As EU governments hurtle forward towards a new fiscal treaty to address the euro crisis, one should not fall into the trap of overlooking the consequences of the method that has been chosen to bring about this latest reform.

It’s time to get the real EU back on track- Simon Busuttil

Of course, time is of the essence and the money markets will not sit idly until governments decide. But, just a second, are we going about this in the right way? I doubt it.

Last December, EU leaders sought to change the EU Treaty to enforce tighter commitments on fiscal discipline. That was fine. However, their plan was botched when the UK slapped its veto and blocked the changes.

Caught between a rock and a hard place, the other 26 EU countries told the UK that they would proceed without it and draw up, instead, a new treaty outside the EU framework. But the devil is in the detail.

Doing it outside the EU framework means that the new agreement would essentially be a classic international treaty, a treaty agreed between governments, that is, on an intergovernmental basis. I see at least three problems with this approach.

The first is that the commitments on fiscal discipline in this international treaty are completely linked to the countries’ commitments as EU and eurozone members.

So it is bizarre, to put it mildly, that new fiscal obligations should be written in an international agreement rather than in the treaty that established the euro itself.

Secondly, an intergovernmental agreement necessarily limits the role of the EU institutions and the EU decision-making process; what is known as the Community method.

Thus, rather than an agreement devised within institutions that are subject to ongoing public scrutiny, we are getting an international agreement negotiated by government representatives in closed rooms. All we are allowed to see is what they agreed but in no way are we allowed to influence the negotiations.

This method significantly limits the role of the European Commission, which should be at the heart of new European initiatives, but more so the directly elected European Parliament and the European Court of Justice.

Ok, there is ample reference to the European Commission and to the Court in the draft treaty. But it is difficult to comprehend how an international treaty to which they are alien can bind these two EU institutions.

There is a third problem that I see: confusion.

The EU is not a particularly simple structure. So confusing matters with a treaty that is created outside the EU structure does not make things easier. It will alienate people even more.

So what to do? Scrap the whole idea?

Well, a simpler way forward could have been to introduce the new obligations through EU laws rather than through treaty changes. This would have obviated the need for an international treaty outside the EU framework. EU law often does not always require unanimity and the UK would not have been able to veto it. Indeed, it is through EU law that, late last year, we adopted new rules to secure tighter fiscal rectitude and gave new powers to the Commission to make sure that national budgets respect these rules. It is as a result of these rules that Malta – along with other countries – has already been asked to trim its Budget this month. In turn, the Commission has publicly acknowledged that our deficit will now be lower than three per cent this year and next (unless the scenario changes in Malta, of course).

Certain other obligations, such as the commitment to introduce the golden rule of sound public finances into national Constitutions, could also have been agreed without a treaty change. After all, national Constitutions are changed through a national process.

So the need to go for a new treaty, let alone an intergovernmental treaty, is questionable. It also demonstrates that intergovernmentalism – or the predominance of national governments – seems to be striding ahead at the expense of the Community method, that is, of doing things within the EU set-up.

For those who rail against the EU as an affront to national sovereignty this may come as good news. But intergovernmentalism carries a high price. The predominance of national governments necessarily means that the strongest countries prevail. That explains the irritating practice of seeing the French and German leaders meet in a duo and come up with positions or decisions that they then expect everyone else to endorse.

This is not the way to conduct EU business and it is precisely this predominance of one or a few countries in an intergovernmental process that the EU – and its Community method – was born to overcome.

It’s time to get the real EU back on track.

simon.busuttil@europarl.europa.eu

Dr Busuttil is a Nationalist member of the European Parliament.