Danny Nicol finds that the European Union is not an empty vessel into which any political content may be poured.
Can it accommodate not just neoliberal conservatism but also Keynesian social democracy, hard-line greenery and even pro-nationalisation democratic socialism? A new UK campaign, “Another Europe is Possible”, would have us believe this, and is touting for votes in the EU referendum on the basis that the Union can be changed into a more socialistic entity, “not [by] a network of politicians but grassroots activists across the UK”. The same optimism is apparent in the Democracy in Europe Movement 2025 (DiEM 2025) in which Mr Yanis Varoufakis looms large. With the ferocity of tigers protecting their young, these progressives attack those who single out the EU as a hotbed of neoliberalism. ‘Can you name an institution not dominated by neoliberalism?’ argued Marina Prentoulis of Syriza UK at the launch of “Another Europe”: ‘National governments are pushing a neoliberal agenda too’.
It speaks volumes that Syriza, a party implementing austerity at the EU’s behest, is accorded star billing in this supposedly anti-neoliberal venture. Overlooked are the constitutional differences between the EU and most European states. The possibilities for progressive or socialistic advance in any political community depend to a significant extent on the constitutional structure of that entity. If those seeking such advance are serious about achieving a more equal society, they need carefully to weigh up the institutional potential of any given polity. In fact in the context of the European Union there has been no such debate on the British Left. This is hardly surprising. The long record of failure of British socialists may be attributed at least in part to a perennial unwillingness to engage seriously in questions of strategy.
Yet outside the fairyland inhabited by “Another Europe is Possible”, constitutions do matter. Take the USA for example: a country with a constitution which is difficult to amend, save by judicial reinterpretation. Its system of government is famously one of checks and balances, though with normally no check on the Supreme Court beyond its sense of self-restraint. As a result progressivism has been constantly placed at a disadvantage. The New Deal, public healthcare and gun control have all in turn been dogged and retarded by various aspects of the American constitution. However, the US system of government shines as almost a beacon of hope by comparison with EU structures.
This is because the EU Treaties not only contain procedural protections for capitalism, as is the case in the US Constitution: they also entrench substantive policies which correspond to the basic tenets of neoliberalism. Let me give a few examples. First, Articles 107-8 TFEU empower the European Commission to vet state aids for their compatibility with the single market. This includes state aids to the public sector. The system also allows private corporations to challenge grants of state aid on competition grounds. Secondly, free movement provisions of the Treaties have been interpreted by the Court of Justice as prohibiting industrial action which “disproportionately” obstructs the free movement of goods, services, capital and workers – see the Viking and Rüffert rulings of the EU’s Court of Justice. Thirdly Article 49 TFEU grants companies the right of freedom of establishment. This includes the right to establish branches and subsidiaries in other Member States. It is difficult to imagine how nationalisation of branches and subsidiaries of companies based in other Member States would constitute a lawful limitation on freedom of establishment. For good measure Article 106 TFEU gives corporations the right to sue governments whenever any public monopoly infringes EU competition rules – including within the NHS.
None of this would matter very much if these provisions were easy to amend or repeal. However, being Treaty provisions, these policies may only be changed by agreement of all Member States. The methods of Treaty amendment are laid down in Article 48 TEU. Under the ordinary revision procedure the Member States must agree by common accord the amendments to be made to the Treaties. Under the simplified revision procedures (used to revise Union policies) the European Council shall act by unanimity. In each case the changes must be confirmed by all the Member States in accordance with their respective constitutional requirements. Crucially, irrespective of which procedure is used, it only takes a single national government to veto treaty change. One would have to await a complete absence of neoliberal governments in order to change the Treaties in a socialistic direction. Such is the stuff of fantasy.
EU legislation and the TTIP
It might be thought that outside the realm of Treaty revision, life for progressives might be easier. With friends in the European Parliament and some in the Council, EU secondary legislation might somehow provide a means of socialistic advance. I am not so confident.
Take the privatisation of public utilities. The socialist position would surely be that Member States should determine the size of their own public sectors. However, the EU liberalisation legislation tends to consolidate privatisation. Nationalising sectors such as gas, electricity, telecommunications and postal services is forbidden by giving rights of market access to corporations. This prohibits the sort of extension of public ownership brought in by the 1945 Labour government. New public enterprises have to compete with private firms in a capitalist market. But this arrangement is not socialist: it equates to the “competitive public ownership” craved by Anthony Crosland in his efforts to wean the Labour Party onto capitalism after the 1945 era (See C.A. Crosland, The Future of Socialism, London: Constable, 2006). Publicly owned companies are thereby compelled to act more as if they were private companies, particular when the Treaty provisions on state aids are taken into account. Similar legislation on railways is presently going through the EU institutions.
It might be argued that liberalisation legislation is the product of EU democracy and could be repealed by democratic means. However the Council and European Parliament do not operate in an ideologically-impartial constitutional environment. Whilst the liberalisation measures were enacted by qualified majority voting on the Council, their repeal would be harder to achieve, because of the complication of identifying the correct legal base for any such legislation. Imagine that a national government sought to introduce EU legislation to allow all Member States a free choice over the public or private ownership of their energy, postal, telecommunications and rail sectors. It would have to rely on the Commission – the very architect of EU liberalisation – putting forward a proposal to the Council and Parliament. Furthermore the only legal base which is in any way credible would be Article 352 TFEU which requires the Council to act unanimously. We are back to square one: a single national government can veto socialistic advance.
Another measure which animates socialist circles is the TTIP, the Transatlantic Trade and Investment Partnership currently being negotiated with the USA. There is concern that TTIP will enable companies to sue governments where state measures harm profits. Assuming TTIP is agreed before the next UK general election, the prospects of the EU discarding it rely on even more outlandish fantasies. Assuming withdrawal is permissible, there is no provision in the TEU and TFEU specifying how the EU goes about withdrawing from a treaty. Would one have to fall back on Article 352 TFEU, with its unanimity requirement, once again allowing a single neoliberal government to save the EU’s adhesion to the TTIP? It may be that the only way to discard TTIP is – horror of horrors – to violate international law, something far easier for a state to undertake than for the EU.
There have always been parts of the British Left which have elected to deny the significance of constitutional provisions in making their strategic choices. Instead they have clung to a belief in spontaneous combustion. With the zeal of born-again evangelistic sects (with whom they have much in common), they convince themselves that the people will somehow rise up from below and sweep aside all obstacles to social justice, including constitutional ones. The passage of decades, even centuries, when this doesn’t happen does nothing to dampen their faith.
Against this backdrop whilst there can be no objection to people pressing to make the EU more left-wing, such campaigners bear the responsibility of explaining how they will achieve their objectives in the face of the requirements of unanimity and common accord. As it presently stands, these requirements make substantial socialistic advance virtually impossible to achieve. Unless those who seek such change face up to the constitutional obstacle that confronts them, the only progressive reforms to materialise will be confined to the realms of their own minds.
Danny Nicol is Professor of Public Law at the University of Westminster.
This article first appeared on U.K. Const. L. Blog (29th Feb 2016) (available at https://ukconstitutionallaw.org/))