per cent of GDP). In the case of Spain, this is in the constitution, which strikes me as an unfortunate measure. And if that were not enough, two other directives, the Two Pack, recently approved by the European Parliament (EP), reinforce the Commission’s control of national budgets and create independent fiscal authorities in every country. I do not know if the parliaments of every member state have realized the loss of autonomy that this signifies when it comes to approving their countries’ budgets. Preventive vigilance also extends to macroeconomic instabilities that are distinguished from those caused by public deficit. This includes the growth of credit, salaries, real estate prices and foreign commercial instabilities. But with any of these, things are much more benevolent and relaxed if we are dealing with surplus. An Incipient Banking Union The banking union has been in effect since it was approved in the European Council in June 2012. It is based on three elements: a supervisory system entrusted, with exceptions, to the ECB; a system of guaranteeing deposits on the European level, which nearly failed in Cyprus, and about which there is no agreement to make it truly pan-European; and a system for resolving the banking crisis, which is still under consideration. The process will be long and difficult, the implementation of the first pillar conditions the other two and this is easier to say than to do. In the meantime, the ESM cannot recapitalize directly to the banks, and its assistance is routed through the states, increasing countries’ deficit and debt as we know all too well in Spain and as the Cypriots learned in their recent crisis. The composition of ESM government agencies also presents problems of democratic legitimacy, given that its Council is made up of a group of secretaries of the treasury who can make decisions that are very politically important for the country receiving assistance without giving

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an explanation to any representative authority. The European Parliament is not even informed. A Weak Politics of Growth Regarding politics of growth, the changes brought about by the crisis are not equal to the problems. “Europe 2020: A European Strategy for Smart, Sustainable, and Inclusive Growth” is little more than rhetoric. The pact for growth decided in June 2012 to accompany the “fiscal compact” is a miniplan worth 120 billion euros, much of which is residual of policies that have not been carried out. This is clearly inadequate. The adjustment of the differentials of competitiveness based only on deflation in the south, without an expansive contribution in the surplus countries of the north, is not socially possible. As the Economist says, the Club Balt countries are right to demand responsibility of the Club Med countries, but they must be realistic about the demands that accompany the bailouts and contribute to the rebalancing of the whole with their national politics. Excessive austerity and deflation, with elevated levels of unemployment, negative growth and the drying up of credit, will make it impossible to apply the reforms necessary to restore competitiveness to the countries of the south. If surplus countries continue to apply restrictive policies and the salary growths of 2000–2010, the adjustments to the internal competitiveness of the Eurozone will demand levels of “internal devaluation” in the south that will be economically counterproductive and politically and socially impossible. We must look for the way to encourage demand at the same time as we maintain a credible trajectory of fiscal stabilization (relaxing the rules of cofinancing for European projects or excluding investments of the public deficit to increase the quality of fiscal adjustment). As Uride of the Peterson Institute argues, structural reforms are contractive in the short term because they increase uncertainty and decrease returns, which reduces demand. In order to be successful, they must be accompanied by policies that increase demand. If, additionally, they cannot use the same type of change to increase external demand, a recessionary vicious cycle is generated, as we see in Spain, where the situation is truly explosive. And public opinion is on the brink of becoming definitively anti-European. The changes brought about by the crisis have not been enough to give the EU a budget that allows for countercyclical action, which is needed more and more as national budgets are submitted to strict rules that prevent them from playing this role. The recently approved budgets for the next seven years go in the opposite direction. H. Van Rompuy’s previously cited report proposes affording the EU fiscal and budgetary capabilities, but for the moment, we are at the level

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of vague principles. There has been no agreement about resources belonging to the EU or the debt capacity to finance large pan-European projects or eurobonds. 8. SOCIAL VIABILITY OF THE POLITICS OF ADJUSTMENT We must analyse the results of the austerity measures followed so far and probe their social viability until they achieve the promised results. The question is whether these policies will produce positive effects before they are definitively rejected and the affected countries find themselves obligated to apply other strategies, including abandoning the euro, or changing the policies of the EU itself. For the time being, in spite of the austerity measures, the ratio of indebtedness has increased in the countries in crisis and in the EU as a whole. The reduction in salary costs does not lead to matching improvements in competitiveness given the stickiness of prices. There are reasons to be pessimistic about the race between effectiveness of adjustments and the ability for social resistance. 9. INSTITUTIONAL CHANGES. INTERGOVERNMENTAL PREDOMINANCE All the changes that have come about in Europe because of the crisis, particularly those that still need to be implemented, imply a transfer of sovereignty to a supranational level that should be accompanied by the necessary democratic control at that same level. This has not been the case until now, and the crisis situation itself can explain it. But for the future, we must consider the political model the EU is going to adopt. This may be, as is well known, intergovernmental or communitarian. It is not clear which of the two paths is easier, and it is even less evident which enjoys more support from the European public. We have already learned the risks brought about by the elites’ wilfulness when they propose rushing headlong toward political integration. Those of us who were members of the Convention believed that the idea of a constitution would awaken the pro-European enthusiasm of the people. But suspicions about the construction of a super-European state were more important, and the project was rejected. The change brought about by the crisis has not gone in the direction of federalism. The intergovernmental logic of assistance in exchange for budgetary discipline has predominated without increasing fiscal harmonization. Since 2010, when a Eurozone member state needs financial assistance, it is not the communitarian budget that offers it. It is financed by the other governments in proportion to their own resources and controlled by their national parliaments.

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It could have been done differently, giving resources to the communitarian fund that gives financial assistance to EU countries outside of the Eurozone that have problems with their balance of payments. But there was a preference for an intergovernmental system, of which ESM is the most elaborate expression. In this way, the problems with the democratic legitimacy of EU decisions have been aggravated. Quoting Pisani-Ferry, director of the Bruegel Institute in Brussels, the problem with this system is that general European interests are not well represented, the role of the Commission is limited and the EP plays almost no role at all. The states, through the European Council, have been in charge of making decisions under Germany’s predominant role. Politics continue to be national, and decisions to contribute resources or make adjustment decisions belong to national parliaments. Every one of them responds to their national interest. They should not be reproached for that, because that is their role. As we have already stated, national interest is perceived very differently if one is standing in Berlin or in Nicosia. 10. FEDERALIZATION AND THE WEAKNESS OF THE EUROPEAN DEMOS The intergovernmental model seems to agree more with the weakness of the European demos and strong differences of identity among European people. But guaranteeing legitimacy and political control in an intergovernmental model requires complex institutional changes and difficult modifications to the Treaties. Legitimacy and Taxation Serious development of federalization requires giving the EU, or the Eurozone alone, enough of its own fiscal capability to finance European public goods and stabilize transfers. To increase the legitimacy of the EU, the EU must appear as an agent that manages “its” own resources instead of a part of the resources of the states. The EP should be able to vote to create European taxes. This would greatly increase the perception of its importance. If “no taxation without representation” was once the claim, Europe must now say “no representation without taxation.” This would be the opportunity for the EU to create truly European taxes based on the wealth generated by the very process of integration through the development of the single market. Or by taxing the type of phenomena that respect no borders but that we want to control, such as financial transactions, or that we want to combat, like CO2 emissions.

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Legitimacy and Social Dimension At the foundation of the problems of EU legitimacy, and particularly the Eurozone, we find the weakness of its social dimension. The crisis has made this lack of legitimacy worse because it has required more discipline, on the one hand, and more solidarity on the other. Both dynamics require institutions that have the legitimacy to make decisions that affect fundamentally political questions. It will be necessary to combine the two sources of legitimacy that converge in the structure of Europe, the legitimacy of the states and the legitimacy of the citizens, evolving toward a bicameral system in which the EP fully assumes the representation of the people and the EU Council assumes territorial representation. The Commission should be an executive power supported by a parliamentary majority. Its president should be elected based on the results of the European elections and should be able to name the commissioners. The number of the commissioners should be reduced. The European Parliament should have legislative initiatives. The “federal” budget for the Eurozone, notably greater than the current 1 per cent, should be based on expenses of transfers and investments of a countercyclical nature, such as the unemployment insurance on a European scale recently proposed by the IMF. This would imply breaking another taboo: that the EU cannot intervene in interpersonal transfers. It would also mean demanding an harmonization of labour policies. The mechanisms of interpersonal solidarity would relocate asymmetrical shocks, sharing costs among the entire EU. I am aware that the mechanisms of interpersonal solidarity are produced in consolidated political communities such as those found in national communities (or discussed communities, such as Cataluña today, when the national community is not resented as such). And this is not the case of the EU. Moving from a limited and conditioned solidarity among states to a solidarity among citizens requires a shared ethos. But while this is a utopic idea at this point, that is what we should be addressing when discussing the construction of a political union. CONCLUSION: A NEW RAISON D’ÊTRE FOR EUROPE It makes sense to have a single currency that demands the coordination of economic and fiscal policies in order to set up the Eurozone as a federation similar to the American model. In reality, the United States was born as a federation when Hamilton converted state debt into federal debt, which would, in part, be the effect of eurobonds. But I doubt that we are living a Hamiltonian moment in Europe at this time. Hamilton could do it because those state debts had been generated in the fight

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against a common enemy, colonial England, and twenty-first-century Europeans lack a common enemy to make us consolidate our goals. Instead, we as Europeans should consolidate our goals around a common objective that can no longer be based on avoiding a repetition of the horrors of the past but on achieving future benefits that can be perceived in daily life. As J. Habermas says, the only political project that can give legitimacy to integration and mobilize European citizens is the survival of the “social model” or the European way of life in the face of globalization. But we must be conscious that nowadays the citizens of many countries think that the EU project, particularly its economic project, has done no good in this regard and even threatens the social norms they want to defend.

FOURTEEN The Eurozone Crisis in Light of the EU’s Normativity Erik O. Eriksen

Why the emotional reactions to the European Union’s Eurozone crisis management? 1 Why such rage, why such harsh language? 2 Why the many disillusioned expectations towards the EU? After all, EU competencies in social and economic matters are miniscule. It has no competence in fiscal matters; it cannot redistribute resources, issue state bonds or print money, and it has no sovereign tax basis. The European Central Bank cannot act as a lender of last resort. All this belongs to the competency of member states. There is a structural imbalance in the internal market. Even before the crisis, monetary union, arguably, contained many gaps, inconsistencies and asymmetries (Verdun 2000; Streeck 2011; Vogl 2010; Crouch 2008; compare Lord 2012; Streeck 2013). A monetary union without a fiscal union is unsustainable. The will and the resources needed to make a common fiscal policy with redistributive measures are lacking at the European level today. A true political union is lacking. This is all well known and a result of member states’ unwillingness to grant more powers and resources to the Union. Moreover, why denounce the EU when the European Monetary Union was established in the heyday of the neoliberal zeitgeist disposed to labour market liberalization, privatization and removal of subsidies? A neoliberal economic regime in which state intervention was to be abolished has been in place since the late 1970s, initiated by Ronald Reagan and Margaret Thatcher. Monetarist supply-side programmes propagated by the Chicago School replaced Keynesian demand-side programmes. The European Monetary System was established to counter the destabi247

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lizing effects of the collapse of the Bretton Woods order, 3 when fixed exchange rates disintegrated amid the first deep postwar recession. In this new system regulation is mostly negative; it is about abolishing barriers for an effective internal market (Scharpf 1999). Already the Rome Treaty (1957) elevated the fundamental market freedoms and competition law. For many people, the EU came to be seen as an attempt to establish unrestricted competition: the unfettered circulation of capital, goods and labour and a levelled playing field. It is the member state that is supposed to provide for socioeconomic goals and social welfare. The EU’s positive competences to ensure reregulation and redistribution at the European level are close to nonexistent. Price stability, not redistribution, is a constitutional norm of the EU. The EU itself is not merely an instrument for catching up politically with economic globalization, it has contributed to it as well, given the structural neoliberal bias in its setup. The EMU was not complemented with the necessary fiscal means to handle crisis, to ‘mutualize’ debts and stimulate growth. So, why lambaste the EU for inaction and desolation? The answer is that there has been an idea of a ‘better Europe’, of peace, justice, dignity and democracy, built into this project from the very beginning. The European integration process came with a promise of posthumiliation society. Now the states find themselves entangled in a community of fate and of collectivized risks, and one which has brought domination and humiliation back. How has that been made possible? In this chapter, I address this question first by clarifying how the normativity of the EU has been institutionalized, then what has been accomplished with regard to curtailing the state of nature between the states. Thereafter, I set out some ideas as to what is lacking in order to handle the crisis in line with the normativity of the European integration process. 4 1. A POSTHUMILIATION SOCIETY The vision of a better Europe is inherent to the integration project: a Europe united on the principles of equality, freedom and solidarity reminiscent of the French Revolution. The turn to the formation of European nation-states in its wake deprived the revolution of its universalistic content. 5 Nationalism undermined the cosmopolitan potential of the humanitarian and democratic principles of the Enlightenment during the first half of the twentieth century. Europe after 1945 (and 1989) might be able to revoke them and install them at the proper level, that is, above the war-mongering international ‘system of states’. 6 European integration came with a promise of peace and democracy; of protecting European democracies from dictatorship and war, from crisis and misery. Intrinsic to the vision was the promise that power transfer would be accompanied by democratic upgrade. The citizens

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should themselves be able to influence their destiny. Even if European democracy was not initially an issue, the process itself was conducted through multilateralism and legal proceedings with democratic credentials. The integration of European states and citizens was not to be conducted through blood and iron, but in a peaceful and civilized way, through the medium of law. There is a vision of a better Europe; a posthumiliation society. Instead of the humiliating Treaty of Versailles after World War I, Germany got the status-enhancing Schuman plan after World War II. 7 Building on the idea of peace without humiliation, a process was set in motion with a view to a democratic supranational federation. A new regime of European cooperation with wide-ranging effects, and one which abolished the right of individual states to take the law into their own hands, was initiated. 8 In the words of the ‘founding father of European integration’ and the first statesman of interdependence, Jean Monnet: ‘We are starting a process of continuous reform which can shape tomorrow’s world more lastingly than the principles of revolution widespread outside the West’ (Duchêne 1994, 390). However, the will and vision of leaders do not count for much unless they are connected to action programs and mechanisms for converting them into practical results. 2. LOCKED-IN COOPERATION A particular set of lock-in mechanisms have been important in the history of European integration. Institutional path dependencies helped ‘lock in’ contended European institutions and policies (Parsons 2002). These mechanisms have firmly fixed the member states in cooperative schemes. This was the case with the very founding act of the European Coal and Steel Community (ECSC) in 1952. By the ‘communitarization’ of the material means of war—coal and steel—subjecting them to the High Authority (which later became the Commission), it should become structurally impossible to go to war. 9 The peace motive was firmly bolstered through the institutionalization of the intense interdependence between the states. In the beginning, cooperation on coal and steel locked the states into an obligatory scheme of cooperation. By the mid-1950s, when enthusiasm for supranationalism had waned, the ECSC member states created two new Communities—Euratom and the EEC—at the Messina Conference (June 1955). Cautious about the sovereignty question, the foreign ministers reinitiated the integration process by founding a general common market, which assigned new and important tasks and competencies to the established institutions of the ECSC: a council of ministers, a commission, a common assembly and a court. The common market founded by the Rome Treaty (1957), with its free movement and nondiscrimination

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clauses, imposed a new obligatory scheme, with new lock-in mechanisms paving the way for further integration. In 1987, in the Single European Act (SEA), the European Community (EC) decided to complete their internal market. This was to take place before the end of 1992 through the elimination of a wide array of nontariff barriers, including border controls, national standards, preferential procurement policies and industrial subsidies. Moreover, the SEA replaced unanimity voting—national vetoes—in the Council of Ministers. A system of majority voting over matters pertaining to the internal market was put in force. In addition, the internal market was buttressed with an elaborate and powerful legal system—EC law. This law was considered to have supremacy over national laws and to have direct effect in domestic jurisdictions, regardless of whether it was explicitly incorporated through legislation. The European communities no longer only pooled sovereignty, they increasingly shared it as well. Today this scheme has been greatly expanded by legal developments in the wake of the Treaty of Maastricht (1992) and the single market and the EMU. The latter was realized in three stages, culminating with the introduction of the euro in 1999. In the Eurozone the euro now performs a vital lock-in function. Today the states find themselves not only locked in but also entrapped in a situation of shared sovereignty and collectivized risks. Risk depicts the probability of harms that may appear in the future that we need to predict and avert at present. There is a foreseen catastrophe for everyone if the euro fails. If the euro fails, the EU fails, according to Angela Merkel. The Eurozone crisis testifies to the fact that the European integration project has—as an unintended consequence—developed into a community of risk and risk management. It now represents a densely integrated community of fate—a Schicksalsgemeinschaft in gross format for the members of the Eurozone. They are all put in the same boat, and defection would negatively affect everyone. Disagreement or gridlock on necessary measures produces system-wide effects: surging interest rates, increased debt problems and declining growth rates. With this structure, the Eurozone countries cannot opt out of the euro and simply reintroduce national currencies without severely harming their own citizens’ interest (e.g., through bankruptcy and insolvency at least in the short run) as well as those of third parties by exporting the costs of devaluation. Even the worst off will be better off with the euro than without it. Hence there is a one for all and all for one effect. In the political economy of the EU, there is an experience of a community of fate. However, there is not an experience of fate control (Offe 2013, 604). The collectivization of action capacity has not reached a level that can be grasped with present contingencies. The EU lacks powers, competences and appropriate measures of taxation and transfer. There is no European treasury. Collective action is constrained by the politics of Eu-

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ropean states, namely, their unwillingness to surrender more sovereignty (Scharpf 2010). 3. THE ACCOMPLISHMENTS The EU in many respects furthers the Enlightenment and the European civilization process—through the pacification of conflict between states, through establishing democracy between states. Koskenniemi (2006) speaks of the Kantian constitutional mindset, namely, that citizens’ political autonomy must be secured through constitutional and representative structures. This is the mindset of the French Revolution advanced by social movements and their rallying cry for social justice. Legal orders are orders of peace, and by uploading constitutional democracy to the European level, the EU contributes to the deterring of arbitrary dominance. A brutalized Europe was supplanted by a civilized one. Dignity-protecting and juridification and democratization processes, which have been underway for the last sixty years in Europe, have brought about a posthumiliation society. Today, there is in fact a superior political community to which the states are subordinate. The states cannot take the law into their own hands. The ECJ with its compulsory jurisdiction provides a novel system of compliance: the ‘all or nothing effect’ means that the states are ‘unable to practice selective application of Community obligations’ (Weiler 1982, 53, 54). This effect results in substitution of voluntary compliance (which characterizes the classical international legal order) with obligatory compliance premised on a binding judicial process. The European states have domesticated international relations among themselves and have agreed to be outvoted. This has taken place through political experiments that have resulted in the following democratic innovations: constitutional fusion, shared sovereignty, stateless government, parliamentary interweaving, and a layered public sphere (see Eriksen 2009; 2013). These innovations represent functional equivalents to state-based democracy. They make it possible to assess the EU according to democratic standards of autonomy and accountability. The EU represents an effort at establishing a distinct polity model that draws on complex links with a public sphere rooted in civil society as well as the global community. The informal and unruly streams of communication that characterize European public debate take place in scattered fora and arenas, but are not without clout and impact, hence not without democratic value. Opinion formation takes place in more than a few publics that can check each other, making up dispersed fora for selfidentification and will formation. Currently the addressees of claims making are not only the states but the EU and its power holders as well. Redistributive struggles have appeared at the European level and have

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become a distinct feature of the EU’s representative system (Statham and Trenz 2012). In a manner of speaking, the European public is being created as the protesters show their discontent with what they perceive to be the commanding heights of the European Union—in Brussels (the Commission), Frankfurt (ECB) and Luxembourg (ECJ). The European treaties have achieved the function of a superior legal structure. They establish both a unitary European citizenry distinct from national ones and a set of autonomous European bodies: the European Commission, the European Council, the Council of the European Union, the European Court of Justice and the European Parliament, which make European-wide law and are devoted to the Union itself. The EU does not possess or exercise the same degree of direct territorial control that we associate with the sovereign state. Yet the template for democratic rule is that of the modern constitutional state. This partly selfproclaimed democratic system of law making and norm interpretation at the European level, constrained by the member states, has built-in assurances, checks and balances, in order to ensure that the EU does not become a power-usurping entity—an eventual ‘world despotic Leviathan’. The EU is not a superimposed structure, a superstate of a secondorder nature, but a selectively institutionalized political body dependent on the member states’ chain of democratic legitimation. The problem with the present state of affairs is that the Union depicts not what makes a number of actors a group with some distinctiveness, a collective identity in marked difference to others, and which hence can be made a basis for solidarity and collective action. Solidarity, which means to do what is good for all of us, depends on a collective or shared identity, but this is poorly established in the EU. While the EU is founded on an abstract and formal form of justice—of justice as impartiality specified as nondiscrimination and free-movement clauses—specific bounds of solidarity are required for the formation of a collective identity enabling redistribution and socioeconomic justice. The Eurozone crisis discloses the inbuilt weakness of the system in place and the unredeemed normativity of the European integration process. 4. THE MISSING LINK With the benefit of hindsight we can see that values like peace, democracy, impartiality and dignity have been important ‘musts’ of the European integration process, and despite their indeterminate character, they have obtained a quasiempirical status and force as requirements on actors and institutions. 10 Increasingly, normative commitments are specified and entrenched in legal systems and institutional arrangements, as can be seen also in the emerging constitutionalization of the world order. The ‘musts’ of the European integration process establish normative criteria accord-

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ing to which Europeans can nominate themselves as European citizens. But in the lists of ‘musts’, there is one obvious manqué. If one compares today’s process with the French Revolution’s famous template of equality, freedom and fraternity or solidarity (as we would say today), the latter is lacking. As long as the European integration project could be portrayed as advantageous for everyone—a win-win arrangement—the citizens of Europe were not called upon in the name of solidarity. European integration is however much more than a matter of joint convenience, and normative musts have guided the integration process from its inception. The financial crisis has, though, made the integration project visibly more moral. European integration is not a matter of joint convenience and choice, but a matter of justice and solidarity. It has become a duty for the members of the Eurozone to solve the crisis. However, solidarity is in short supply: it tends to stop at national borders. There is only a weak competence and only limited resources available for socioeconomic justice; for redistribution among groups and across borders. There are structural barriers to solidarity, as there is no European liability (Tuori 2012; Menéndez 2013). Solidarity is, however, not a categorical value that can be administratively or legally enforced, as it depends on civic virtues and bonds of comradeship. Solidarity is always a gradual question of more and less. It is not an either/or category. While justice is morally required in order to safeguard the autonomy and self-respect of the individual, and while it can be achieved through impartial laws, solidarity, which also is a moral demand, has another basis and logic. According to Kant justice is formally determined, while solidarity is material. Solidarity has to do with particular goals to be attained—to reduce the misery and enhance the well-being of a group. It is related to experiences of injustice and the violations of rights and the collective we-feeling that can be mobilized in a context where commitments and ethical obligations subsist. Solidarity is a question of the will and onus of compatriots to contribute; to pay for each other’s misfortune, which depends on a common identity and a conception of the common good. Solidarity cannot be bought nor categorically decided as it springs from the felt commitments to care for affected parties, from the common interests that can be articulated, from the virtues of cooperation and relief that can be mobilized. Solidarity is the virtue that is demanded when there is a shortage of material resources to satisfy pressing needs and legitimate interests (Steinvorth 1998, 69). In solidarity discourses actors are called upon in their capacity as fellows—as compatriots, mates and companions—to do more that can be expected by norms of impartiality. Solidarity is so to say a question of supererogation, namely, of action beyond the demand of duty. This does not mean that solidarity is merely a question of altruism. Prototypically actors are called upon to help others in need through the establishment of

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a more just economic system, a better political regime or policy in the common interest. By helping the people who are now in need, you can also expect to be helped out yourself at a later point in time. The concept of solidarity thus contains a reciprocity dimension (Habermas 2013); not only in the sense that actors’ efforts may be compensed at a later stage but also in the sense that actors who succeed in establishing a more robust political and economic regime will themselves profit from this in the long run. As solidarity is a virtue, there can be no ‘right’ to solidarity. However, there is a right to socioeconomic justice. Even if solidarity is not a categorical and administratively enforceable value, the means for realizing what is claimed for justice are. Claims of justice stem both from the entanglements of the Eurozone, the many dependencies and costs and harms it has inflicted, as well as from the new forms of dominance that crisis management has brought about. 5. INTERGOVERNMENTAL DOMINANCE Today, the financial crisis, which has developed into a social, economic and political crisis, threatens to unravel the normativity of the EU by discarding the reasons for EU membership. The integration project was founded on the principle of peace and cooperation without humiliation. The manner in which the Eurozone crisis has been tackled has brought humiliation back—not only in the form of economic and social exclusion but in the form of executive, intergovernmental dominance as well. The lingering crisis, the many nondecisions, stop-go measures and austerity programs initiated by the Troika, have brought the European civilizing process to a standstill. The crisis has divided Europe and reshaped the political landscape (compare Schäfer and Streeck 2013; Streeck 2013). Naming, shaming and blaming take place among groups and states in Europe today, creating images of suppliers and spenders, of givers and receivers. Humiliation is on the rise in the wake of the economic meltdown. Exclusion from the labour market, from benefits and pensions, has consequences for self-respect and self-esteem (Margalit 1996). The Troika is dictating the austerity cure to poorer states in order to regain the trust of the financial industries. But austerity is a highly toxic medicine, an overdose of which will kill the patient. It will not stimulate growth and expand the tax base. The weakest Eurozone members become weaker and dependent on lenders. In some respects the civilizing process has even been reversed. The autonomy of the citizens and of insolvent states is being reduced and a new unaccountable hierarchy (the Troika) is making decisions with severe consequences (Smith 2013). Subjection to hegemonic forces instead of jointly made law undermines the idea of equal citizenship. In the place of comembership and codetermina-

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tion, there are arbitrary dominance and dictates. Domination designates ‘unfreedom’ in the sense that human beings are in the power of others. Domination is rule without justification. It carries the ‘whiff of illicitness’ (Shapiro 2012, 307ff). The right not to be arbitrarily dominated is however a fundamental one. Nondomination is the essence of justice. In the light of the EU’s normativity and the ethos of the integration process, the reactions to the crisis management of the Eurozone—the strong emotions this triggers—are easy to comprehend. We can understand the reactions to the handling of the present crisis, the outcry of betrayal and loss of mission. For many the promise of a democratic, dignity-protecting Europe does not hold any longer. It has been broken by the inability to handle the exacting demands of debt, rising borrowing costs, unemployment and structural imbalances between the countries through authorized and democratically accountable bodies. Old-fashioned power politics have kicked in and people are humiliated—they suffer from exclusion and new forms of dominance. Democracy has degenerated into technocratic rule. Millions of European citizens are disenchanted as heteronomy replaces autonomy, which is the case when dictates substitute cooperative law making. The economic meltdown of the Eurozone effectively demonstrates common vulnerabilities and the degree of affectedness and global interdependence that has been reached. It also makes clear that some are profiting and others are suffering under the same economic regime, which justifies the call for solidarity among winners and losers of the integration project. Those that have made the monetary union or gained from it have a duty to mend it. The meltdown also makes clear that a monetary union without political union is futile and makes a country fiscally fragile. As the member states of the Union change from being classical ‘tax states’ to ‘debt states’, they become ever more defenceless to the whims of the financial markets (Streeck 2013). More fundamentally, the present European economic crisis raises a normative claim of democracy, as there is a question of authorization— who is authorized to make binding collective decisions—as well as a question of accountability: Who can be held responsible, through which fora and which institutions, and which consequences should they face ? Citizens and states all over Europe (and beyond) are deeply interwoven and affect each other’s well-being and freedom in profound ways. Greece’s present financial situation is the problem of all Europeans. Those actors who are adversely affected require answers, and they require that the rules they are supposed to observe be observed by those in power. Actors and institutions are responsible for the consequences of their willful actions. Affected parties are owed explanations, justification and compensations when they are malignantly affected (Habermas 2012, 298). At the bottom of every social crisis and political disaster lies the question of justification: why should we suffer from other people’s mis-

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management, why should we pay for other people’s recklessness and misbehavior? Someone should be held accountable for the effects of bad choices, misbehaviour and institutional inertia. Only a system of democratic rule can ensure proper authorization, compliance and accountability. From its very initiation, the EMU was supposed to be accompanied by a parallel move toward European political union. A lack of unity, of solidarity, of a collective we-feeling; of unwillingness to surrender national sovereignty have been held as the main obstacles to further integration. A collective identity is held to be needed to overcome the collective action problem and to bind the elites to the voters. 6. A POWERFUL STATELESS UNION The question is whether a fiscal union and redistribution can come into place without statelike punitive measures at the European level. In short, can there be a transfer Union without a state? Institutions compel actors to act against passion and self-interest. Strong institutions are needed to control financial markets and tax havens and to reallocate resources. It is generally agreed that a monopoly of power is needed to levy taxes and enforce redistribution. Nobody pays voluntarily, the saying goes, and even less so when not everybody contributes the same amount and to the same degree. The challenge, according to Majone (2013), is to resolve the contradiction of the Eurozone, which requires the punitive and solidaristic resources of a state but is situated within a construction in which members are neither sovereign states nor members of a federation. The EU may not be a state, but it undertakes many functions of a state. Authoritative institutions equipped with an organized capacity to make binding decisions and allocate resources are in place at the European level. The EU possesses well-developed legislative, judicial and executive functions and has obtained competencies and capabilities that resemble those of an authoritative government. Its institutional setup is complex, but ‘still it legislates, administers and adjudicates; the legitimacy of these processes also has to be assessed according to the same standards that one would apply to any government’ (Chalmers et al. 2006, 87). The EU has expanded its realm of competence and has developed into a polity with: • • • •

an institutional arrangement with representative qualities; an organization with competences and capabilities of its own; treaties with basic rights protection as a proxy for a constitution; transparency provisions and popular consultative mechanisms; and • a corresponding nascent intermediary structure of civil and political organizations.

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Even though the EU lacks the distinct state form, it amounts to a government which binds the legislator in the making of law itself. The term government refers to the political organization of society, and to the fact that a state is not merely a Hobbesian coercive order, as Weber’s famous definition suggests. It is an expression of common will and public opinion as well. Government refers to the authorized body within a system of rule that has the power to make and enforce rules, laws and regulations. It refers to the political organization of the community and its legitimacy basis; a nonstate conception of a legally constituted community. The characteristic feature of governmental power is not coercion, but the ability to act in concert and to be recognized within a legal framework (MacIver 1928). The EU is embedded in a political culture and premised on a common constitutional complex; on the values and democratic practices widely shared by Europeans. This normative infrastructure lends legitimacy to the proceedings and collective decision making of the postnational Union and constitutes a vital part of the common self-understandings of the citizenry. When entrenched in such a legally regulated sphere, we could conceive of the state not as a dichotomous variable but in terms of degrees of stateness—on a continuum, with the autarchic state and the world society as endpoints. Means of coercion for protecting rights and realizing collective goals would be shared between levels. Within such a framework, the EU could claim legitimacy for its decisions by referencing the legal form they are dressed in, rather than some form of collective identity and superiority. 7. GROUNDS FOR INTEGRATION On the basis of the normativity of the EU and the institutional makeup of euro-polity, one may claim that neither the penal state nor an external foe or a collective identify is needed to get a fiscal union in place and operative. This is so for the following reasons: First, solidarity as well as European identity has almost always been in short supply in Europe, but this has not prevented the EU from growing in size and competence over time. The EU has developed into a power-wielding entity, with the Treaties as a proxy for a constitution and with political-representative institutions. European law is observed all over Europe. The EU is a statelike organization, which could be a trigger for egalitarian standards of justice. Second, the Eurozone has brought the members into a community of fate, in which all are dependent on all, and where some are profiting and some are suffering from the same economic regime. There are thus reasons for solidarity. Collective European action is not beyond the demands of duty.

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Third, there are some signs of a transfer union as the ECB increasingly has stepped in as lender of last resort of sovereigns, and the financial sector is being stabilized by the slow creation of a banking union. A fiscal union is no longer a utopic idea. Fourth, the idea of a fiscal union has in fact turned into a strategy for solving the crisis. ‘What a (currently shrinking) minority of EU enthusiasts among elites and non-elites would dream of for many years in terms of deepening the integration process, has suddenly, under the impact of the crisis turned into a roadmap for an urgent rescue operation that makes the empowerment of fiscal and economic governing capacities at the EU level a plain imperative’ (Offe 2013, 599). Is it feasible? The choice is between a just union and a bust continent, to paraphrase Barry’s response to the question of whether social justice is economically and politically feasible (2005, 261ff). Solidarity has become a functional must in the sense that it is needed to solve the Eurozone crisis. Along these lines, Offe (2013, 602) states that bailing out Greece (and now Cyprus), to say nothing about Spain, Portugal and Italy through debt mutualisation, Eurobonds, . . . would have to be paid through inflation or/and increase budget deficits in the North. That is to say, it is extremely unpopular in countries. . . . The only argument to possibly convince ‘northern’ voting publics that burden sharing . . . is still an acceptable idea is the argument that failing to do so might be even more expensive.

It is thus in Germany’s and others’ self-interest to rescue the Euro, to mutualize debt and bail out the insolvent ones. Further integration has become a ‘must’. What is more, the normativity of constitutional democracy, which has hitherto lent legitimacy to previous steps of integration—the proceedings and collective decisionmaking procedures of the Union—could also pave the way for more integration. Further integration depends now as previously on the will and capability at the member state level to bring it about. Requisite measures require leadership, will and competence, and nothing will happen without popular mobilization. Traditionally, nation class, and common memories of heroic pasts are used as unifying forces able to mobilize for collective action. But shared traumas and misfortunes can sometimes also be as effective in mobilizing for socioeconomic justice as for extra duty efforts. Claims making along such lines flourishes today due to the European-wide democratic infrastructure. In other words, the conditions for rallying for social justice and solidarity are in place today in Europe, not only because of shared misfortunes and adversely affected parties, but also because the rule-of-law principle is entrenched, there is a formal right to political participation and ‘power-free’ spaces for public debate (and rebellion) exist. The constitutional essentials necessary for opinion formation and collective will for-

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mation to come about are established at the European level. What the liberal state made possible at the nation-state level in the eighteenth century are today established beyond it: a sphere where private people can come together as a public to confront the power holders with their mandate (compare Habermas 1962). 8. LEADERSHIP AND RESOLVE The urgency of issues, the dire economic, social and political conditions in many countries, call for immediate action in order to establish a fiscal union on constitutional grounds. While Kant (1785) in his Groundwork of the Metaphysics of Morals holds ‘there is no war’ as a ‘veto’ of practical reason, one may today say that the same reason dictates integration. Further integration is a categorical imperative. This reminds us of the importance of leadership and resolve, which the integration process has depended on most of the time. As we learn from Haas (1958), the integration process in the formative years took the form it did because of the French government. The Community model, rather than the intergovernmental one, was chosen because of the French. Had the latter been chosen, Europe would reflect the rule, not the exception, in international relations, ‘through which the member states still would have to solve problems through diplomatic means’ (Parsons 2002, 48). In other words, if the French had not insisted and put their view through in the 1950s, there would not have been a supranational community but an intergovernmental arrangement in Europe. The strife that is thriving today and which is due to the crisis and the lack of a political union with clout and competence would have been the normal situation. Intergovernmental power politics have become abnormal in today’s Europe. This is a pertinent reminder both of Weber’s insight that leaders’ ideas are an autonomous causal factor that select from a set of structural options and a decisive factor for action. One should not forget that without Adenauer’s resolve, the Schuman Plan would not have materialized (Milward 1984, 390). The ECSC Treaty was a hard-won ratification (Closa 2013, 92ff). One cannot possibly know whether there is any chance that requisite action will be taken in due time. Churchill preserved his optimism regarding the Americans in dreadful times, believing that they would do the right thing in the end (i.e., when all other options had been tried). Likewise, what has come to be known as Monnet’s law reads: ‘People only accept change when they are faced with necessity, and only recognize necessity when a crisis is upon them’ (Monnet 1979, 109). Catastrophe lurks without resolute action: a deeply divided continent leaving millions in misery and utmost poverty is a possible outcome of a solution with lax measures. 11

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CONCLUSION European citizens are humiliated by the way in which European institutions treat them in handling the Eurozone crisis. Social and political exclusion and technocratic rule contradict the normative thrust of the European integration process. Nondomination is the crux of justice and goes to the core of EU normativity. Through lock-ins and normative commitments, the EU’s member states and in particular the Eurozone members have accidentally moved themselves into a situation of collectivized risks and shared sovereignty. The cunning of reason is so to say at work in the sense that there are spillover effects necessitating new integrative moves. A principle of solidarity is institutionalized behind citizens’ backs. This is the reason why further integration has become a functional must—a tool for solving the crisis—as well as an obligation for justice: the countries that have made the monetary union and reaped its effects have a duty to mend it. Establishing a European political union has become both a duty and a strategy for solving the crisis. BIBLIOGRAPHY Barry, Brian. 2005. Why Social Justice Matters. Cambridge: Polity Press. Beck, Ulrich. 2013. German Europe. Cambridge: Polity Press. Chalmers, Damian, Christos Hadjiemmanuil, Giorgio Monti and Adam Tomkins. 2006. European Union Law. Cambridge: Cambridge University Press. Closa, Carlos. 2013. The Politics of Ratification of EU Treaties. London: Routledge. Crouch, Colin. 2008. Postdemokratie. Frankfurt am Main: Suhrkamp. Duchêne, Francois. 1994. Jean Monnet: The First Statesman of Interdependence. New York: W. W. Norton & Co. Eriksen, Erik Oddvar. 2009. The Unfinished Democratization of Europe. Oxford: Oxford University Press. Eriksen, Erik Oddvar. 2013. The Normativity of the European Union. London/New York: Palgrave. Haas, Ernst B. 1958. The Uniting of Europe. Stanford, CA: Stanford University Press. Habermas, Jürgen. 1962. The Structural Transformation of the Public Sphere. Cambridge, MA: MIT Press. Habermas, Jürgen. 2012. Nachmetaphysisches Denken II. Berlin: Suhrkamp Verlag. Habermas, Jürgen. 2013. Im Sog der Technokratie. Berlin: Suhrkamp Verlag. Kant, Immanuel. [1785] 1996. ‘Groundwork of the Metaphysics of Morals’. In Practical Philosophy, edited by Mary J. Gregor, editor. Cambridge: Cambridge University Press. Koskenniemi, Martti. 2006. ‘Constitutionalism as Mindset: Reflections on Kantian Theme about International Law and Globalization’. Theoretical Inquiries in Law 8(1): 9–36. Lord, Christopher. 2012. On the Legitimacy of Monetary Union. SIEPS Report No. 3. Stockholm: Swedish Institute for European Policy Studies. MacIver, Robert M. [1928] 1964. The Modern State. London: Oxford University Press. Majone, Giandomenico. 2013. ‘A General Crisis of the European Union’. Paper presented at the conference Europe in Crisis: Implications for the EU and Norway. Oslo, 14–15 March 2013, unpublished paper.

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Margalit, Avishai. 1996. The Decent Society. Cambridge, MA: Harvard University Press. Menéndez, Agustin José. 2013. ‘The Existential Crisis of the European Union’. German Law Journal 14/5: 453–525. Milward, Alan S. 1984. The Reconstruction of Western Europe 1945–51. London: Methuen. Monnet, Jean. 1979. Memoirs. Garden City, NY: Doubleday. Offe, Claus. 2013. ‘Europe Entrapped: Does the EU Have the Political Capacity to Overcome Its Current Crisis?’. European Law Journal 19/5: 595–611. Parsons, Craig. 2002. ‘Showing Ideas as Causes: The Origins of the European Union’. International Organization 56/1: 47–84. Rodrik, Dani. 2011. The Globalization Paradox: Democracy and the Future of the World Economy. New York: W. W. Norton & Co. Schäfer, Armin, and Wolfgang Streeck, eds. 2013. Politics in the Age of Austerity. Cambridge: Polity Press Scharpf, Fritz Wilhelm. 1999. Governing in Europe: Effective and Democratic? Oxford: Oxford University Press. Scharpf, Fritz Wilhelm. 2010. ‘The Asymmetry of European Integration, or Why the EU Cannot Be a “Social Market Economy”’. Socio-Economic Review 8/2: 211–50. Shapiro, Ian. 2012. ‘On Non-domination’. University of Toronto Law Journal 62/3: 293–336. Smith, Dennis. 2013. ‘What Kind of Crisis in Europe? Debt, Disequilibrium and Displacement’. Paper presented at the conference Europe in Crisis: Implications for the EU and Norway. Oslo, 14–15 March 2013, unpublished paper. Statham, Paul, and Hans-Jörg Trenz. 2012. The Politicization of Europe: Contesting the Constitution in the Mass Media. London: Routledge. Steinvorth, Ullrich. 1998. ‘Kann Solidarität erzwingbar sein?’ In Solidarität—Begriff und Problem, edited by Kurt Bayertz. Frankfurt am Main: Suhrkamp. Streeck, Wolfgang. 2011. ‘Crises of Democratic Capitalism’. New Left Review 71 (September–October): 5–29. Streeck, Wolfgang. 2013. Gekaufte Zeit: Die vertagte Krise des demokratischen Kapitalismus. Berlin: Suhrkamp. Tuori, Kaarlo Heikki. 2012. ‘The European Financial Crisis—Constitutional Aspects and Implications’. EUI Working Papers, LAW 2012/28. Florence: European University Institute. Verdun, Amy. 2000. European Responses to Globalization and Financial Market Integration: Perceptions of Economic and Monetary Union in Britain, France and Germany. Basingstoke, UK: Palgrave MacMillan. Vogl, Joseph. 2010. Das Gespenst des Kapitals. Zürich: Diaphanes Verlag. Weiler, Joseph H. H. 1982. ‘Community, Member States and European Integration: Is the Law Relevant?’ Journal of Common Market Studies 21/1: 39.

NOTES 1. (This chapter draws on Eriksen 2013.) Today’s European Union began as the European Economic Community in 1958 and was renamed the ‘European Union’ by the Maastricht Treaty, formally, the Treaty on European Union (TEU), which entered into force in 1993. For convenience I use the expression ‘EU’ to describe the whole period. 2. See Beck 2013, compare ‘Habermas, the Last European: A Philosopher’s Mission to Save the EU’, Der Spiegel Online, 25 November 2011, available at http://www. spiegel.de/international/europe/habermas-the-last-european-a-philosopher-s-missionto-save-the-eu-a-799237.html (accessed 7 March 2014). See also ‘We Are Europe! Manifesto for Re-building Europe from the Bottom Up’, initiated by Ulrich Beck and Daniel Cohn-Bendit, available at http://manifest-europa.eu/allgemein/wir-sind-europa?lang= en (accessed 7 March 2014).

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3. The Bretton Woods Agreement was based on consensus about the value of controlling capital, viz., to protect the effectiveness of domestic policies that were threatened by the free movement of capital across borders (Rodrik 2011, 93). 4. This chapter draws extensively on Eriksen 2013. 5. This gave sixty million people a state of their own, leaving about twenty-five million as minorities within their ‘own’ territories. 6. Thucydides pointed out that in international relations the strong do what they want, while the weak endure what they must. 7. According to EP president Martin Schulz, it was a ‘Schuman plan instead of a Treaty of Versailles’. See ‘Our Mothers, Our Fathers: Next-Generation WWII Atonement’, Spiegel Online International, 28 March 2013, available at http://www.spiegel.de/ international/germany/zdf-tv-miniseries-reopens-german-wounds-of-wwii-past-a891332.html (accessed 7 March 2014). 8. The EU’s rejection of reciprocity and interstate countermeasures is demonstrated in a series of foundational judgments by the European Court of Justice. 9. This is not to say that lock-ins explain the establishment of ECSC. Rather they, and the competency traps that came with them, constituted vital preconditions for its materialization. 10. We detect them in claims-making processes, in processes of contestation and politicization, as well as decision-making premises in legal and political documents. 11. See the report by the International Federation of the Red Cross and Red Crescent Societies Think Differently Humanitarian Impacts of the Economic Crisis in Europe, available at http://www.ifrc.org/PageFiles/134339/1260300Economic%20crisis%20Report_EN_LR.pdf (accessed 14 March 2014).

FIFTEEN Beyond the Markets Citizen Participation and Social Progress for a More Popular and Inclusive Europe Beatriz Pérez de las Heras

2013 was declared “The European Year of Citizens.” This celebration was meant to commemorate the twenty years that have transpired since the Maastricht Treaty introduced the “Citizenship of the Union,” a new civil status of a supranational nature, something previously unprecedented on the world stage. Since then, it has supplemented and complemented the statutes of national citizenship. This status of citizen of the Union, with the rights it conveys, has not evolved fundamentally in these last two decades, and, furthermore, it is still connected to nationality in a member state. In spite of all that, this statute continues to hold enormous political significance, since it visibly and unquestionably constitutes a first step toward a future European state. 1 For the time being, however, Europe is still in the process of being constructed and its citizens, its future demos, have never before been as distanced from the European political project. The economic recession and the social consequences of the budgetary adjustments required of member states have pushed citizens and the EU further apart. Citizens expect answers and solutions from the EU that will provide hope and the potential for prosperity. Until now, the continuous and severe austerity measures have only generated more unemployment and social impoverishment. More concerning still are the symptoms that demonstrate that the crisis the EU is confronting is not merely economic, 263

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but also affects its credibility as a blueprint for political union, eroding some of its fundamental values, like solidarity and social inclusiveness. Under these circumstances, it is understandable that a profound pessimism, combined with enormous popular dissatisfaction, is running through the veins of Europe. In the context of the current economic recession, European political leaders are immersed in a constant dynamic of adopting harsh adjustment measures to calm the markets and contain risk premiums. These actions are probably necessary to escape from the financial crisis, but not sufficient in and of themselves to make progress on political integration. We cannot construct a federal Europe or any political community through the markets. Europe needs citizens who support and give legitimacy to a future European government and to some supranational institutions. However, given current circumstances of popular disillusionment, how can we reconcile citizens with the EU? Beyond the euro crisis, how can the EU continue the path toward political union that began sixty-three years ago? On the basis of these considerations, the first section of this chapter will analyse the reasons for the profound chasm that currently separates citizens and the EU, emphasizing that it is not the crisis itself as much as the management of the crisis on the part of the multiple actors who intervene in the name of the EU that constitutes the principal factor in explaining the Euro-scepticism shared by European citizens. Based on this diagnostic, the second section identifies the legislative initiative and the next European elections as elements that, in the short term, could help reverse not only this collective feeling, but the ways of constructing Europe. Finally, a third section proposes reforming the Treaties to delve more deeply into political union, arguing that the return to a more social Europe, as a fundamental axis of constitutive modifications, is the only credible narration that will allow citizens to support progress toward a political union. 1. THE DIAGNOSTIC: EURO-SCEPTICISM HAS BECOME A FEELING OF EUROPEAN IDENTIFICATION The management of the current crisis by European political leaders has raised the level of legitimacy that the EU needs in order to recuperate its credibility and confidence in the eyes of citizens. Citizen perceptions of the EU have been eroded by the bankruptcy of the welfare state and the breakdown of European solidarity and values through the belief that the application of austerity measures at all costs is the only possible response.

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There has been much discussion of the mistakes in the management of the crisis that have had direct repercussions for the citizens of some member states. We can recall, for example, how the Eurogroup itself came to question the guarantee of European banking deposits on the occasion of the Cyprus bailout, 2 or when the International Monetary Fund recognized that it had erred in the calculation of the Greek bailout. 3 These mistakes on the part of those who claim authority to resolve the crisis have not only damaged EU confidence but have placed in question the democratic legitimacy of this type of decision. The legal foundation for adopting these measures is not always clear. With the exception of austerity and the measures aimed at reducing public expenditures and sovereign debts, nothing seems to come from the EU, in the ever expanding perception of European citizens. In these circumstances, it is not surprising that Euro-scepticism and Euro-pessimism have become widespread. One of the last public opinion polls realized by the Eurobarometer demonstrates the notable increase in citizen pessimism since 2009. Portugal takes the lead, with a 23 per cent increase, followed by Sweden (20 per cent), Spain (17 per cent), and Cyprus (15 per cent). 4 The management of the crisis demonstrates a profound weakness in the functioning of the EU, not only in the degree to which citizens are included in the decisions that affect them, but also from the institutional point of view and from the perspective of the decision-making procedures that are being observed. The Council, which is on the periphery of national governments, does not answer to anyone for its decisions. The European Central Bank (ECB) and the Eurogroup impose strict adjustment measures whose primary objective is to calm the markets, while the national governments of failing states have no choice but to accept the dictated measures, in spite of never having formally transferred their budgetary and economic authority. The Commission has lost visibility and identity in the context of the current crisis and, when it emerges, it does so accompanied by the ECB and the IMF, with which it constitutes the Troika, a body not legally identified in the Treaties. The European Parliament (EP), which represents the citizens, and the Court of Justice of the EU, which embodies the control of legality, have disappeared. In short, it is the technocracy, not the democracy, which is currently managing the crisis and, therefore, running Europe. Additionally, it can be established that these current configurations of governance are not affording definitive solutions for the crisis and its consequences. Its ineffectiveness at guaranteeing essential public goods (employment, pensions and public health care, housing, education, etc.) discredits political leaders and institutions, at the same time as the lack of democratic legitimacy leads to the discrediting of their policies. All these shortcomings detract from the very idea of European political unity and distance citizens more and more from the European project.

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In addition to that, we must address a new, unsettling tendency: the clash of conflicting feelings between the citizens of the central and northern European member states and those from the south and periphery. For the latter group, the EU represents a straitjacket, the belt that squeezes and suffocates them until they are left destitute. For the first group, the Union has not known how to control the southern states’ budgetary waste, which they now have to defray with their taxes. In this context of opposing perceptions, it is not surprising that in May 2013 a group of thirty-five thousand Germans appealed to the constitutional court of their country the legality of an ECB program of Outright Monetary Transactions. This initiative, approved in September 2012, is meant to allow the monetary institution to buy unlimited amounts of debt in the short term for Eurozone countries with financing problems, always with a corresponding commitment to budgetary consolidation and structural reforms. It is not the first time that the federal court has been called upon to make a ruling on the compatibility between the German constitution and a measure adopted to help failing countries and, consequently, their citizens. 5 If the federal high court were to conclude in this case that the ECB has overstepped the limits of its mandate, the bond program could be declared contrary to Bonn’s Basic Law, in which case Germany would not be required to implement it (Siekmann and Wielan 2013). But citizen disillusionment and loss of confidence are not only unleashing social demands of all kinds in numerous countries but are also exacerbating extreme positions, such as those expressed by Europhobic, xenophobic, and antigovernmental movements, which represent the polar opposite of the values of solidarity and diversity on which the European political project has always been based. 6 Therefore, no far-reaching measure that is proposed to help us emerge from the crisis can be legitimately carried out without the active support of European citizens. Legitimacy based on participation and citizen consent also affords a guarantee of effectiveness for the actions taken to address its needs. Therefore, beyond calming market turmoil, one of the political priorities that the EU should address as a solution to the legitimacy crisis that besieges it is the reinforcement of citizen participation. It is time to build Europe from the bottom up; otherwise, the edifice that is being built runs the risk of collapse. But how do we promote direct citizen involvement with the current state of collective pessimism and social misery? 2. REVERSING THE TREND: A MORE PARTICIPATORY AND INCLUSIVE EUROPE In the short term and without reforming the constitutive texts, one can take advantage of some of the mechanisms available in the Treaties to

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stimulate a more active European citizenry. Among these instruments, the European legislative initiative stands out for its unquestionable democratic transcendence. 7 At the same time, the upcoming European elections and the institutional changes that coincide with that occasion afford citizens, beyond direct political participation, with the opportunity to get involved in the choice of a new political direction for the EU. This institutional renovation could become one factor in energizing what is habitually low voter turnout. European Legislative Initiative: An Opportunity to Participate in the Legal Construction of a More Plural and Unified Europe Among the innovations of a democratic nature that the Treaty of Lisbon introduced, the European legislative initiative stands out without a doubt. This popular prerogative is not identified strictly as a right of citizenship, since it is not part of the small list established in articles 20–24 of the TFEU. Instead, it is confirmed as essential to the principle of participatory democracy in article 11.4 of the TEU. This provision specifically foresees that a group of “not less than one million citizens who are nationals of a significant number of Member States may take the initiative of inviting the European Commission, within the framework of its powers, to submit any appropriate proposal on matters where citizens consider that a legal act of the Union is required for the purpose of implementing the Treaties.” The European legislative initiative has been available since 1 April 2012, the date on which regulation (EU) 211/2011 of 16 February 2011 took effect, specifying the conditions and procedures for its use. 8 In this regard, we should remember that, as a minimum quantitative requirement, there much be a million signatures from citizens from at least seven different countries. Additionally, each member state must obtain a minimum number of signatures, the quantity of which is specified, per member state, in annex I of regulation (EU) 211/2011. Finally, the proposal should be promoted and registered by an organizing committee of at least seven people from different member states. As for essential qualitative requirements, the proposal should be framed within the EU’s area of competence, in which, additionally, the European Commission has the power to present a proposal for a legal act or formulate proposals for juridical acts. 9 There are many materials on which the Commission has the power of normative initiative. 10 However, with the Treaties that are in force, the EU and, therefore, the Commission, has a limited ability for political decision making and normative regulation in areas that are particularly sensitive for citizens in light of the current crisis, such as social policies, employment or public health care, among others. 11

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There is discussion about whether the ability for legislative initiative can be used to propose reforms to the Treaties, which could be very opportune at this time, specifically to delve deeper into a more social Europe with more solidarity. Some believe that this measure can only serve to formulate proposals of normative, but not constitutive, development. In this chapter, however, we will maintain a different opinion based on a literal reading of article 11.4 of the TEU and regulation (EU) 211/2011. Their joint analysis does not support any legal objection to proposing a reform of this type, since, on the one hand, the modification of the Treaties can be considered in and of itself a necessity for achieving EU objectives and, on the other hand, the Commission has the ability to propose plans to revise the Treaties to the Council, either through the normal procedure for revision (art. 48.1–5 of the TEU), or through the simplified procedure of article 48.6 of the TFEU. This last procedure is exclusively applicable to the third part of the TFEU on policies and actions of the EU. 12 In any case, beyond the legal debate, nothing prevents citizens from floating proposals to encourage the Commission to propose constitutive modifications sooner and to articulate a legislative blueprint based on the modifications. With this potentiality, the European initiative could exceed its function of citizen participation in the normative development of the Treaties, becoming in that way an instrument of political innovation. 13 This mechanism of public participation thus offers enormous potentiality and affords new opportunities to overcome the current lack of popular support for the process of European political construction. Requiring the participation of a minimum number of signatories from a minimum number of states will give rise to transnational dialogue among citizens, organizations and social movements, and that development could lead progressively to the configuration of a European public space beyond national political spaces. In addition, the exercise of the legislative initiative creates a direct connection between the Union and citizens by allowing citizens to participate in the process of the political and legal construction of Europe, which, in turn, reinforces the legitimacy and responsibility of the Union before its citizens. Lastly, any minority or disadvantaged group of citizens is empowered to push a legislative initiative in his or her respective state. As a consequence, this participatory instrument can help reinforce social cohesion and pluralism in the EU (Schnellbach 2011). The legislative initiative will need time and experience to develop and be consolidated. If it is well channelled and managed, this mechanism of participatory democracy could be transformed into a powerful factor that contributes to creating a European civil society, whose absence from the political debate and decision making is one of the factors explaining the

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EU’s current crisis of efficacy and legitimacy (Bordino 2013; Kurki 2012; Sigalas 2013). European Elections and the Renovation of Institutional Design: A New Political Direction for the EU The European elections of 2014 will be the first to be held since the Treaty of Lisbon went into effect. This perspective brings about an enormous challenge, not only for the EP and the European political parties, but for the EU as a whole, given the “euro-disappointment” that fills the citizenry at this time. The upcoming European elections coincide with institutional modifications that should be implemented before November 2014, according to the previsions of the Treaty of Lisbon. 14 This timeline of institutional changes creates a situation favourable to opening a process of more substantial reforms that reinforce the EU as a democratic political organization, in line with the proposals we will describe in the following section. However, in this section, we will focus only on certain modifications that could be introduced more quickly, without needing to revise the Treaties. These would contribute to the configuration of a more genuinely European political space, simultaneously affording additional democratic value to the upcoming European elections. One of these new ideas would consist of visibly highlighting the connection between the candidates presented by national political parties and the European parties to which those same national groups are attached. According to article 10.2 of the TEU, the mission of European political parties is to contribute to “forming European political awareness and to expressing the will of citizens of the Union.” However, as a general guideline observed in the majority of the states, European political groups do not tend to manifest visibly in electoral campaigns, so the EP elections end up being a type of additional national election, where what is truly in play is the relative weight of national political forces. For the 2014 elections, the EP itself has required that member states and political parties include on the ballots the name of the European group to which they are attached, with its corresponding logo, next to the names of the candidates and of the national party. 15 If this inclusion on the ballots is properly implemented, the more explicit connection between the candidates, national parties and European political groups will shift greater responsibility to all the political forces that participate jointly in the electoral process, simultaneously making it easier for citizens to perceive the true transnational dimension of the election and the European significance of their vote. Holding elections on the same day in all the member states will also help reinforce the European dimension of this election. An authentic Eu-

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ropean electoral day will better reflect the collective participation of the citizens of the Union. 16 Another modification, of greater democratic scope, whose introduction is also planned for the upcoming European elections, would consist of having the EP name the president of the Commission after every election. 17 To this end, every political party should propose its respective candidate for the 2014 elections, and the person whose party receives the most votes will be elected. 18 In its 4 July 2013 resolution, the EP confirmed that the names of the candidates who run for the position of president of the Commission should be included on the ballots, as well as the names of the national party and of the corresponding European political party that is proposing the candidate. The hope is that candidates will also play a visible role during the electoral campaign, explaining their respective political programs in all member states and participating in public debates. This eventual election of the president of the European executive branch by direct universal suffrage will notably reinforce the democratic legitimacy of the presidency; it will bring the European Commission closer to citizens and confer an authentic political mandate, beyond its predominantly technocratic character. It could also become a motivating factor to encourage better turnout than European elections have traditionally had 19 and simultaneously incite political parties to assume a more European profile when they have to compete for control of the European Commission. There are some proposals that even point to the convenience of unifying the presidencies of the European Council and the European Commission, also with a view to the upcoming European elections. This eventual fusion of its highest political representation would reinforce the democratic legitimacy of the EU, as well as its political identity, in the internal realm and in its international projection. This change could also be realized without specific modification of the Treaties that are in force today. 20 The European Council would need to designate the candidate coming from the party that received the most votes in the European elections, who would thus end up elected by the EP as president of the European Commission and the Council (Chopin et al. 2012). In any case, if the president of the Commission is elected by the European citizens, the rest of the members of the Commission should also be elected and named by the EP itself. This would be consistent with this new process of politicization of the Commission (Decker and Sonnicksen 2011). The naming of the European executive by the institution that represents the citizens would reinforce the democratic legitimacy of the Commission as a whole and, therefore, of the legislative processes that the Commission is in charge of promoting. However, the introduction of this last change would require a formal revision of the Treaties, particularly, article 17.7 of the TEU, which establishes the designation of the

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members of the Commission by the Council, in common accord with the president elect, based on the list of candidates proposed by the member states. If these institutional innovations are carried out, the upcoming European elections could end up being something more than the traditional citizen exercise of electing representatives to the EP. They would also establish, for the first time, a new, more democratic political direction for the EU, in which the citizens can elect the future president of the European executive branch and also, eventually, its maximum political representative. European political parties can play a key role in this process of institutional renovation. The interconnectedness between European and national politics can only be legitimately realized through European political parties that compete among themselves at a transnational level and shape a genuinely European political space with which the citizens are identified and where they give their consent to the implementation of supranational policies (Levi 2013). Finally, other institutional changes that would undoubtedly introduce the citizens to a greater degree of EU political responsibility to the citizens’ eyes would be EP approval of the candidate elected by the European Council as president of the ECB, the recognition of the full legislative initiative of the EP and the extension of the EP’s power of control to areas such as common foreign and security policy and economic policies. However, the introduction of these modifications would require specific reform of the Treaties. In spite of that, considering the current state of social disintegration, no innovation, no matter how much democratic profundity it carries, will be sufficiently attractive in the citizens’ viewpoint if it does not go hand in hand with a relevant political dimension that incorporates the European project as a whole. 3. NEXT STOP: POLITICAL UNION The only viable alternative to stanch the deep social wounds opened by the euro crisis is to move toward political integration in Europe. The last two years have been especially intense with debates and examinations about the path to follow to delve deeper into European construction. Numerous think tanks, experts and even some politicians and European leaders agree that a continental political union could be very beneficial to more effectively resolve the problems that currently affect millions of Europeans, as well as allowing the EU to confront large global challenges on the international stage with a single, influential, and legitimate voice (Chopin et al. 2012; Pernice et al. 2012; Bonino 2013). 21

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However, to arrive at this phase of political integration, the states would need to cede sovereignty, and the citizens would have to consent to it through respective constitutional procedures. Throughout the sixtythree years of European construction, the states have been transferring normative and judicial authority, not sovereignty itself, although in practice they are no longer fully sovereign, as a direct consequence of this gradual process of political relinquishment. Therefore, in the current state of European construction, it is difficult to imagine a leap toward integration on this scale. However, very significant intermediate steps can be taken in this direction, such as the realization of a banking union, a fiscal union and an economic union, measures of political integration that should have accompanied the monetary union from the first. The banking union is a fundamental measurement for the achievement of an authentic economic union. One of the key pillars of its current design is banking supervision, a function that the ECB itself will assume. As a notable element of democratic legitimacy, European regulations establish important safeguards of accountability on the part of the issuing institution to the Council and the EP. That institution will also be responsible for approving the naming of the president and vice president of the supervisory organization. 22 After overcoming a not insignificant number of reservations and numerous discrepancies between the member states, the banking union could begin operating finally in mid-2014. It does not, however, eliminate the need to reform the Treaties to solidify this prointegration achievement in a sustainable manner, since some of the key pieces upon which it is designed are currently framed in the area of state authority. 23 It will also take some time for the fiscal Union to be implemented, if articles 113 and 114 of the TFEU are not modified first. These articles require unanimity for the Council to approve any measure of tax harmonization. The economic union will require a European economic government, with someone who is clearly responsible for the economy, which could be one of the future vice presidents of the European Commission. It seems this person will acquire the current functions of the commissioner for Economic and Monetary Affairs and the president of the Eurogroup. In addition to providing greater democratic legitimacy to this second organization, the person responsible for the economy would be the visible face and the political voice of the EU both internally and in international forums regarding economic governance (Comisión Europea 2013). All of these achievements, if they are finally effectively implemented, would mean very significant advancements in European integration. However, an unavoidable component of allowing innovations to progress toward political union will be considering the design of a new European social model.

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In recent years, important progress has been made in terms of integration in the fields of economic and monetary unity. These include the Fiscal Pact and the European Stability Mechanism, among others, and sometimes make use of methods that are legally heterodox but are prime examples of a firm political determination to save the euro. It would be desirable for this same impetus to serve to determine substantial measures to consecrate on the European scale a level of protection for basic social policies (employment, salary, pensions, social security, public health care and education), guaranteeing their common financing as well. In the same way in which maximum limits for public debt and deficits have been imposed and the “budgetary golden rule,” as well as other actions, have been introduced through constitutional reform in some member states, a European social system should establish some legally required minimum standards of social expenditures guaranteed by all public budgets, according to the respective standard of living. Essential aspects to guarantee in every one of the states would include a minimum interprofessional wage, minimum pensions and a minimum income allowance, among others (Leinen 2013). Therefore, beyond institutional renovation and the full implementation of an economic and monetary union, future reform of the Treaties should make visible, at the highest legal level, a commitment to social progress that guarantees basic social rights throughout the EU. As an important part of this modification, member states should transfer to the EU the political and normative authority necessary to develop social policies on the European scale financed with common funds. At this time of instability for the citizens, the return to a more social Europe is, and will continue to be, the only way to attract citizen support and awaken any enthusiasm in favour of the subsequent plan for political union. Reality requires recuperating social progress as a priority and as the only possible way of making the citizens enthusiastic about Europe again. 24 The upcoming European elections and institutional changes that coincide with this event afford a situation favourable to undertaking, on the basis of article 48.1-5 of the TEU, a constituent process to reform the Treaties, through a Convention that plots the course and draws the roadmap toward political integration in Europe. In addition to the institutional modifications noted in the previous section, the future Convention, formed principally by parliamentary representatives, should draft the new material division of authority between the EU and member states, as well as new constitutive bases for the European welfare society. According to what is anticipated by today’s article 48, paragraphs 4 and 5, the text of the Convention, just as with the failed European Constitution, would need to be approved by “common agreement” by an Intergovernmental Conference before its unanimous ratification by all mem-

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ber states. It would also be an opportune time to modify the system that currently allows constitutive texts to go into effect, which is unsustainable with twenty-eight states, and thus avoid the delays and paralysis it has created in recent years. There is an alternative, which was already considered with the failed European Constitution; this would require a referendum on the European scale to approve new texts drawn up by the Convention. Their eventual approval by the citizens would give, for the first time, democratic legitimacy and direct popular support to the process of European political construction. When this step has finally been realized, we will have begun to build Europe from the bottom up. To achieve this ideal direction, however, it is urgent to first improve the economic and social situation of millions of Europeans: without employment or housing, without hope or the potential for prosperity, the citizens will abstain en masse from any call for participation or, if they decide to participate, they will take the opportunity to express their firm opposition to a Europe they blame for all their suffering, even though it does not currently have the political and legal authority to resolve these issues. CONCLUSION We must build a politically united Europe tailored to the citizens, not the other way around. The European political project should afford greater visibility and direct participation to its future demos. The rules of the marketplace cannot prevail over political and social democracy, since that would lead to a worsening of social conflicts. The Treaties that are currently in effect offer some means to avoid or, at least, slow the current process of popular detachment, such as the European legislative initiative. If well managed, its progressive use will be able to generate more demand for participation from civil society, which would constitute an opportunity to legitimate European governance. Along the same line of opportunity, the upcoming European elections and the institutional reforms that coincide with this electoral date afford a suitable context to renew political leadership and open a constituent process of modifying the Treaties in greater depth, which marks the path toward political union. The goal of political union would offer a logic to the cessation of sovereign powers necessary for the consolidation of banking, fiscal and economic unions, the democratic deepening of the institutional mechanisms for decision making and the implantation of a European social system with common financing. In recent years, the Union has lost the trust and confidence of the citizens. Only a qualitative leap toward greater political integration, with appropriate vision and leadership, will be able to reverse this trend.

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The crisis offers the opportunity to relaunch Europe again to transform it into an authentic democratic political community, based on the solidarity of the states and of the citizens as well as economic and social progress. This is the role that falls to it in the internal realm and in its international projection. The Nobel Peace Prize that the EU was awarded in 2012 is a sign and, at the same time, a stimulus to continue the common voyage that was begun in 1950. The Union is the only possible future for Europeans. BIBLIOGRAPHY Bonino, Emma. 2013. “The Goal of My Life: The United States of Europe.” Federalist Debate (2): http://www.uclouvain.be/cps/ucl/doc/euro/documents/TFD_2_2013_ definitivo-1.pdf (accessed 7 March 2014). Bordino, Giampiero. 2013. “The EU Crisis and the New European Citizens’ Right of Initiative.” Federalist Debate (2): http://www.uclouvain.be/cps/ucl/doc/euro/documents/TFD_2_2013_definitivo-1.pdf (accessed 7 March 2014). Chopin, Thierry, Jean-François Jamet and François-Xavier Priollaud. 2012. “A Political Union for Europe.” Foundation Robert Schuman Policy Paper 252: 1–11. Comisión Europea. 2013. La unión económica y monetaria y el euro. Luxembourg: Oficina de Publicaciones Oficiales. Decker, Frank, and Jared Sonnicksen. 2011. “An Alternative Approach to European Union Democratization: Re-examining the Direct Elections of the Commission President.” Government and Opposition: An International Journal of Comparative Politics 46/ 2: 168–91. Kurki, Milja. 2012. “How the EU Can Adopt a New Type of Democracy Support.” FRIDE Working Papers 112: 1–21. Leinen, Jo. 2013. “For a European Social Pact.” The Federalist Debate 1: http:// www.federalist-debate.org/index.php/current/item/812-for-a-european-social-pact (accessed 7 March 2014). Levi, Lucio. 2013. “The European Elections and the Choice of a European Government.” The Federalist Debate 2: http://www.federalist-debate.org/index.php/editorial/item/831-the-european-elections-and-the-choice-of-a-european-government (accessed 7 March 2014). Pernice, Ingolf, Mattias Wendel, Lars S. Otto, Kristin Bettge, Martin Mlynarski and Michael Schwarz. 2012. A Democratic Solution to the Crisis: Reform Steps towards a Democratically Based Economic and Financial Constitution for Europe. Berlin: Walter Hallstein Institute for European Constitutional Law, Humboldt University. Schnellbach, Christoph. 2011. “The European Citizens’ Initiative: A Useful Instrument for Public Participation?” Cap Perspectives 3, Centre for Applied Policy Research: 1–3. Siekmann, Helmut, and Volker Wielan. 2013. “The European Central Bank’s Outright Monetary Transactions and the Federal Constitutional Court of Germany.” Institute for Monetary and Financial Stability, Working Paper Series 71: http://publikationen. ub.uni-frankfurt.de/opus4/frontdoor/index/index/docId/30584 (accessed 7 March 2014). Sigalas, Emmanuel. 2012. “The European Citizens’ Initiative. A New Era for Democratic Politics in the EU.” The Federalist Debate 2: http://www.federalist-debate.org/ index.php/current-issue/books-reviews/item/776-the-european-citizen%E2%80%99s-initiative (accessed 7 March 2014). Véron, Nicolas. 2013. “A Realistic Bridge towards European Banking Union.” Bruegel Policy Contribution 9: 1–19.

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Zalc, Julien. 2013. “The Europeans’ Attitudes about Europe: A Downturn Linked Only to the Crisis?” Foundation Robert Schuman Policy Paper 277: 1–13.

NOTES 1. The Union’s Citizenship Statute is currently regulated in articles 20 to 24 of the Treaty of the Functioning of the European Union (TFEU). It was the first political area legally formalized in the Treaties, much earlier even than the catalogue of fundamental rights, which went into effect as a Treaty on 1 December 2009 (article 6.1 of the Treaty on the European Union [TEU]). 2. See “El Eurogrupo acuerda el rescate a Chipre,” El País, 25 March 2013: http:// economia.elpais.com/economia/2013/03/25/currentidad/1364169280_417772.html (accessed 7 March 2014). 3. See “El FMI reconoce errores en el rescate de Grecia, según WSJ,” Expansión.com 5 June 2013: http://www.expansion.com/2013/06/05/economia/1370453433.html (accessed 7 March 2014). 4. See “Europeans, the EU and the Crisis,” Standard Eurobarometer 79 (Spring 2013): 4–5. 5. In 2012, the Karlsruhe Court had to make a ruling in this same way on the European Stability Mechanism, before Germany could ratify the Treaty that introduced Eurozone bailout funds. From a legal standpoint, the German Constitutional Court’s ruling on EU secondary legislation is questionable, given that the EU’s first parameter is the validity of the Treaties, not national constitutions. From a political and institutional point of view, there is no doubt that its intervention determines Germany’s position in the implementation of decisions relevant for the EU. 6. The preamble of the TEU refers to these values explicitly when it proclaims the desire that all member states “deepen the solidarity between their peoples while respecting their history, their culture and their traditions.” 7. Other instruments that stand out for providing direct citizen access to the EU are the right, as a citizen of the Union, to petition the EP, and the right to petition the ombudsman (article 24 TFEU). 8. L 65, 11 March 2011. 9. The Commission has the authority to propose normative acts in cases in which the provisions of the Treaties foresee their adoption by normal legislative procedure, or by special procedure, unless it is specified that the proposal should be handled by another institution. Likewise, the Commission is authorized to present a proposal of a juridical act whenever the Treaties explicitly establish it (“the Council, on a proposal from the Commission . . .”). 10. Detailed information about the topics on which initiatives have been presented and their progress through the process is available at http://ec.europa.eu/citizens-initiative/public/competences?lg=en (accessed 7 March 2014). 11. In the current version of the Treaties, employment and social policies are areas in which the EU only has competence of coordination of national policies (article 5 TFEU). Regarding health, education and culture, EU action only complements and supports member-state actions (article 6 TFEU). 12. This was first used in 2011 to add a new paragraph to article 136 of the TFEU, establishing the possibility of a stability mechanism for the whole Eurozone. The Treaty creating the ESM, a new institution of financial assistance based in Luxembourg, was adopted based on this new legal foundation. 13. Without constituting a legislative initiative per se, the initiative called Citizens Pact seems to move in this direction. It is a coalition of citizens and organizations, begun by the European Alternatives citizen movement in December 2012, which defends concrete demands on topics that range from employment and the welfare state to civil rights and political and economic reforms. One of its most immediate objectives is to officially present a manifesto in the EP with a view toward the upcoming

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European elections. Detailed information about this transnational initiative can be found on their web page, www.citizenspact.eu (accessed 7 March 2014). 14. The most significant modifications are, without a doubt, those that affect the Commission, whose composition will be reduced, as established by article 17.5 of the TEU, and the Council, which will begin making decisions by qualified majority according to the new criteria established in article 16.4 of the TEU. 15. Resolution of the European Parliament of 4 July 2013 about the improvement of practical arrangements for the holding of elections of the European Parliament (P7_TA [2013] 0323). 16. See the European Commission Communication “Preparing for the 2014 European: Further Enhancing their Democratic and Efficient Conduct,” COM 2013, 126 final, 6. 17. According to article 17.7 of the TEU, the EP elects the president of the Commission by the majority of its component members, based on a proposal by the European Council, which must take into account the results of the European elections. 18. Resolution of the European Parliament, 22 November 2012, on the European Parliament elections of 2014, 2012/2829 (RSP). 19. In the 2009 elections, there was 43.1 per cent abstention throughout the twentyseven member states, the highest in the EP’s electoral history. See Post-Electoral Survey 2009, Eurobarometer: http://www.europarl.europa.eu/pdf/eurobarometre/28_07/EB71. 3_post-electoral_final_report_EN.pdf (accessed 7 March 2014). 20. According to article 17.7 of the TEU, the EP elects the president of the Commission by the majority of its component members, based on a proposal by the European Council, which must take into account the results of the European elections. 21. Within the European political and institutional framework, the proposal presented on 5 December 2012 by the president of the European Council, Herman Van Rompuy, in collaboration with the presidents of the European Commission, Eurogroup and the European Central Bank, under the title Toward a Genuine Economic and Monetary Union (EUCO 120/12), is noteworthy. A few days earlier, on 30 November, the European Commission also presented the document A Blueprint for a Deep and Genuine Economic and Monetary Union, which includes a roadmap for constructing a European economic government in three phases (COM [2012] 77 final/2). 22. See articles 17 and 21 of the proposal of the Commission for Regulation of the Council that attributes specific functions to the ECB regarding the prudential supervision of credit entities (COM [2012] 511 final, 12 September 2012). In the plenary session held on 6 September 2013, the EP managed to introduce another control mechanism that concretely assigns to the national parliaments the ability to solicit audiences with the president and vice president of the European supervisor and require written answers. See “Plenary Session. Banking Supervision in Plenary Spotlight”: http://www. europarl.europa.eu/pdfs/news/expert/newsletter/20130902NEW18462/ 20130902NEW18462_en.pdf (accessed 7 March 2014). 23. For example, the creation of a banking resolution authority will require the definition of a European bankruptcy system, which currently resides under state authority. Along the same lines, a credible European system of guaranteeing deposits will demand a European fiscal authority, currently not contemplated in the Treaties (Véron 2013). 24. In spite of the Europessimism that has invaded Europe, the citizens of the majority of the states, with the exception of the United Kingdom, still believe that their respective country is better able to confront global challenges and problems within the EU than outside of it (Zalc 2013).

Index

absolute deconstitution. See existential deconstitution accountability, 219–220; for governance, 227; problem, 182 administrative law, 75 AEC. See ASEAN Economic Community Alter, Karen, 122 alternative economic practices, 150–151 American constitution, 179 American democracy, 178–179 antiausterity protests, 150 anticapitalist protest movements, 150 antidiversity feeling, 63–64 antiminorities, 63–64, 68–69 Arab Spring revolutions, 64, 112 Arendt, Hannah, 103 ASEAN Economic Community (AEC), 111–112; blueprinting, 126–127 austerity, 254, 263; antiausterity protests, 150 authoritative institutions, 256 authority, 181, 185–186; banking resolution, 277n23. See also political authority; power bailouts. See financial bailouts Balibar, Etienne, 101, 107–108 ballot requirements, 269 banking: collapse, 60, 237; resolution authority, 277n23; union, 240–241, 272 Beck, Ulrich, 44 Bengoetxea, Joxerramon, 4–5 Bibó, Istvan, 202–203 Bickerton, Christopher, 104–105, 197–198 binary opposition analysis, 114 blueprinting, 7–8; activities, 114; AEC, 126–127; binary opposition analysis,

114; constitutional settings relating to, 124; defining, 113; institutional settings relating to, 124; integration and, 113; interaction types, 124; normative order, 113–115, 123–124; as political practice, 114; regional organizations, 126–127; SADC, 127; selected cases, 125–127; as social interaction, 114; steps, 114; transplanting and, 123 bonds, 60, 160, 212–213 Bonn’s Basic Law, 266 Borrell, Josep, 14 bottom-up alternative, 113 Bretton Woods Agreement, 262n3 Broek, Elmar, 53 budget, 229–230 budgetary vigilance, 240 Bundestag, 52, 81 candidates, 269, 270 capitalism: confusion about, 211; crisis relating to, 144–145; democracy relating to, 135–137, 143–144, 145–146, 152–153; euro crisis relating to, 140; in Germany, 144; pillars of, 142; resource, 153; social, 136; society relating to, 137 capitalist accumulation, 145 Carr, E. H., 122 centralization, 25–26 CFSP. See Common Foreign Security Policy Champeau, Serge, 11–12 checks and balances, 178–179 cities, 213 citizen involvement: elections and, 269–271; European legislative initiative and, 267–269; legitimacy from, 268; for minorities, 268;

279

280

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transnational dialogue, 268 citizenship, 15, 253; The European Year of Citizens, 263; existential deconstitution relating to, 101–102 Citizenship Statute, 276n1 Citizens Pact, 276n13 Citizens’ Reactions (Duchesne et al.), 207–208 civilization process, 251, 254 CJEU. See Court of Justice of European Union classical sociology, 135 Closa, Carlos, 4 coal, 249 Coalition Agreement, 41 coherence, 11, 199, 200 collective action, 258; solidarity and, 252, 257 commercial imbalances, 41 Common Foreign Security Policy (CFSP), 19 communitarian process, 209n10 community, 73n14; economic, 23–24 Community method, 20–21 Community model, 259 complex democracy: eight categories of, 177; EU as, 177, 190–192 complexity, 10–11; constitutive, 76, 176; defining, 191; European, 175–176, 178; legitimation, 176–177, 178; representation, 176–177 compliance, 251 compound union strategy, 32–33 Concept of the Political (Schmitt), 98, 102 confrontation, 204 Conseil Constitutionnel, 47 constitution: American, 179; fiscal brake in, 45–46; fiscal discipline and, 48–50; forms, 96–97; legitimization, 115–116; nation-state relating to, 172; purpose of, 115; social, 69. See also deconstitution constitutional crisis, 2 constitutional disorder, 26–29 constitutional guardianship, 5–6; crisis jurisprudence, 79–80; crisis law, 77–79; economic law relating to, 83–84; GCC and, 80–82, 84–85; introduction to, 75–76; judicial

alliance relating to, 84–86; lessons on, 87–88; MacCormick on, 77; in nonunitary union, 76–77; in Pringle judgement and CJEU, 82–84, 85; Schmitt on, 76; teleological interpretation, 85–86 constitutionalization: horizontal effects, 48–49; intergenerational justice relating to, 49; Kantian, 251; petrification and, 44–48; pluralism relating to, 112; studies, 115. See also unbound constitutionalization constitutional norms, 114, 116 constitutional pluralism, 182–183 constitutional reform, 46–47 constitutional settings, 124 constitutional system, 19, 111–112, 113–114. See also blueprinting Constitutional Theory (Schmitt), 97 Constitutional Treaty (CT), 21 constitutive complexity, 76, 176 constructivist approach: to integration, 119; three strands of, 120 contagion diffusion, 121, 122 contemporary sociology, 135 contractual agreements, 39 Convention, 273–274 cooperation: interparliamentary, 52–53; from lock-ins, 249–251; solidarity and, 69–70. See also Treaty on Stability, Cooperation, and Governance copying, 111–112, 113–114. See also blueprinting countercultures: alternative economic practices, 150–151; antiausterity protests, 150; anticapitalist protest movements, 150; new, 148–151; right-wing populist movements, 149 Court of Justice of European Union (CJEU), 6; Pringle judgement and, 82–84, 85 Coussedière, Vincent, 197 Craig, Paul, 83 credibility, 220 crimmigration, 64, 68 crisis: capitalism relating to, 144–145; clarification on, 146; constitutional,

Index 2; defining, 158; economic, 137, 144; fiscal, 226–227; growth after, 58; institutional consequences, 64; legitimation, 8–9, 136; minorities relating to, 63–64; of pluralism, 59, 67–69; post-2008, 147; securitarian derivatives relating to, 64; societal, 63, 136–137; of solidarity, 59, 69–71; systemic, 57–58, 59, 67–69; trust, 165–167; variables, 62–63. See also euro crisis crisis jurisprudence: challenges to, 80; constitutional guardianship, 79–80; questioning, 79, 80 crisis law: constitutional guardianship, 77–79; crisis management and, 78 crisis management: challenges, 159; crisis law and, 78; defining, 158; focus and goals, 162; introduction of, 168n2; perception and interpretation relating to, 159; regulation as, 161–162; tasks, 158–159; transnational support mechanisms, 160, 162 critical norms research, 118 CT. See Constitutional Treaty cultural pluralism. See pluralism Cyprus, 240 debt: in euro crisis, 60; financing, 138; GDP relating to, 168n7; Germany on, 42; OMT, 43–44; sovereign, 143 decentralization, 25–26 deconstitution: dynamic, 104–106; existential, 100–102; formal, 102–104; Schmitt and, 95; selfconstitution relating to, 106–108; speculative constitutional bubble, 95–100 Delanty, Gerard, 8–9 Delors Report, 23 demagogic parties, 197 demagogy, 196, 197 dematerialization, 99 democracy: American, 178–179; capitalism relating to, 135–137, 143–144, 145–146, 152–153; complex, 177, 190–192; debate, 173; GCC relating to, 81–82, 186–188;

281

guaranteeing, 185–190; in Maastricht Treaty, 190; nation-state relating to, 145, 171, 172, 174; normative, 255; pluralization relating to, 180–181; reinterpreting, 175, 177 democratic deficit, 174, 195, 205 democratic ideal, 207 democratic innovation: of EU, 179–185; functional differentiation and territoriality, 184–185; indeterminate power, 181–184; pluralization, of democratic principles, 180–181 democratic principle, 97 democratization: consequences of, 137; unbound constitutionalization relating to, 112 denationalization, 218 depoliticization, 98 differentiated integration, 3, 30 differentiation: formalizing, 39–40; functional, 184–185; increase in fragmentation and, 38–40; internal, 38–40 disillusionment, 237 dissatisfaction, 205, 207 dissuasive arm, 25 domination, 254–256 Duchesne, Sophie, 207–208 dynamic deconstitution: Bickerton on, 104–105; political dynamics in, 105; Schmitt on, 104, 105–106; sovereignty in, 105–106; unity in, 104–105 EC. See European Community ECB. See European Central Bank ECJ. See European Court of Justice ECOFIN Council, 27 Economic and Monetary Union (EMU): centralization and decentralization compromise, 25–26; double compromise, 22–26; introduction of, 23; opt-out member states and, 22–25; UK, euro crisis, and, 27–29 economic community, 23–24 economic crisis, 137, 144. See also euro crisis

282

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economic government of euro, 238. See also governance economic inequalities, 96 economic law, 83–84 economic practices, alternatives, 150–151 economic union, 272 economy: in member states, 163; social market, 144; society relating to, 135, 164; unemployment, 163–164 ECSC. See European Coal and Steel Community efficacy, 11, 207–208 efficiency, 219 EFSF. See European Financial Stability Facility EFSM. See European Financial Stability Mechanism EFTA. See European Free Trade Association Egyptian referendum, 112 elections, 15, 267; candidates, 269, 270; citizen involvement and, 269–271; European Commission in, 270–271; for executive branch, 270; parliament relating to, 270, 271; political parties relating to, 271; requirements, 269; upcoming, 269, 271, 273, 274 electoral day, 269–270 Embedded Acquis Communautaire, 125 emergency budget, 229 emotional responses, 255 employment, 163–164, 276n11 EMU. See Economic and Monetary Union; European Monetary Union environment, 184 equality, plural, 68 Eriksen, Erik O., 15 Erikson, Erik, 65 ESDP. See European Security and Defense Policy ESM. See European Stability Mechanism EU. See European Union EUphoria, 98–99 Euratom, 249 Eurobarometer, 212 euro budget, 229–230

euro crisis: analysis of, 62–67; assistance, 61; banking collapse and, 60; capitalism relating to, 140; constitutional disorder and, 26–29; constitutional system relating to, 19; debt in, 60; defining, 59–62; diagnoses and prognoses, 138–141; EU breakup relating to, 140; Europe after, 57–59; on European Council, 26–27; financial side of, 159–163; Germany relating to, 29; institutional consequences of, 69–71; intermediate strategies, 151–152; interpretations, 2; moral of, 61–62; narrative, 60–62, 225–227; national regimes relating to, 139; neoliberalism relating to, 139, 140–141; origins, 141–142, 225–227; pack of measures for, 61; on perception, 236–237; pluralism relating to, 4–5, 67–69; political authority after, 30–33; regulation relating to, 140–141; rethinking, 141–148; saving euro, 236; social and political side of, 9, 163–166; solvency relating to, 159; TINA on, 139–140; trust relating to, 159–160, 162, 165; UK, Economic and Monetary Union, and, 27–29. See also crisis management Europe: aspirations, 71; after euro crisis, 57–59; of nations, 148–149; neomedieval, 12–13, 214–217; new, 219–220; sacrificing, 236; social construction of, 119 European Central Bank (ECB), 160; creation of, 23; financial bailout and, 239; GCC on, 186; OMT, 43–44, 160, 266 European Coal and Steel Community (ECSC), 249 European Commission, 26–28, 213; in elections, 270–271; political authority, 30–33, 231–232, 244, 267, 276n9; power, 231 European Community (EC), 23–24; law, 250 European complexity: logic and principles, 178; origins, 175–176

Index European Council: euro crisis on, 26–27; power of, 263; president, 32 European Court of Justice (ECJ), 122, 189 European Financial Stability Facility (EFSF), 38 European Financial Stability Mechanism (EFSM), 38 European fiscal package, 161 European flag burning, 219 European Free Trade Association (EFTA), 23, 35n1 European integration. See integration Europeanization, 40, 44. See also Germanization European legislative initiative: background on, 267; citizen involvement and, 267–269; requirements, 267; treaty reforms relating to, 268 European modernity, 152 European Monetary Union (EMU), 235, 247–248 European normative order, 118–119; Europe’s social construction, 119; normative order social construction, 120–121; normative power conceptions, 121–123 European Parliament. See parliament European Security and Defense Policy (ESDP), 19 European Semester, 240 European Stability Mechanism (ESM), 61, 160, 240–241 European Union (EU): accomplishments, 251–252; breakup, as result of euro crisis, 140; budget increase, 229–230; characteristics, 179–180; as complex democracy, 177, 190–192; compound union strategy, 32–33; defining, 172; democratic innovation of, 179–185; differentiation and fragmentation, 38–40; divisions within, 30, 101; efficacy of, 207–208; evolution, 184; general public opinions on, 65–66, 67, 165, 197–198, 207–208; Germany in, 138–139; incoherencies, 199;

283

institutional transformation in, 66–67; intergovernmental Treaties in, 19–20; macroeconomic policy Germanization, 40–44; macroeconomic reform, 4, 37–38; moral idealism, political realism, and, 201–206; nation-state relating to, 171, 172, 173, 198; new policies, 230–231; new union strategies, 30–34; parliamentary union strategy, 30–32; political system petrification, 44–48; political taxonomy exercise, 175–179; as stateless union, 256–257; structural imbalance, 247; support, 165; translation errors, 171–175 European value, 152 The European Year of Citizens, 263 Europhobia, 266 Euro Plus Pact, 240; petrification relating to, 56n4; UK and, 28 Euro-scepticism, 195, 199; diagnostic, 264–266; governance relating to, 265; reversing, 266–271 Eurosceptic offensive, 40 euro-taxonomy, 175 Eurozone membership circles, 39 exchange-value, 99 exclusion, 254 executive branch, 270 executive deficit, 195, 205–206, 210n16 existential deconstitution: Balibar on, 101; citizenship relating to, 101–102; defining, 100; legitimation in, 100; politicization relating to, 100–101; Schmitt on, 100 Fabbrini, Sergio, 3–4 fascism, 202–203 federalism, 212 federalization: European demos and, 243–244; legitimacy, taxation, and, 243; social dimension, 244 financial bailouts, 143; ECB and, 239; no-bail out clause, 160, 186; parliament relating to, 52 financial emergencies, 229 fiscal brake, 45–46 Fiscal Compact, 27–29

284

Index

Fiscal Compact Treaty, 218 fiscal crisis, 226–227 fiscal discipline, 13, 48–50 fiscal policy. See macroeconomic policy fiscal union, 138, 258 Foessel, Michael, 200 foreign agents, 101 foreign policy, 209n10 formal deconstitution: forma formarum, 102; liberal legalism relating to, 103–104; member states in, 103; Schmitt on, 102–103; sovereignty in, 103; totalitarianism relating to, 103–104 fragmentation, 38–40 France, 62 Frazer, Elizabeth, 207–208 freedom, 203 Free Trade Area (FTA), 35n1 Friedman, Milton, 87 FTA. See Free Trade Area functional differentiation, 184–185 Future of Europe Group, 39–40 futurology, 2–3 GCC. See German Constitutional Court GDP. See gross domestic product German Constitutional Court (GCC), 43; Bundestag and, 81; constitutional guardianship and, 80–82, 84–85; contradictions, 187–188; democracy relating to, 81–82, 186–188; on ECB, 186; legitimation relating to, 186; nationstate and, 186; perspective relating to, 186–187; reputation of, 80–81; on secondary legislation, 276n5; Weiler on, 80 Germanization: Coalition Agreement, 41; commercial imbalances, 41; of macroeconomic policy, 40–44; sanctioning, 43; TESM and, 43 German reunification, 22–23 Germany: Bonn’s Basic Law, 266; Bundestag, 52, 81; capitalism in, 144; on debt, 42; democratic principle, 97; in EU, 138–139; euro crisis relating to, 29; forma formarum, 102; hegemonic position of, 40–41;

Nazism, 202; ordoliberalism, 40–41; petrification relating to, 44–45; on Six Pack, 42; Stability and Growth Pact, 41–42; stability culture, 41; TSCG relating to, 42 Giddens’s structuration theory, 120 Gilbert, Mark, 98–99 global constitutionalization, 115, 116; definitions and clarifications, 116–118; literature, 127; reflexive, 128–129; social protest relating to, 127. See also unbound constitutionalization globalization, 112, 248; unbound constitutionalization relating to, 115 globalized neoliberalism, 139 global normative order, 120 governance, 14; accountability for, 227; budgetary vigilance, 240; changes in, 238, 239–242; errors in, 238–239; Euro-scepticism relating to, 265; imbalance in, 50–53; incipient banking union, 240–241; integration relating to, 228; interdependence and, 228; interparliamentary cooperation, 52–53; political authority for, 227; politics of growth, 241–242; representative organizations relating to, 50–52; six conditions for, 227–228; transfer of power and, 228; trust for, 228; wealth relating to, 228 government, 257 Great Depression, 87 gross domestic product (GDP), 163, 168n7 growth: after crisis, 58; politics, 241–242 guardianship. See constitutional guardianship Haas, Ernst, 217, 259 Habermas, Jürgen, 158, 185, 245 Haege, Florence, 207–208 Hall, Peter A., 87 high politics, 205, 206 Hollande, François, 47 horizontal effects, 48–49

Index human rights: Muiznieks on, 71; universalism of, 71 humiliation, 254; posthumiliation society, 15, 248–249 Iceland, 147 idealism. See moral idealism IGC. See Intergovernmental Conference illusory demands, 198 immigration, 101 incipient banking union, 240–241 incoherencies, 199 indeterminate power, 181–184 indifference, 208 The Indignants, 150 inequality, 237; economic, 96 Innerarity, Daniel, 10–11, 97 institutional changes, 242–243; EU transformations, 66–67; institutional design renovation, 269–271 institutional consequences, 64, 69–71 institutional settings, 124 institutions: authoritative, 256; power of, 256 integration, 98; blueprinting and, 113; confusion about, 211; constructivist approach to, 119; differentiated, 3, 30; disillusionment with, 237; governance relating to, 228; legitimacy and, 217–218; Maastricht Treaty, 21; market, 142; morals relating to, 253; nation-state relating to, 212; neomedievalism relating to, 216–217; normativity relating to, 257–259; political union, 21, 271–274; progress of, 273; promises of, 248–249; risk relating to, 250; solidarity relating to, 253, 257; study of, 172; theory, 188; translation errors relating to, 171–175 intelligibility problem, 182 interdependence, 228 intergenerational justice, 49 Intergovernmental Conference (IGC), 53 intergovernmental dominance, 15; normativity and, 254–256 intergovernmentalism, 173, 209n10

285

intergovernmental policies, 230–231 intergovernmental predominance, 242–243 intergovernmental supranationalism, 176 intergovernmental Treaties, 19–20 intergovernmental union, 19 internal differentiation, 38–40 International Labour Organization, 165–166 international law, 116 international policies, 198 interparliamentary cooperation, 52–53 introspective power, 198 Ireland, 163; Pringle judgment and CJEU, 82–84, 85 Joerges, Christian, 5–6 Jones, Eric, 216 judicial alliance, 84–86 justice: intergenerational, 49; social, 152; solidarity compared to, 253 justification, 255–256 Kantian constitutionalization, 251 Karlsruhe Court, 276n5 Keane, John, 217–218 Kelsen, Hans, 97 Keynesianism, 87 Kocka, Jürgen, 151 Konstadinides, Theodore, 103 Kratochwil, Friedrich, 120 labour market, 49 law: administrative, 75; Bonn’s Basic Law, 266; crisis, 77–79; EC, 250; economic, 83–84; international, 116; member states and, 251; Schmittian Administrative Law, 75 Law on Budgetary Stability, 46 leadership, 259 Legality and Legitimacy (Schmitt), 105 legal order, 38 legislation: European legislative initiative, 267–269; in petrification, 44–45; secondary, 276n5 legitimacy: from citizen involvement, 268; federalization, taxation, and, 243; integration and, 217–218; in

286

Index

new Europe, 219–220; of origin and result, 237; prosperity relating to, 217; social dimension, 244 legitimation, 69, 115–116; complexity, 176–177, 178; crisis, 8–9, 136; in existential deconstitution, 100; GCC relating to, 186; through procedure, 96; through prosperity, 96 liberal legalism, 103–104 lock-ins, 260, 262n9; cooperation from, 249–251; mechanisms, 249; supranationalism relating to, 249 London Stock Exchange, 219 Loughlin, Martin, 100 Maastricht Treaty, 15, 250; Community method relating to, 20–21; compromise, 20–22; democracy in, 190; integration, 21; monetary policy relating to, 83; political union in, 21; purpose of, 20; supranational union in, 21; Treaty of Lisbon relating to, 21–22 MacCormick, Neil, 77 macroeconomic policy: Germanization of, 40–44; national, 48; petrification and, 45; reform, 4, 37–38 Maduro, Miguel Poiares, 13–14 Manners, Ian, 121–122 Marder, Michael, 6–7 market integration, 142 Marquand, David, 204, 205 Marshall, T. H., 143, 152 medievalism, 215–216. See also neomedievalism member states, 46–47; challenges to, 212–214; clashes between, 266; divisions within, 30, 101; economy in, 163; in formal deconstitution, 103; laws and, 251; opt-out, 22–25, 250; power, sovereignty, and, 189. See also nation-state Memoranda of Understanding (MoUs), 53–54 Mercosur, 111–112 Merkel, Angela, 41 Middle Ages, 215–216 middle class, 147 migration opposition, 149

minorities: antiminorities, 63–64, 68–69; citizen involvement for, 268; clashes with, 121; crisis relating to, 63–64 mistrust, 164–165, 166, 237 Mitrany, David, 217 monetary policy: centralization, 25–26; European fiscal package, 161; Maastricht Treaty relating to, 83; nationalized economic policies relating to, 29; political responsibility and, 160 monetary union, 138 Monnet, Jean, 236, 249 moral confrontation, 204 moral idealism, 11; Bibó and, 202–203; forms of, 202; Marquand on, 204, 205; Niebuhr on, 201; political realism, EU, and, 201–206; populism and, 202–203, 204 morals: of euro crisis, 61–62; integration relating to, 253; of narrative, 61–62 MoUs. See Memoranda of Understanding Muiznieks, Nils, 71 Müller, Jan, 95, 98 multiplicity, 182 narratives: euro crisis, 60–62, 225–227; moral of, 61–62 national conditioning, 183 national courts, 189 national currencies, 237, 250 national insolvency, 162, 168n2 nationalism, 213, 248 nationalized economic policies, 29 national macroeconomic policy, 48 National Reform Programs, 51 national regimes, 139 National Security Agency (NSA), 64 National Stability and Convergence Programs, 51 nation-state: challenges facing, 213; conditions, 174; constitution relating to, 172; democracy relating to, 145, 171, 172, 174; EU relating to, 171, 172, 173, 198; GCC and, 186; integration relating to, 212;

Index populism relating to, 198; power of, 213; sociology relating to, 172; sovereignty relating to, 203; translation errors relating to, 171, 172 Nazism, 202 NEG. See Non Euro Group negative formation, 105 neoliberalism: consequences of, 146–147; euro crisis relating to, 139, 140–141; globalized, 139 neomedievalism: defining, 215; Europe and, 12–13, 214–217; integration relating to, 216–217; medievalism, 215–216 Niebuhr, Reinhold, 201 no-bail out clause, 160, 186 Non Euro Group (NEG), 36n5 nonstate polities, 111 nonstate representation, 218 nonunitary union, 76–77 normative change, 118 normative democracy, 255 normative order: blueprinting, 113–115, 123–124; European, 118–123; global, 120; renegotiating and reenacting, 129–130; social construction of, 120–121 normative plurality, 68 normative power: approach, 118; two conceptions of, 121–123 normative power approach (NPA), 121–123 Normative Power Europe (NPE), 121–123 normativity, 15; EU’s accomplishments, 251–252; integration relating to, 257–259; intergovernmental dominance and, 254–256; leadership and resolve, 259; locked-in cooperation, 249–251; missing link in, 252–254; posthumiliation society relating to, 248–249; stateless union, 256–257 norm diffusion approach, 113, 118, 124 norms: constitutional, 114, 116; critical norms research, 118; unbound constitutionalization relating to, 114–115

287

norm transfer, 124 north-south clash, 266 NPA. See normative power approach NPE. See Normative Power Europe NSA. See National Security Agency OMT. See Outright Monetary Transactions opt-out member states, 250; Economic and Monetary Union and, 22–25; Treaty of Lisbon on, 24 ordoliberalism, 40–41 Outright Monetary Transactions (OMT), 43–44, 160, 266 pack of measures, 61. See also Six Pack; Two Pack panic, 4–5, 61 parliament: elections relating to, 270, 271; financial bailouts relating to, 52; interparliamentary cooperation, 52–53; in National Reform Programs, 51; in National Stability and Convergence Programs, 51; retreat of, 50–52; Six Pack relating to, 50, 51; transforming, 231; TSCG relating to, 50, 51, 53; weakness of, 51–52 parliamentary representation, 217–218 parliamentary union strategy, 30–32 party politics, 65, 66 perception: crisis management relating to, 159; dissatisfaction, 205, 207; euro crisis on, 236–237; general public opinions, EU, 65–66, 67, 165, 197–198, 207–208. See also Euroscepticism Pérez de las Heras, Beatriz, 15 perspective: GCC relating to, 186–187; on sovereignty, 189 petrification: constitutionalization and, 44–48; on constitutional reform, 46–47; Euro Plus Pact relating to, 56n4; Germany relating to, 44–45; legislation in, 44–45; levels of, 45–46; macroeconomic policy and, 45; of political system, 44–48 philosophy, 172 plural equality, 68

288

Index

pluralism: constitutional, 182–183; constitutionalization relating to, 112; crisis of, 59, 67–69; debate, 68; euro crisis relating to, 4–5, 67–69; MacCormick on, 77; normative plurality, 68; origins, 67; Republican, 182; social diversity and, 67–68; solidarity relating to, 70 pluralistic polityscape, 59 pluralization, 180–181 policies, new, 230–231. See also specific policies political authority: after euro crisis, 30–33; European Commission, 30–33, 231–232, 244, 267, 276n9; for governance, 227; mistakes by, 265; mistrust of, 164–165, 166; more effective, 231–233 political confrontation, 204 political dynamics, 105 political elites, 197 political parties, 271 political philosophy, 172 political realism, 11; moral idealism, EU, and, 201–206 political refusal, 204 political responsibility, 160 political system petrification, 44–48 political taxonomy: euro-taxonomy, 175; exercise in, 175–179 political union: banking union and, 272; economic union, 272; for future, 271–274; goal of, 274; in Maastricht Treaty, 21. See also integration politicization: depoliticization, 98; existential deconstitution relating to, 100–101; popular dissatisfaction relating to, 205 politics: of growth, 241–242; high, 205, 206; party, 65 polity, 229, 251, 256 popular dissatisfaction, 205, 207 populism, 65; Bibó relating to, 202–203; Coussedière on, 197; demagogy relating to, 196, 197; general characteristics, 209n2; illusory demands, 198; inadequacy relating to, 196; moral idealism and, 202–203, 204; nation-state relating

to, 198; objections, 198; on political elites, 197; political interpretation of, 196–201; right-wing populist movements, 149; solutions relating to, 200–201; universalizing, 202 populist movements, 11–12, 68–69 Posner, Eric A., 75 post-2008 crisis, 147 posthumiliation society, 15, 248; normativity relating to, 248–249 post-national community, 73n14 pouvoir constituant (constitutive complexity), 76, 176 power: European Commission, 231; of European Council, 263; indeterminate, 181–184; of institutions, 256; introspective, 198; member states, sovereignty, and, 189; of nation-state, 213; normative power, 118, 121–123; transfer of, 228. See also political authority Preunkert, Jenny, 9 preventative arm, 25 preventive vigilance, 240 Pringle, Thomas, 82–83 Pringle judgement, 82–84, 85 production, 142 productive indeterminacy, 103 prosperity: legitimacy relating to, 217; legitimation through, 96 protests: antiausterity, 150; anticapitalist protest movements, 150; social, 62, 127 public opinion, 65–66, 67, 165, 197–198, 207–208. See also Euro-scepticism; perception recalcitrance, 145 recession, 264 Rechtsstaat constitutional form, 96–97 reciprocity, 254 reflexive global constitutionalization, 128–129 reform: constitutional, 46–47; macroeconomic, 4, 37–38; National Reform Programs, 51; structural, 62; of treaties, 268 refusal, 204 regional organizations, 126–127

Index regulation: as crisis management, 161–162; euro crisis relating to, 140–141; European fiscal package, 161; re-evaluation of, 161; Six Pack, 161; Stability and Growth Pact, 161 rejection, 207 religion, 68 Renan, Ernest, 199 representation: complexity, 176–177; nonstate, 218; parliamentary, 217–218 representative organizations, 50–52 Republican pluralism, 182 resolve, 259 resource capitalism, 153 resources, 229, 230 responsibility: political, 160; solidarity and, 204–205 revolution, 248; Arab Spring, 64, 112 right, to political participation, 258–259 right-wing populist movements, 149 risk, 250, 264 Rome Treaty, 248, 249–250 Ruggie, John Gerard, 215 rule-of-law principle, 258–259 SADC. See South African Development Community SADCC. See Southern African Development Co-ordination Conference Salter, Michael, 104 Saward, Michael, 218 Schengen Agreement, 24, 36n2 Schiek, Dagmar, 105 Schmitt, Carl, 5–7, 75, 189; Concept of the Political, 98, 102; on constitutional guardianship, 76; Constitutional Theory, 97; deconstitution and, 95; on dynamic deconstitution, 104, 105–106; on existential deconstitution, 100; on formal deconstitution, 102–103; Legality and Legitimacy, 105; on selfconstitution, 107; on sovereignty, 105; on speculative constitutional bubble, 99 Schmittian Administrative Law, 75 SEA. See Single European Act

289

secondary legislation, 276n5 securitarian derivatives, 64 Securities Markets Program (SMP), 168n4 self-constitution: deconstitution relating to, 106–108; Schmitt on, 107; sovereignty relating to, 107; technocracy relating to, 107 self-criticism, 206 Sen, Amartya, 66 shared trauma, 258 Single European Act (SEA), 250 Six Pack, 38–39, 240; Germany on, 42; on interparliamentary cooperation, 53; parliament relating to, 50, 51; regulation, 161; TSCG relating to, 39 Smith, Adam, 102 SMP. See Securities Markets Program social capitalism, 136 social class, 147 social constitution, 69 social construction: constructivist approach, 119; of Europe, 119; of normative order, 120–121 social diversity, 67–68 social interaction, 114 social justice, 152 social market economy, 144 social progress, 273 social protests, 62, 127. See also protests social science, 1 social viability, 242 societal crisis, 63, 136–137 society: capitalism relating to, 137; economy relating to, 135, 164; posthumiliation, 15, 248–249; unemployment, 163–164 sociology, 135, 172 solidarity, 228, 229; challenges to, 70; collective action and, 252, 257; cooperation and, 69–70; crisis of, 59, 69–71; discourses, 253; forum, 70–71; integration relating to, 253, 257; justice compared to, 253; pluralism relating to, 70; postnational reconstruction of, 69–71; reciprocity and, 254; responsibility and, 204–205; social constitution and, 69; traits, 69;

290

Index

transformation of, 67 solvency, 159 South African Development Community (SADC), 111–112, 133n16; blueprinting, 127 Southern African Development Coordination Conference (SADCC), 127, 133n13 sovereign debt, 143 sovereignty, 183; in dynamic deconstitution, 105–106; in formal deconstitution, 103; member states, power, and, 189; nation-state relating to, 203; perspectives on, 189; Schmitt on, 105; selfconstitution relating to, 107; speculative constitutional bubble relating to, 96 speculation, 238 speculative constitutional bubble: deconstitution relating to, 95–100; dematerialization and, 99; legitimation relating to, 96; Rechtsstaat constitutional form, 96–97; Schmitt on, 99; sovereignty relating to, 96; Treaty Establishing a Constitution for Europe, 95 Stability and Growth Pact, 25, 41–42; regulation, 161 stability culture, 41 Standard Eurobarometer 78, 207–208 stateless union, 256–257 Steinbrük, Peer, 41 structural imbalance, 247 structural reform, 62 subjection, 254 subsystems, 58 supererogation, 253 supranational federation, 15, 249 supranationalism, 176; lock-ins relating to, 249 supranational union, 19; in Maastricht Treaty, 21 surveillance, 64 systemic crisis, 57–58; impacts, 67–69; subsystems, 59 taxes, 229, 237; federalization, legitimacy, taxation, and, 243

technocracy, 107 technocratic paternalism, 196 teleological interpretation, 85–86 territorial control, 252 territoriality, 180, 184–185 TESM. See Treaty of the European Stability Mechanism TFEU. See Treaty of Functioning European Union There Is No Alternative (TINA), 139–140 totalitarianism, 103–104 transfer union, 258 translation errors, 171–175 transnational dialogue, 268 transnationalism, 173 transnational support mechanisms, 160, 162 transparency, 181 transplanting, 123 trauma, 258 treaties, 252; European legislative initiative and reform of, 268. See also specific treaties Treaty Establishing a Constitution for Europe, 95 Treaty of Functioning European Union (TFEU), 60, 64, 267, 268; article 107, 72n3; article 113 and 114, 272; article 125, 86; article 136, 38, 61, 79 Treaty of Lisbon, 19, 177, 183; Maastricht Treaty relating to, 21–22; on opt-out member states, 24 Treaty of the European Stability Mechanism (TESM), 38, 39; Germanization and, 43 Treaty on Stability, Cooperation, and Governance (TSCG), 38, 240; on constitutional reform, 46; Germany relating to, 42; parliament relating to, 50, 51, 53; rigidity of, 45; Six Pack relating to, 39 Troika, 96, 97, 254, 263 trust, 69, 212; crisis, 165–167; euro crisis relating to, 159–160, 162, 165; for governance, 228; mistrust, 164–165, 166, 237 TSCG. See Treaty on Stability, Cooperation, and Governance

Index Tuori, Kaarlo, 85, 92n30 Two Pack, 38–39, 91n9; on interparliamentary cooperation, 53 UK. See United Kingdom ultranationalist movements, 65 unbound constitutionalization, 7–8; defining, 115–116, 117–118, 133n2; democratization relating to, 112; globalization relating to, 115; norms relating to, 114–115 unemployment, 163–164 United Kingdom (UK): Economic and Monetary Union, euro crisis, and, 27–29; Euro Plus Pact and, 28; Fiscal Compact, 27–29; London Stock Exchange, 219 United States, 244–245, 259; American constitution, 179; American democracy, 178–179

unity, 98, 104–105 Urry, John, 153 van Gerven, Walter, 97 Van Ingelgom, Virginie, 207–208 Van Rompuy, Herman, 277n21 Vermeule, Adrian, 75 veto threats, 27 vigilance, 240 Waigel, Theo, 41–42 wealth: governance relating to, 228; redistributing, 230 The Wealth of Nations (Smith), 102 Weiler, Joseph, 80 welfare collapse, 63 Whitman, Richard G., 120–121 Wiener, Antje, 7–8 Zielonka, Jan, 12–13

291

Contributors

Joxerramon Bengoetxea teaches Philosophy and Sociology of Law, Comparison of Legal Cultures, EU Law, and Nationalism and European Integration at the University of the Basque Country, where he coordinates the ehuGUNE program on the interaction between academia and civil society and directs the international master and PhD programs in sociology of law (Oñati International Institute for the Sociology of Law). He has researched and published widely in all these areas. Josep Borrell holds a Jean Monnet Chair on European Integration at the Universidad Complutense of Madrid. From 1982 to 1996, he served as the secretary of state for Finance and minister for Public Works, Transport and the Environment for the Spanish government. He has been president of the European Parliament (July 2004–January 2007) and president of the Florence European University Institute (January 2010–June 2012). Serge Champeau, former Professeur Agrégé of Philosophy (Bordeaux). Currently researcher at Globernance (the Institute for Democratic Governance, San Sebastian, Spain). Author of several books and articles on aesthetics, philosophy of language and politics. Translator into French of David Gauthier’s Morals by Agreement. Translator into French of Daniel Innerarity’s La transformación de la política (The Transformation of Politics), El futuro y sus enemigos (The Future and Its Enemies) and La democracia del conocimiento (The Democracy of Knowledge). Carlos Closa is professor at the Instituto de Políticas y Bienes Públicos and part-time professor at RSCAS at the European University Institute, Florence. He was a professor at the University of Zaragoza and the Complutense in Madrid and visiting professor at the College of Europe. He was also visiting fellow at Harvard University and senior fellow at NYU. He was deputy director of the Centre for Political and Constitutional Studies (CEPC, Ministry of Presidency, Spain). Gerard Delanty is professor of sociology and social and political thought, University of Sussex (UK). His research is in general sociology and social theory, and specifically concerns topics relating to globalization and the political and historical sociology of modernity. He is the author of several articles (in the British Journal of Sociology, Comparative European Politics, Sociological Review) and eleven books including Inventing Europe: Idea, Identity, Reality (1995) and (with C. Rumford) Rethinking Europe: Social Theory and the Implications of Europeanization (2005). His most recent book is Formations of European Modernity: A Historical and 293

294

Contributors

Political Sociology of Europe (2013). He has edited many volumes, including the Handbook of Contemporary European Social Theory (2005) and Europe and Asia beyond East and West (2006). Erik Oddvar Eriksen is the director of ARENA Center for European Studies (Oslo) and professor of political science. His main research fields are political theory, public policy and European integration. His interest in legitimate rule has led to publications on democracy in the EU, governance and leadership, functions and limits of the state, deliberative democracy, trust, regional politics, security politics and the welfare state. He is a member of the research board of the Research Programme on Democracy at the University of Oslo since 2008. He is a member of the editorial boards of the Open Political Science Journal, Norsk Statsvitenskapelig Tidsskrift; and Distinktion: Scandinavian Journal of Social Theory, Ethics & Global Politics and he is coeditor of the series Routledge Studies on Democratising Europe. Sergio Fabbrini is professor of political science and international relations, director of the Luiss School of Government (Rome). He was the editor of the Rivista Italiana di Scienza Politica in the period 2004–2009. He has been awarded several prizes and taught at various universities. He has published fourteen books, two coauthored books and fourteen edited or coedited books or special issues of journals, and three hundred scientific articles and essays. His most recent book in English is Compound Democracies: Why the United States and Europe Are Becoming Similar (2010). He is columnist at the Italian financial daily Il Sole 24 Ore. Daniel Innerarity is professor of social and political philosophy, Ikerbasque Researcher at the University of the Basque Country (Spain) and director of the Institute for Democratic Governance (San Sebastian, Spain). He is a former Robert Schuman Visiting Professor in the European University Institute of Florence and currently at the London School of Economics. His books in English are The Transformation of Politics (2010), The Future and Its Enemies (2012), Humanity at Risk. The Need for Global Governance (edited with Javier Solana, 2012), The Democracy of Knowledge (2013), A World of Everyone and No One (2014). Christian Joerges is a part-time professor of law and society at the Hertie School of Governance (Berlin), a research professor at the Law Faculty of Bremen University and codirector of the Centre of European Law and Politics. Until 2007, he held the chair for European economic law at the European University Institute (Florence). He has published extensively on the Europeanization of private and economic law, transnational risk regulation and governance structures. His Darker Legacies of Law in Europe (edited with Navraj Ghaleigh, 2003) received twenty-eight reviews. Miguel Poiares Maduro is doctor of laws from the European University Institute (Florence). He was advocate-general at the European Court of Justice in Luxembourg from 2003 to 2009 and lecturer at numerous

Contributors

295

institutions, including College of Europe, Catholic University of Lisbon, New University of Lisbon, London School of Economics, University of Chicago Law School, Centre for Political and Constitutional Studies of Spain, Ortega y Gasset Institute in Madrid, and Institute of European Studies of Macau. Before his appointment in April 2013 as minister in the cabinet of the prime minister and for regional development to the Portuguese government, he was director of the Global Governance Program and professor of law at the European University Institute (Florence) and visiting professor at the Yale University Law School. Michael Marder is Ikerbasque Research Professor of Philosophy at the University of the Basque Country (Vitoria). He is an associate editor of the journal Telos and the general editor of three book series, Political Theory and Contemporary Philosophy; Critical Plant Studies; and, with Santiago Zabala, Studies in Postmetaphysical Thought. He is the author of numerous books and articles on phenomenology, political philosophy and environmental thought. His latest books are Deconstructing Zionism: A Critique of Political Metaphysics, coedited with Gianni Vattimo, and two monographs: Phenomena—Critique—Logos: The Project of Critical Phenomenology and The Philosopher’s Plant: An Intellectual Herbarium, both published in 2014. Beatriz Pérez de las Heras is professor of European law at the University of Deusto (Bilbao) and holder of the Jean Monnet Chair in Interdisciplinary Studies on European Integration. As of 2004, she is the main researcher of the European Integration research team and director of the journal Cuadernos Europeos de Deusto. Since September 2013, she is the academic coordinator of the Jean Monnet Centre of Excellence on EU Law and International Relations. She also serves as vice dean for research and international relations at Deusto School of Law. Her latest research and publications are focused on EU climate change and energy policies. Jenny Preunkert is assistant professor at the University of Leipzig (Germany). With Martin Heidenreich, she is head of the project Europeanization of Social Inequalities funded by the German Research Foundation. She studied sociology, European studies and law at the University of Bayreuth (Germany), Bamberg (Germany) and Galway (Ireland). Antje Wiener holds the chair of political science especially global governance at the University of Hamburg (Germany). Her research specializes in the area of international relations theories and global constitutionalism; her publications include A Political Theory of the European Union (2009), The Invisible Constitution of Politics: Contested Norms and International Encounters (2008), European Union Theory (2003) and “European” Citizenship Practice—Building Institutions of a Non-State (1998). She is a founding coeditor of the new journal Global Constitutionalism (since 2012) and an associate editor of the European Political Science Review (since 2009). She was appointed academician of the Academy of the Social Sciences in the UK in 2011.

296

Contributors

Jan Zielonka is professor of European politics at the University of Oxford and Ralf Dahrendorf Professorial Fellow at St. Antony’s College (Oxford). His previous appointments included posts at the University of Warsaw, Leiden and the European University Institute in Florence. His books include Europe as Empire. The Nature of the Enlarged European Union, (2006) and Is the EU Doomed? (2014).