Today was supposed to be Brexit’s Eve. Though it’s been delayed, its wide impact on the EU has not. This week’s vote in the European Parliament, concerning golden visa schemes and tax harmonisation, is just one of three major reforming thrusts – on tax, democratic oversight and choice of Commission President – we are likely to see in the short to medium term.
Of course, the Brexit referendum’s result had an immediate impact on the EU institutions. Some of the brightest in the Commission were deployed to deal with the negotiations, while every part of the Brussels bureaucracy has had to deal with the implications for policy, budgets and personnel.
Tuesday’s vote, however, is one of the clearest signals of how the UK’s withdrawal will change the very nature of the Union. The UK is the major member state, among those who joined before 2004, that has been consistently sceptical of deepening the Union’s political integration. Its absence will remove a major obstacle from the pursuit of such an agenda. Under the current dispensation, tax harmonisation requires unanimity. In principle, a change requires Malta’s vote, however much the EU Commissioner responsible for tax, Pierre Moscovici, might say the relevant rules need to be changed to a majority vote.
With the UK still a member, the chances of the rules being changed would be impossible. With the UK out, that prospect is still bleak but it’s now dimly possible.
Brexit’s impact goes beyond financial affairs. The very result of the referendum, together with the suspicions of illegal funding and Russian interference, are also being flagged as an issue that may require pan-European attention and oversight.
A European supervisory role has been broached by French President Emmanuel Macron, in a series of reforms he has proposed for a bolstered Europe. In his sights are the populist movements in countries like Italy and Hungary. They have not just friendly relations with Vladimir Putin’s Russia; they’re also allies of the French far right.
Beyond Italy and Hungary, there are member states whose governments are seeing confidence in them soar even as their democratic credentials are weakened.
The Bertelsmann Foundation’s Sustainable Governance Index shows Bulgaria, Romania and Poland scoring weakly, between the 35th to 40th globally (with Malta pegged at 35 with Bulgaria).
It’s evident that Hungary’s ruling political party, currently suspended from the European People’s Party, cannot continue to be members of the EPP for long; nor can Romania’s Social Democrats continue to be members of the European Socialists. Both parties have more in common with the far-right represented by Matteo Salvini’s Lega and Marine Le Pen’s National Rally (the former National Front).
Brexit will also enable the European establishment to return to an older agenda of deepening the Union
Such a political realignment would contribute to a reshaping of the composition of the EP after the May elections. For the first time in 40 years, the combined seats of the EPP and Socialists are expected to fall beneath the 50 per cent threshold. They should still be able to rule with the help of the liberals, but the populists are expected to making a strong electoral showing.
With such a result, we can expect Brexit to have a third impact on the Union – the choice of President of the European Commission.
The EPP and Socialists are, of course, contesting the MEP elections with the claim that the party that wins the most seats will have the right to nominate the Commission President; both have already indicated their respective candidate. But this is a claim, not a fixed rule.
The heads of government went along with it last time, without accepting the principle. A strong populist vote could well provide a window of opportunity for politicians like Macron.
The principle that the Commission President gets to be chosen by a political party becomes double-edged the moment it is possible to imagine that, within 10 years, the party doing the choosing could be a populist one.
Anyone for a President favoured by Viktor Orban, Le Pen and Salvini?
Do not then be surprised if, come June, after the electoral dust clears, the new president isn’t someone nominated by either the EPP or the Socialists. Take a bow, Michel Barnier, EU Brexit chief negotiator, in acknowledgement of your hard work.
If it does happen, it will be a cunning choice. The EPP is likely to win the plurality of seats and it cannot object (well, not very hard) to Barnier – he belongs to the party.
The man pushing him, Macron, will bring on board the liberals. And why should the Socialists have strong preferences between one EPP candidate and another?
Barnier’s expertise goes beyond the internal market and Brexit. He has served as a European defence adviser to the current Commission President, Jean-Claude Juncker.
Another of the deepening policies currently championed by both France and Germany concerns the formation of a proper European army. Once more, the absence of the UK makes the prospect move from the impossible to the improbable.
There is a sufficient crack opened for optimism to shine through so that it becomes a topic that can actually be broached in policy discussions, not merely as a piety.
For too long, Brexit has been discussed in terms of how it enables and gives heart to Europe’s populists. But it will also enable the European establishment to return to an older agenda of deepening the Union, with the moralising justification being that it’s the only way to protect European peace and democracy.
Maltese pro-European democrats have their work cut out for them.
Populism is gnawing away at democracy from within but the kind of federalism currently offered will suffocate it from outside. We need to think hard about what we need and look for plausible alliances.
This is a Times of Malta print opinion piece