V. THE CONSEQUENCES FOR NATIONAL PARLIAMENTS OF THE
INCREASING ROLE OF THE EU ON EMU TOPICS AND THEIR ADAPTATIONS411(*)
Professor Gavin Barrett,
University college of Dublin
1. Introduction
Acts adopted in the framework of Economic and Monetary Union are at times controversial, in particular when they result from decisions of the European Central Bank, given the independent and unelected status of this institution, and have sometimes been described as of somewhat precarious legitimacy. Parliaments, including national parliaments, arguably have a strong role to play in making up any deficit here, given the role they are capable of playing in providing input, output and throughput legitimacy. It is appropriate to define these terms. Input legitimacy is present where a decision involves participation by citizens (either directly or indirectly through their elected representatives being involved in decision-making processes). Output legitimacy is present where a lawmaking process produces outcomes for citizens which are effective. Throughput legitimacy focuses on the transparency and accountability of decision-making processes412(*).
Parliamentarism for present purposes has two levels - that of the European Parliament and that of national parliaments. Of course, a very major part of the role of national parliaments' role is constituted by their national legislative role and their role in controlling national governments. But it seems appropriate for them to have other - European-level aspects to their activities as well, in particular (a) where the level at which policy choices are made shifts to European level, thus depriving national-level policy decisions of substance; (b) where European-level decisions introduce major constraints on national policies; and (c) where Member States find themselves compelled to agree to subject themselves to the often traumatic experience of macroeconomic adjustment programmes in order to obtain the financial assistance needed to escape a sovereign debt crisis413(*).
Notwithstanding, however, that in cases such as the foregoing, it seems appropriate that national parliaments have a European role, it may also be that there are inherent limits on the extent to which national parliamentary control can operate effectively. Thus, for example, the fact that national parliamentarians are not usually elected primarily by reference to European issues, but rather by reference to national or even local constituency issues imposes constraints on the national parliamentary resources (of all kinds) that can be dedicated to such matters.
It must be remembered too that there are many different approaches national parliaments can take to European matters. These have been classified in a variety of ways (which may overlap). Rozenberg and Hefftler offer the following taxonomy414(*). There are parliaments that use the so-called traditional scrutiny approach, focusing primarily on whatever legislation is being adopted. Secondly, there are policy shapers, which attempt to influence the policy agenda (and whose activities tend to be associated with ex ante control and the use of mandates for Government representatives in the EU). Third, there are government watchdogs, which seek to impose accountability in respect of measures adopted, for example perhaps by organising hearings after the event of a measure being adopted. Fourthly, there are parliaments which act as policy forums, seeking to attract publicity to the issues, and perhaps using discussions in plenary sessions of parliament in order to do so. Fifthly, some parliaments also act as expert bodies, attempting to influence the debate by hearings and expert reports (Formerly the House of Lords in the UK would have been regarded as the primary exponent of this approach). A sixth form of involvement is where a national parliament seek to act as a European player, which is where Parliament seeks to play a role at European level. This might involve deploying parliamentary representatives in Brussels, taking part in the political dialogue with the Commission (formerly referred to as the Barroso dialogue) and perhaps deploying the early-warning system415(*).
The purpose of the present paper is to reflect very briefly on parliamentary involvement in the rapidly changing landscape of EMU and EU budgetary policy. This is a radically changed landscape in comparison to what went before. This is for two reasons.
a) The outcome of the financial crises
In the first place, changes came about as a result of the financial crises which struck the Eurozone with particular force in the wake of the global financial crisis of 2007-2008.
The events that occurred in the period that followed were to leave a very different legal and institutional topography. Among the many changes that resulted was the acceptance of the deployment of far more wide-ranging monetary powers on the part of the European Central Bank - one need only think of the various asset purchase programmes (quantitative easing measures) initiated since 2014 which have seen trillions of euro pumped into the European economy, followed since March 2020 by an ambitious pandemic emergency purchase programme and preceded by the never-implemented but still vital Outright Monetary Transactions policy announced in September 2012
In the banking field, we have seen the advent of the European Banking Union, with its Single Supervisory System involving a new supervisory role for the European Central Bank and its Single Resolution System involving the creation of a Single Resolution Board (SRB) acting as the central resolution authority within the Banking Union.
Indeed a series of new institutions resulted from the financial crisis, including but not limited to the European Stability Mechanism, the Eurogroup - a body which, if not quite new, then at least was newly-animated by the financial crisis and the Eurosummit.
New processes were also generated by the financial crisis, including, in the budgetary field, the European Semester
b) The outcome of the Covid-19 crisis
Secondly, the impact of the Covid-19 crisis has of course also been considerable. As part of Next Generation Europe, a temporary instrument designed to boost Europe's recovery from the pandemic involving the deployment of over €800 billion in loans and grants, the €672.5 billion Recovery and Resilience Facility was created, leading to the creation in each Member State of a Recovery and Resilience Plan for the purpose of setting out reforms and investments to be implemented by end-2026, with Member States receiving financing up to a previously agreed allocation.
It is proposed to look at parliamentary involvement in EMU and EU budgetary policy in the light of both of these elements.
2. An outcome of the financial crisis- the European semester
The European Semester is a governance framework aimed at both coordinating and monitoring the fiscal and economic policies of EU member states: it is thus at the same time both a coordination and surveillance system. The Semester functions in four steps, the first and the last involving communications from the Member States to the EU, the second and third involving communications in the opposite direction i.e., from the EU to the Member States.
Step 1) Member States EU
The first step of the European Semester involves a communication by Member States to the EU. Member States are requested to submit draft budgetary plans to the European Commission by 15 October each year.
Step 2) Member States EU
The second step of the European Semester process involves communications from the EU to the member states: hence (a) in the first place, the European Commission publishes its Annual Growth Survey (indicating policy preferences which are EU-wide in nature); (b) the European Commission also publishes its Alert Mechanism Report (indicating macroeconomic imbalances); and (c) finally, the European Commission publishes detailed country reports.
Step 3) Member States EU
The third step of the Semester process also involves communications from the EU to the member states: hence the European Council endorses the priorities of the Annual Growth Survey (something which occurs in the month of March each year).
Step 4) Member States EU
The fourth step of the Semester process - like the first - involves communication from the member states to the EU: hence (a) all Member States submit their Stability Convergence Programmes; and (b) all Member States submit their National Reform Programmes (all of which must be done by 30 April)
Ideally, national parliaments are supposed to be involved in adoption of Stability Convergence and National Reform programmes416(*) and of course to monitor what is going on. They may do this but the difficulties which stand in the way of their doing so should not be underestimated. There are several reasons for this. The first is that this involves creating the capability to monitor complex, unfamiliar and opaque procedures417(*). It can involve monitoring that domestic European Semester budgetary procedures are being properly complied with. It can involve similar checking in respect of EU-level European Semester procedures. It can involve checking substantive Government undertakings made in the course of the European Semester process and it can involve checking substantive EU recommendations (e.g., country-specific recommendations) in the European Semester process. Secondly, it involves the difficult task of locating political responsibility in a never-ending cycle of budgetary monitoring418(*). Thirdly, much of the work here is not done by politicians. Nor is it done the Government as such. It is done by officials in national finance ministries talking to Commission officials. It is often technical, detailed work.
Surprisingly, studies have shown that only a third of national parliaments instituted new powers in order to deal with the European semester419(*). Moreover, there have been considerable variations in how different parliaments get on with this and variations in performances of the same national parliaments over time.
Various factors may both affect and operate as indicators of the national approach to the Semester. The first is the general approach of the national parliament concerned to its tasks. Leopards, by and large, do not tend to change their spots. Hence the general strength or weakness of a national parliament may be a good guide as to its proficiency in dealing with the European Semester. It is not infallible, however. It has been noted that the German parliament has not done as well with the Semester as with other fields of EU law (where it combines the functions of a watchdog and a policy shaper)420(*). Conversely - perhaps because the economic effects of the Semester have been greater in some states than others - and somewhat unexpectedly, given their normally rather weak performance insofar as concerns European affairs, national parliaments from Mediterranean countries and Portugal have involved themselves well in European Semester issues.
Secondly, it is worth paying attention to a national parliament's normal budgetary powers concerning the preparation, adoption, implementation and evaluation of the national budget. In reality, a lot of national parliaments lack such powers. In other words, they may not have the institutional resources or the political independence to do a lot in this field.
For some - and I would include my own country, Ireland, in this - the approval of the budget lacks a certain reality: indeed Wehner has actually gone so far as to describe it as a constitutional myth421(*). Obviously, such parliaments start from a position of being ill-adapted to meaningful participation in the European Semester process.
A third factor worth watching for is the presence of legal measures specifically establishing scrutiny procedures for the European Semester. Tailor-made provisions of this nature should obviously assist matters. However, notably few legal systems (or indeed parliaments themselves) have adopted such provisions. One Member State which has done so is Denmark. Other Member States relied on existing procedures (e.g., Finland) or acted using informally adopted procedures.
Finally, political factors can obviously enter into matters. There have been examples - for example, in France - of issues being put to a vote one year and then merely discussed the next year. For a variety of reasons - including the majority (or lack of it) which a Government enjoys - may or may not want to risk seeing budgetary matters put to a vote422(*).
3. An outcome of the Covid-19 Crisis - the Recovery and Resilience Facility
The Recovery and Resilience Facility is the core of Next Generation Europe, the EU's plan for tackling the economic effects of Covid-19. It provides for support for member states via the provision of both grants and loans, which in turn finance projects which are set out in detailed national Recovery and Resilience Plans.
The Recovery and Resilience Facility is based on an EU regulation establishing the Recovery and Resilience Facility initially proposed by the Commission in May 2020 and agreed by Parliament and Council the following December423(*). It is thus very recent. It would also have to be described as weakly politicised424(*) - and much of such politicisation as there is focuses on the European Parliament. There is specific provision for a structured dialogue for questioning the Commission on Recovery and Resilience Facility implantation. These `Recovery and Resiliance Dialogues' are based on the Economic Dialogues and must be carried out every two months425(*). There is also provision for questioning the Commission. The Facility has requirements for frequent reporting and reviews. There is also a scoreboard allowing public access and third parties to monitor developments.
National parliaments are however very weakly involved. They are not actually explicitly mentioned in the regulation, which instead merely requires Recovery and Resilience Plans to have `a summary of the consultation process, conducted in accordance with the national legal framework...and how the input of stakeholders is reflected in the Recovery and Resilience Plan'. The reference to stakeholders here rather than parliaments is both notable and surprising. However, the Commission has encouraged the involvement of national parliaments. Furthermore, the European Parliament has also both called for this to happen and deplored instances where it has not.
We can reflect briefly on three issues concerning national parliaments regarding the Recovery and Resilience Facility/Recovery and Resilience Plans.
a) The role of national parliaments in adopting Recovery and Resilience Facilities
This was actually quite limited. According to research conducted by Dias Pinheiro and Sofia Dias426(*), IPEX (the interparliamentary platform for exchange of EU information between the national parliaments in the EU and the European Parliament) indicates that only six national parliamentary contributions were made regarding the Proposal for a Recovery and Resilience Facility. Of those, only three engaged the political dialogue. The others merely shared information. National concerns related to financing (in particular the issue of the Recovery and Resilience Facility's reliance in the form of loans as opposed to grants), governance and conditionality (thus, for example, rule of law issues)427(*).
b) The role of national parliaments in elaborating Recovery and Resilience Plans
The role of national parliaments in elaborating Recovery and Resilience Plans has been strikingly weak. According to Dias Pinheiro and Sofia Dias428(*), of 33 national parliaments/chambers that responded and whose views were recorded in the 35th COSAC biannual report429(*), only five national parliaments received the national plan before the draft was adopted. The remaining national parliaments/chambers received it too late to do anything with it, and indeed only a further four national parliaments/chambers received it prior to its submission, which was in any case too late to influence its contents. Strikingly, the vast majority (27/33) of national parliaments/chambers did not adopt any resolution/opinion of the plan, although sixteen did say they had scrutinised the document.
c) The role of national parliaments in implementing Recovery and Resilience Plans
In general, we can expect the approach of national parliaments to be linked to their European Semester approach. Indeed, even the design of Recovery and Resilience Plans themselves is linked to the European Semester. Recovery and Resilience Plans have to be consistent with European Semester challenges and priorities. The time of the submission of Recovery and Resilience Plans is the same as that for the European Semester - the same 30 April deadline as for National Reform Programmes. Furthermore, reporting on the implementation of Recovery and Resilience Plans is done twice yearly within the context of the European Semester.
The approach of national parliaments appears to reflect this similarity. It is of interest and perhaps surprising, given the sums involved, that it appears that no national parliament/chamber - except that of Portugal - has set up a Committee specifically to look at Recovery and Resilience Plans/the Recovery and Resilience Facility430(*).
4. Some concluding reflections
The role of the European Parliament and national parliaments one which seems destined to be intertwined: or to put matters in another way, the executive federalism that characterises the way in which the European Union operates very strongly arguably gives rise to need for interconnected Europe of Parliaments. There are various ways in which such intertwining can take place. Interparliamentary cooperation has a key role to play here. An example of this relevant to the present topic is the Inter-Parliamentary Conference on Stability, Economic Coordination and Governance (which is based on Article 13 of the Treaty on Stability, Coordination and Governance in the Economic and Monetary Union). This conference which takes place twice a year - the first time in Brussels during European Parliamentary Week - and is examined in more detail by other contributors to the present work431(*).
It needs to be emphasised that budgetary rules at European level are not necessarily a zero sum game - in other words, gains in competence at European Union level do not always mean a loss in influence for national parliaments. Of course, the European Semester restrains national budgetary policies to some degree. But it also represents an opportunity for national parliaments to gain influence in a budgetary process which may have been less open to such intervention when it was entirely national in nature. Arguably, a stronger European budgetary executive might actually assist the cause of parliamentary accountability by providing a more precise target for accountability mechanisms than has heretofore been available.
* 411 Delivered as a paper to the symposium on the Role of National Parliaments in the European Union, Monday, 6 December, 2021 held in the Palais du Luxembourg organised by the Commission of European Affairs of the Senate of the Republic of France.
* 412 See R. Repasi, “European Parliament and National Parliaments”, Chapter 17 of F. Amtenbrink and C. Herrmann (eds.), The EU Law of Economic and Monetary Union (Oxford University Press, Oxford, 2019) 457 at 458. See further regarding the various forms of legitimacy, Diane Fromage & Ton van den Brink, Democratic Legitimation of EU Economic Governance: Challenges and Opportunities for European Legislatures, (2018) 40 Journal of European Integration 235-248; and more generally, D. Fromage and T. van den Brink (eds.), Parliaments in EU Economic Governance: Powers, Potential and Practice (Routledge, Abingdon-on-Thames, 2019).
* 413 See further Repasi, loc. cit., at 499.
* 414 See O. Rozenberg and C. Hefftler, Chapter 1 “Introduction” in C. Hefftler, C. Neuhold, O. Rozenberg, J. Smith and W. Wessels, Palgrave Handbook of National Parliaments and the European Union (Palgrave Macmillan, 2015) 1 at 27 et seq..
* 415 Ibid.
* 416 See to this effect, the so-called Five Presidents' Report of June 2015 (European Commission, Completing Europe's Economic and Monetary Union available online at https://wayback.archive-it.org/12090/20201010124339/https://ec.europa.eu/commission/five-presidents-report_en).
* 417 C. Lord, “How can Parliaments Contribute to the Legitimacy of the European Semester?” (2017) Parliamentary Affairs 70 673 at 682, cited in V. Kreilinger, National parliaments in Europe's post-crisis economic governance (Unpublished PhD thesis, Hertie School of Governance, Berlin 2019) at 72.
* 418 The description of M. Dawson, “The Legal and Political Accountability Structure of `Post-Crisis' EU Economic Governance”, (2015) 53 Journal of Common Market Studies 976 at 982, and cited by Kreilinger, op. cit., at 66.
* 419 See Kreilinger, op. cit., 67.
* 420 Kreilinger, op. cit. at 70.
* 421 See J. Wehner, Legislatures and the Budget Process: The Myth of Fiscal Control (Palgrave Macmillan, Houndmills, 2010) at 141 cited by Kreilinger, op. cit., at 75.
* 422 See more generally in relation to the subject matter of this section, including the specific approaches of individual Member States, Kreilinger, op. cit., and by the same author, National Parliaments, Surveillance Mechanisms and Ownership in the Euro Area, (Jacques Delors Institut, Berlin, 2016); D. Fromage and T. van den Brink, Parliaments in EU Economic Governance: Powers, Potential and Practice (Routledge, Abingdon-on-Thames, 2019); and C. Fasone, Taking budgetary powers away from national parliaments? : on parliamentary prerogatives in the Eurozone crisis (European University Institute Working Paper 2015/37).
* 423 Regulation (EU) 2021/241 of the European Parliament and of the Council of 12 February 2021 establishing the Recovery and Resilience Facility OJ L 57, 18.2.2021, p. 17-75.
* 424 See generally on this topic, B. Dias Pinheiro and D. Fromage (eds.), National and European parliamentary involvement in the EU's economic response to the COVID-19 crisis, EU Law Live, Weekend Edition No. 36, 7 November 2020.
* 425 See B. Dias Pinheiro and C. Sofia Dias, Parliaments Involvement in the Recovery and Resilience Facility, unpublished paper presented at online workshop Parliaments in times of crises: EMU accountability post-COVID, 18 November 2021 at 5.
* 426 Loc. cit.
* 427 See in this regard T. van den Brink, “National Parliaments and the Next Generation EU Recovery Fund”, in Dias Pinheiro and Fromage op. cit. at 21.
* 428 Dias Pinheiro and Sofia Dias, loc.cit.
* 429 See Developments in European Union Procedures and Practices Relevant to Parliamentary Scrutiny, 35th COSAC Bi-annual Report prepared by the COSAC Secretariat and presented to the LXV Conference of Parliamentary Committees for Union Affairs of Parliaments of the European Union, Lisbon, 31 May-1 June 2021.
* 430 Dias Pinheiro and Sofia Dias, loc. cit., at 11.
* 431 See on this Conference, V. Kreilinger, “From procedural disagreement to joint scrutiny? The Interparliamentary Conference on Stability, Economic Coordination and Governance” (2018) 10 Perspectives on Federalism; I. Cooper, “The Interparliamentary Conference on Stability, Economic Coordination and Governance (the `Article 13 Conference')” in N. Lupo and C. Fasone (eds.), Interparliamentary Cooperation in the Composite European Constitution (Hart Publishing, Oxford, 2016), 247; and by the same author, “The politicization of interparliamentary relations in the EU : constructing and contesting the 'Article 13 conference' on economic governance”, (2016) 14 Comparative European Politics 196.