Democracy and European Integration
How the EU Political-Industrial Oligarchy Is Gambling Away Our Democratic Future
An Article in the Compendium of Market-Based Social-Ecological Economics
Key issues in view of the neoliberal crisis:
How can we guarantee employment and fair income?
How can we protect the environment effectively?
How should we shape the economic globalization?
What should the economic sciences contribute?
What must be the vital tasks of economic policy?
How can we legitimize economic policy democratically?
Click here for the list of all articles: Compendium
Click here for the short version with chapters 1, 6 and 7: Undemocratic EU Institutions
Click here for the German-language version: Demokratie und europäische Integration
Table of Contents
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1. Overview
After more than 60 years of encouraging progress in democratic awareness in Germany and other European countries the time has come to complement the representative form of public authority emanating from the people with an appropriate direct participation of the people, that is, with citizens’ initiatives and referenda at all levels, including the federal level.
However, the demand for plebiscitary supplementation is not only logical, it is a necessity because the political representatives now feel more committed to the interests of the economically powerful than to the legitimate concerns of the citizens. The closeness of political and economic elites is not a new phenomenon, but it threatens to stifle democracy in Germany and Europe in the course of European integration, intensified by economic globalization.
In the course of the European integration it can be observed that (1) political and economic decisions are being taken in closed supranational circles, that (2) an industrial policy reduced to capital interests is regarded as synonymous with general economic policy, that (3) the European integration is being corrupted by unleashed economic power, and that (4) the political-industrial protagonists undermine the democratic foundation consisting of sovereign nation-states to subject Europe to the dictates of their oligarchic self-interest through supranational institutions detached from political reality. It is not surprising that it is the same oligarchies that are carrying out their nefarious deeds on the global level, concentrated there in the equally rapturous World Trade Organization. As a supplement see the article World Trade Organization (WTO).
Thus, the European Union (EU) poses a specific threat to the democratic structures of its constituent states, because, under the pressure built up by oligarchic self-interest, national governments and parliaments are inconsiderately conferring national powers to European institutions. To institutions which do not bear responsibility before the sovereign people of the EU Member States, and which are not subject to democratic scrutiny and therefore are not democratically legitimized. This also applies to the so-called European Parliament (EP).
For what follows, it is crucial to be aware that the EU does not represent a pan-European constitutive peoples, and that, consequently, the EU does not possess popular sovereignty, and that the latter could only be established if all nation-states gave up their sovereignties in referenda with the aim to integrate them into a supranational European sovereignty.
But, above all, it’s the existing political, socio-cultural and economic inhomogeneity of the continent that stands in the way of integrating the nation-states into a federal European superstate. In light of this reality only a confederation of sovereign nation states is conceivable as a future-oriented model of integration (see also EU: Federal Superstate or Confederation?).
The political-industrial interest groups have nevertheless managed, by means of clever indoctrination, to set a development towards a centrally controlled Europe in motion that allows them to pursue their goals free of democratic »disturbances«.
As for now, the European Parliament serves as a »fig leaf« to camouflage the undemocratic intensions and interests of the political-industrial protagonists. It is obvious that this parliament can not claim democratic legitimacy, since it lacks an explicit constitutional foundation. Its members are a mixed-up bunch of national candidates elected by national voters. Accordingly, the »European elections« are a cheap farce.
In their function as the fig leaf of the EU oligarchy, MEPs naturally suffer from not being taken seriously by the EU bureaucracy’s inner circle of power. Because the real power is exercised by the other, democratically likewise not legitimate institutions: the European Council, the Council of the EU (Council of Ministers), the European Commission, the European Central Bank, and in a particularly presumptuous way by the European Court of Justice, which has empowered itself to exercise jurisdiction over all national courts.
And so Europe is heading towards a federal superstate whose pseudo-democratic authorities are attracting more and more powers and seeking to use them to govern the continent through central directives. The increasing disenchantment of EU citizens with politics and their falling turnouts at the European elections is an indicator and alarm signal for the lack of transparency and rejection of the European integration process and the isolation of the EU bureaucracy.
2. Inhomogeneities and Commonalities in the EU
The further development of democracy in Germany and other European countries, which I have mentioned at a glance, can only be discussed and shaped in the light of the developments described, taking into account the devastating influences of European integration and globalization. More precisely, further development must take place within national sovereignty, and this includes the sovereign arrangement of cooperation and integration with other European nations as well as the political and economic interfaces with the rest of the world.
The EU today (2019) consists of 28 nation states whose historical developments differ greatly from one another due to their respective membership of language communities and political alliances, their degree of independence, and their ethnic roots. Despite these differences, there is a pronounced sense of belonging to Europe across all national borders. This feeling is a result of geographical proximity, the many migratory movements and ethnic affinities, cultural inseminations, far-reaching economic interdependencies, and not least the terrible experiences of war that have been etched into European memory for centuries, to which no one wants to add any more.
It is no exaggeration to say that, through their interdependencies and shared experience, the peoples of Europe feel that they belong to a continental community that is striving for closer cooperation and cohesion, not least in order to help shape the future of globalization. And since there are both great national inhomogeneities and pronounced European commonalities, the status quo can be used to derive a promising political imperative:
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A continued independent and democratic development of the individual nation states must be ensured as a decisive prerequisite for forming a stable long-term foundation on which integration in all its diversity and variety can take place at all. Europe is ideally equipped to embark on the path of integration into a confederation of sovereign nation states. Any ambition to quickly overcome the historical peculiarities, as is currently attempted under the dictates of economic interests – particularly drastic within the Eurozone – destroys the continent’s unique diversity worth preserving and alienates citizens from the ideal of a European future under one roof. |
It is to be hoped that all Europeans who still dream of the United States of Europe as a centrally governed federal state will wake up and take note of the real European nightmare into which the selfish rustling of a supranational oligarchic rule of industrialists, politicians and compliant economists has already driven us. The Eurozone, especially Greece, provides the perfect illustration of this nightmare.
The Inhomogeneities
As I said, the national differences are large. For a number of them one would wish for a quick alignment at as high a level as possible, with others, it seems hopeless, although difficult for foreigners to comprehend, because they are based on traditions, still others are supranationally compatible without restriction or even enriching. Whether and in what period of time a desirable harmonization can be achieved politically while preserving diversity is all written in the stars. A fixed timetable for harmonization, even more so a binding one for all countries, is therefore fundamentally out of the question and, as current attempts at integration suggest, would not be feasible at all – at least not if prosperity and welfare serve as benchmarks.
That a generally binding timetable is out of the question applies to political and socio-cultural factors, but above all to the factors that determine economic productivity. The euro zone, which can be described as one of the largest field experiments on a living organism, has for years provided evidence of the repressions and ruinations to which economically less productive countries are exposed when they compete with more productive countries in prices of a unified currency! »A unified currency is the result of a successful state foundation, not its prerequisite«, says Roger Köppel, whom I quote in detail in the last chapter.
The 24 languages spoken in the EU are not the only, but the fundamental intra-European difference. A closer look reveals the whole spectrum of contrasts …
… in the political sphere: constitution, federalism/political subsidiarity, direct participation of citizens (referenda), legal system, tax system, administration.
… in the socio-cultural sphere: language, culture/traditions, educational system, social system/solidarity, environmental awareness/ecology.
… in the economic sphere: natural resources, research and development, intellectual property, industrialization/physical capital, entrepreneurship, agriculture, production structure/economic subsidiarity, first versus second labor market, vocational education and training, equal distribution, productivity, wages/purchasing power, banking system, current account balance, global interconnection.
The Commonalities
The feeling of belonging together of the citizens of Europe across national borders derives from many periods of common history, surprisingly largely independent of whether and to what extent the individual peoples or countries were involved in certain historical developments.
Worth mentioning here in particular are the beginnings of science and democracy in ancient Greece; the influence of the Roman conquests and the Latin language, also on jurisprudence; the spread of Christianity; long-range trade; aristocratic marriage policy; the arts; enlightenment and secularization; the emergence of the modern humanities and natural sciences; the technical revolution and industrialization; and finally, in the twentieth century, the experiences of two world wars and the division of Europe, which shaped awareness of the importance of human rights and peaceful coexistence.
3. Importance of the Nation States in the EU
Medieval state-building through territorial conquest was challenged in the early nineteenth century by the emerging awareness among citizens of belonging to a unique, self-determined community defined by language and proximity. The nation states emerging in this consciousness were sustainably confirmed by the French Revolution in their endeavor for self-determination (autonomy) and a people’s sovereignty including all social strata. The resulting national consciousness and national pride led to emotional emancipation from neighboring countries, but also to nationalist excesses and the wars of the nineteenth and twentieth centuries. Today, Europe can be considered cured of nationalism – with the exception of the eastern edges of the continent.
The following fact is now of decisive importance for the European integration: Only the constitute peoples of the nation-states are sovereign, the term people’s sovereignty applies only to them. Europe, on the other hand, is not a state and cannot be a state, because the political, socio-cultural and economic inhomogeneity of the national peoples does not allow a merger into a unitary European state in the foreseeable future. That is why no European constitution can be created at the supranational level and no European people’s sovereignty can be claimed – at least not under democratic conditions.
Since the preconditions in Europe for a merger of the nation states into a single federal state are lacking, political reason requires that European federal illusions be abandoned and, instead, the given preconditions be accepted and the opportunities for shaping a European confederation of sovereign nation states be pursued. In doing so, no one should be guided by the widespread misconception that the few good impulses of the current development so far, for example in human and environmental rights, should be weighed against the profound social devastations and the de-democratization. For all the good could be achieved in a confederation of nation states without the growing disadvantages of the current development towards a centralist federal superstate.
For the successful formation of a confederation of nation states it is indispensable to make a clear distinction between powers which concern inhomogeneous areas, as summarized above, and which must be exercised nationally, and powers which can be exercised supranationally, at the European level, because they clearly serve common, »homogeneous« interests.
With regard to the political, socio-cultural and economic inhomogeneities of the nation states it follows:
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that the European level, in the exercise of a political function affecting political, socio-cultural and economic concerns, can currently represent no more and no less than a platform for agreements on common normative objectives on an equal footing between representatives of the sovereign nation states with subsequent autonomous implementation of the options by the nation states. |
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Normative objectives in the political domain include: alignment of national constitutions; implementation of federalist/subsidiary political structures; implementation of equal conditions for referenda; alignment of legal, fiscal and administrative systems. |
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Normative objectives in the socio-cultural domain include: alignment of educational systems and systems of social solidarity; promotion of environmental awareness; alignment of environmental standards. |
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Normative objectives in the economic domain include: standards for the following areas: decentralized (subsidiary) production structures with regard to decentralized responsibility and high employment levels; entrepreneurial legal structures and entrepreneurial action; decentralized, citizen-oriented banking system focused on lending from savings deposits (decentralized monetary cycles); trade in scarce natural resources; regulation of intra- and extra-European foreign trade and capital movements; national autonomy on currency, capital flows, goods flows and customs duties with regard to equitable balances of payments; price- and productivity-related European exchange rate system, including interfaces with non-European currencies; labor market and control of productivity-related wages with regard to equal distribution and intact economic cycles; vocational education and training; mutual assistance in industrialization and technology transfer; active, future-oriented participation in shaping economic globalization. |
With regard to the historically constituted commonalities of the nation states it follows:
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that the nation states can establish joint project groups and institutions at the European level that perform tasks of common interest and, if appropriate for reasons of effectiveness and efficiency, can delegate revocable powers to the institutions. |
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The tasks of common European interest include: external security and military cooperation; joint foreign policy presence wherever possible; principles for development aid (helping people to help themselves); health policy principles, for example for disease control; judicial and police cooperation; technological projects (research and development); technical standardization; intellectual property protection and trade; promotion/preservation of European languages, cultures and traditions … |
Note on intellectual property: trade in intangibles is different and much easier to regulate than trade in goods, for details see the article Intellectual Property and Neoliberalism.
With given national sovereignty this means: agreements, which are made by representatives of the nation states at the European level, are basically binding only on those nation states, which have expressly consented to the agreements by virtue of their people’s sovereignty. Consequently, no nation state can be overruled by supranational agreements. And further: every nation state can revoke any agreement at any time by virtue of its people’s sovereignty for its own scope of application. Unanimity can never be forced, because otherwise the people’s sovereignty of nation states that do not agree would be violated and the decision-making power would be gradually transferred to a democratically unlegitimated supranational bureaucracy (as we experience it today in the EU).
It is an international legal »trademark« of people’s sovereignty that it is in principle not bound by any eternity clauses in treaties between sovereign peoples. Every sovereign people can make a new decision at any time, most effectively if it can articulate itself directly through referenda. To this end, European integration can be expected to be nothing more than a multi-speed Union. This would have the advantage for the Union as a whole that individual states could at any time act in a progressive manner and carry the majority along with them. In the case of national sovereignty, there is also no need for sanctions based on individual agreements against states remaining behind or unwilling to comply, so that only in the case of extreme incompatibility a country could be ostracized and in the worst case be threatened with exclusion from the Union.
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With regard to the political, socio-cultural and economic inhomogeneities within Europe, a very slow process of harmonization must be assumed in the course of which advantageous alignments shall be sought, without gambling away the diversity based on autonomy and peculiarities. With regard to the historically constituted commonalities, a very rapid integration can take place in performing the tasks of common interest mentioned, so that Europe can act globally as a confederation of nation states with strong common interests and convictions. |
Despite the clear conditions under international law, the debate about the best way to European integration repeatedly raises the question of which powers the nation states should irrevocably transfer to the EU institutions. According to what has been said so far, this question leads the debate onto thin ice, because the national sovereignties of the people are fundamentally inviolable, and, in the light of the inhomogeneities mentioned, a European constitutive people is not in sight for the foreseeable future. National powers, which are nevertheless recklessly and irrevocably ceded to EU institutions by national governments and parliaments, are a betrayal of one’s own people and lead to a direct loss of democracy – mostly favored by the fact that referenda are not provided for at the national level. As a supplement see the article Importance of Nation States in Europe.
4. Basics on the Nature of Democracy
On the history and constitution of democracy:Democracy is rule by the people for the people. What sounds so simple and convincing, however, only emerges from a lengthy process of liberating a people from authoritarian claims of individuals or groups and their ideological justification. This includes the liberation from clericalism of religious organizations.
Thus two independent spheres emerge in modern democracy: a state policy sphere and a private ideological-religious one, which, in order to coexist, must grant each other autonomy, just as the different private spheres must respect each other’s self-determination. All ideologies and beliefs and their practical exercises are thus assigned to the private sphere.
In order to coexist, a strict separation of the institutions of the state from those of the private communities is mandatory, and finally, based on practical reason, the secularization of the state policy sphere and its decisions is also absolutely vital. The fact that the process of secularization has not yet been completed is demonstrated by the debates currently taking place in Western democracies about, for example, the rights of non-marital partnerships, euthanasia and sexual ethics.
In the course of its liberation process, a people becomes a responsible constitutive people, a sovereign of the state – hence the term peoples’ sovereignty. Meaning that the people become responsible citizens who know how to distinguish between their political and private degrees of freedom. »All state power emanates from the people«, is therefore stated in Article 20 of the German Constitution (Grundgesetz) of 1949. The constitution which the people decide to choose usually marks the beginning of the institutionalization of a democracy. A genuine democratic constitution is always an expression of sovereignty, freedom and the rule of law, and, in order to be binding and unassailable, a constitution must basically relate to a geographically defined state (nation state) and the people living in that state. It is therefore reasonable to say that the terms nation-state and constitutive people are synonyms.
The purpose of a constitution is also to clearly state those values that are non-negotiable and are beyond the scope of democratic discourse. This includes, above all, the respective stage of development of basic and human rights, increasingly also the rights of the remaining nature, and in the future, so is to be hoped, also the special basic economic rights. But the peoples’ sovereignty itself must also be protected from restrictions. Transfers of sovereign powers, for example, to institutions outside the state should in principle only be permitted for a limited period of time and for revocation. And even the federal (subsidiary) structure of a state can be anchored in the constitution of a state or its amendment protected by high plebiscitary or representative hurdles, as is the case in the German Constitution.
Great caution is required when transferring sovereign powers to supranational institutions, because the principle applies that the combination of supranational sovereignty and democracy is a contradiction in itself. The peaceful unification of inhomogeneous peoples and nation states into a supranational federal state with a common national consciousness is an illusion. At first glance, Switzerland seems to refute this statement. But the dominant Alemannic ethnic group has also extended its territory in part by warlike conquests, which continues to have an effect in Ticino to this day. But despite these experiences, the Swiss Confederation lasts because its linguistically and culturally different ethnic groups (and cantons) grant each other maximum autonomy, and also because its ethnic groups do not share the national consciousness of their European neighbours of the same language, simply because the nation states surrounding Switzerland and their respective national consciousness have historically been formed at a later time. Switzerland is therefore de facto a confederation of largely autonomous cantons with a very selectively empowered federal government.
It is not without reason that the Swiss are suspicious of the centralist development of the European Union because it runs counter to their experience that peoples’ sovereignty and democracy presuppose decentralized (subsidiary) structures and powers. But the Swiss also keep their distance from the EU because they face intercultural misunderstandings and friction among their own ethnic groups on a daily basis and therefore consider supranational-federal integration the greatest stupidity to be assumed. In short, Switzerland is a national exception and does not serve as a blueprint for a centrally governed European federal superstate, but it can serve as a model for decentralized autonomy and direct democracy.
It should be noted that powers that are irrevocably transferred to supranational institutions in disregard of peoples’ sovereignty and international law are removed from democratic control and then inevitably serve oligarchic interests. This principle is becoming very important in the current context of European integration, particularly because it is being violated with increasing negligence.
On democratic decision-making processes:: To practice democracy in an advantageous way, it is not speed and supposed efficiency that are decisive, but good preparation and the hearing of all arguments. Only if the political debate among citizens is understood as a normal, everyday process can a community protect itself from being influenced by group interests or ideologized majorities. The charm of democracy lies in its vitality, in the fact that it involves all parties concerned, masters changing challenges and further develops its own framework of rules and the sense of justice of its citizens.
A sure indication of the vitality of a democracy is the tension that regularly builds up between »popular sentiment« and »professional law«, leading to the question: Can everything be right (or lawful) that democratic decisions produce? But even if we considered democracy to be only slightly better than other forms of government, it would be logical for the judicial system to bow to the sovereign’s will – with the exception of basic and human rights. Because it is not the current state of a democratic community that is significant for its welfare, but its ability to constantly develop further. In other words, there are no permanent claims to truth and validity in democracy. What ever has been established as todays majority opinion can already be rejected by a new majority tomorrow.
Switzerland, which has already been mentioned, repeatedly proves with its referenda who is the sovereign in the country. The recently successful initiative against »mass immigration« exemplifies the conflict between popular sentiment and professional law, this time with regard to the bilateral agreements concluded with the EU, especially the free movement of persons. For the EU, this is a new lesson in direct democracy. The EU’s aggressive reactions show how poorly developed democratic awareness is in the EU and how direct democratic participation in the EU is systematically degraded and suppressed.
On the substance, we must honestly note that the current freedom of movement depopulates the EU’s backward countries and reduces their opportunities for autonomous development, thereby threatening to widen the prosperity gap in the Union. The simultaneous overpopulation of the advanced countries still seems to be easily compensated. In densely populated Switzerland, the freedom of movement agreed with the EU, and beyond, has already led to noticeable overloading of infrastructure, wage dumping and rising rents. This development in particular has apparently been the decisive factor in the initiative for the dependent urban population. Ticino, which is flooded every day by Italian border crossers, is particularly hard hit by the burdens. The rural population also used the initiative to protest against the dissolution of farming structures, pointing to the political background of free trade and free movement: the neoliberal dogma of deregulation of all economic processes. Obviously, in addition to social aberrations, the public is now also becoming aware of the devastating ecological development, in particular the sealing of agricultural land, the crowding-out of family-run farms and the increasing dependence on industrially produced and imported foodstuffs. If we as EU citizens take equal opportunities among EU countries and the preservation of decentralized structures as a yardstick, then the Swiss have reminded us with their initiative of the need for autonomous national economic and migration policies.
An institutionalized democratic culture of conflict, which is practised subsidiarily across all levels of a community, as in Switzerland, ideally forms the centre of political life. On the basis of grassroots democratic (plebiscitary) and market-economy principles, a rationally founded capacity for criticism can develop, which is sustained by the freedom to question the respective order with its procedures and rules at any time. The liveliness of direct and regulated engagement of all citizens ultimately creates a locally anchored and globally effective community. Against this background, it is time, as mentioned in the overview, to supplement the representative form of the state power emanating from the people in Germany and other European countries with appropriate direct citizen participation, especially at the federal level.
Experience also shows that centralist-oligarchic decisions always exhibit authoritarian, selfish and ideological imbalances, that they are difficult to revise and have almost without exception caused damage in the history of mankind. That is why even the slowest and most laborious democratic decision-making is superior to the supposed efficiency of overhasty and selfishly irrefutable oligarchic decisions, mainly because the learning progress and the insight of those who are directly affected by decisions are most significant in the democratic process. The citizens’ political maturity, which is so readily disparaged, is the crucial capital that needs to be increased in order to shape a future worth living.
As a supplement I recommend the articles Principles of Democracy und Subsidiarily Structured Democracy.
5. Self-Service, Self-Empowerment and Neoliberalism in the EU
Remuneration and lobbying in the EU: The EU budget for 2014 amounts to 142 billion euros, with 64 billion for »smart and inclusive growth«, 59 billion for »sustainable growth and natural resources« and 8.4 billion for administration. The high expenditures for growth testify to the neoliberal European credo that growth is the prerequisite for jobs as well as social and ecological justice, to which all other economic policy objectives are to be subordinated. A credo that the EU oligarchy represents with zeal and – in the face of saturated markets – with no prospect of success.
The EU employs around 48,000 people, 33,000 of whom work for the Commission alone. In addition, there is an unknown number of employees in external agencies and companies. The EU civil service is more attractive than any other civil service in the Member States with its high salaries of between 2,300 and 16,000 euros per month, plus expatriation allowances, family allowances and low taxes, a pension scheme, early retirement age and its relatively short working week. According to the newspaper »Welt am Sonntag« of 2 February 2014, 4365 EU civil servants receive a monthly salary, including their expatriation and family allowances, that is higher than the German Chancellor’s basic salary, and 8752 EU civil servants receive more than a German federal minister.
The 751 EU parliamentarians also enjoy high remuneration. They currently receive a basic salary of just under 8,000 euros plus 4,000 euros as flat-rate reimbursement of expenses and a daily rate of 304 euros for each day of committee work. The commissioners are paid almost princely with a monthly basic salary of 19,900 euros, vice-presidents with 22,100 euros and the president with 25,300 euros. In addition, Commission members receive a transitional allowance of 40-65 percent of their basic salary for three years after leaving the Commission, as well as old-age pensions of up to 70 percent of their basic salary.
Because of the high remuneration it is common and very successful practice to recommend disagreeable politicians for European positions. Freed from the domestic obligation to justify their actions and decisions, the exiles there practice the perfection of bureaucratic patronizing from the very top – usually to the annoyance of those who at home still owe account to the voters. The army of overpaid EU busybodies manages to marginalize Europe’s citizens and gamble away the continent’s democratic future.
Around 20,000 lobbyists from companies and business associations exert influence on the EU institutions by proposing legislation and amendments. For the implementation of the Transatlantic Free Trade Agreement (TTIP) currently under negotiation, it is planned to grant industrial lobbyists even earlier and more comprehensive access to the European legislative process.
The self-empowerment of the EU institutions: The example of the ratification of the Lisbon Treaty illustrates the gap between the sovereignty of the people guaranteed by the German Constitution (Grundgesetz) and the transfers of sovereignty rights to EU institutions by the government and parliament. The statement of the German Federal Constitutional Court (BVerfG) on the ruling of 30 June 2009 states on the one hand:
»For the accession to a European federal state, Germany would have to create a new constitution, which had to include a declared renunciation of the sovereign statehood guaranteed by the current Constitution. Such an act is not present here.«
On the other hand, the Court points to a practical danger:
»The assent law for a European amending treaty and the accompanying domestic legislation must be designed such that European integration will continue on the basis of the principle of limited isolated authorization, without the European Union being able to seize competence-competence or to violate the integration-resistant constitutional identity of the Member States, in this case the German Constitution. …The increased transfer of competences and autonomization of decision-making procedures, which the Treaty of Lisbon further confirms, therefore require effective ultra vires and identity control of legal acts of European origin within the scope of application of the Federal Republic of Germany.
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The principle of limited isolated authorization means that the legislation of the EU institutions, i.e. the transfer of powers to the institutions, must be limited to the primary rights agreed in the EU Treaties. Competence-competence must therefore not be transfered to EU institutions; i.e., their competence must always be limited such that they cannot acquire further competences on their own authority. Ultra-vires are legal acts that go beyond an existing legal framework. The BVerfG therefore very clearly sees the danger that the EU institutions could (mis)use the limited isolated powers being transfered as a basis for expanding their area of competence contrary to the Treaty, and it therefore declares the accompanying domestic legislation to the Treaty unconstitutional »insofar as (domestic) legislative bodies have not been granted sufficient rights of participation«.
Despite the concerns, the Lisbon Treaty was ratified on 25 September 2009 after the accompanying domestic legislation had been amended to the effect that the German federal parliament has to give its approval in cases of »fundamental shifts of power» to the EU. However, because the »limited isolated powers« are granted to the EU without the consent of the people, and because the caucus discipline in parliament leaves the government, while being fixated on industrial policy and export growth, largely free rein, the shift of power towards the EU continues bit by bit.
The gap between the German constitutional guarantee that all state power emanates from the people and the contrasting sell-out policy pursued by parliament and government, could only be closed by the BVerfG making referenda mandatory in case sovereignty rights threaten to be ceded even by means of individual isolated authorization. However, the court seems to be afraid of the powerful European process of integration – which is in fact based on a neoliberal industrial policy – and is thus getting into complicity with the ruling EU oligarchy, which shuns nothing more than direct influence by the citizens of Europe.
The neoliberal interaction of EU and WTO: The EU and the World Trade Organization (WTO) resemble each other in that they develop an increasingly uncontrollable life of their own, as is apparently typical of supranational bureaucracies. Both indulge in an economic policy aimed at worldwide export growth, which causes a constant conflict between ever new demands for entrepreneurial freedoms on the one hand and necessary social and ecological framework conditions and regulations on the other. The unbalanced power relations, mainly resulting from a lack of democratic influence, regularly lead to capital interests being enforced against the interests of dependent employees and the environment. As a supplement see the article Excesses of Capitalism.
6. The Democratically Not Legitimized EU Institutions
6.1 The European Council (Council of Heads of Member States)
The European Council brings together the Heads of State or Government of the EU Member States. The Council usually holds quarterly meetings – the so-called EU summits – to prepare reforms of the EU treaties and to decide unanimously about strategies and guidelines for the further integration to be imposed as binding directions upon the Council of the European Union (the Counsil composed of national ministers) and the European Commission. For certain policy areas the European Council may overrule the actually required unanimity in the Council of the European Union and impose a majority decision so as not to block the progress of integration. Besides, the European Council has the right to propose candidates for the presidency of the European Commission, while the European Parliament has the right to elect a proposed candidate, however, by taking into account the outcome of the European elections.
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The European Council is the oligarchic center of power of an integration targeted at a neoliberal and centralist federal state. The Council enforces its totalitarian claim by empowering its members – who, in their home countries, serve as national executive power –, to act at the European level both as executive and legislative power for the purpose of imposing binding targets upon the the two institutions supposedly intended to act sovereignly: the European Commission as EU executive, and the European Parliament as EU legislature. Through the concentration of power (and in the absence of a separation of powers) wrong incentives and opportunities arise for the Council members to launch projects via the Council that would have no chance to be enforced at the national level. They keep succeeding in doing so, because the national parliaments keep caving in under the alleged pressure of a European consensus and because the peoples of Europe are not asked anyway. To counter a widespread misconception: A »separation of powers« among the EU institutions is indeed laid down in the EU treaties as a perspective – mainly to keep up the appearance of democracy and rule of law – and is also repeatedly and publicly requested. But a separation of powers could not legitimize the pursued bureaucratic and centralist European integration, neither democratically nor juridically. At best, the decision-making processes would slow down a bit. |
The first summit of the Heads of State or Government already took place in 1969 at the time of the European Communities (EC). Thereafter, the European Council succeeded in enforcing the following decisions that give evidence of its self-empowerment: In 1976 the decision for the direct election of the European Parliament, in 1985 for the completion of the Common Market, and in 1991, with the Maastricht Treaty, for the establishment of the European Union and the European Monetary Union. The only democratic participation was exercised by the citizens of France and the Netherlands, when they rejected the already signed EU Constitutional Treaty in national referenda in 2005. The European Council then used a cunning ploy and successfully enforced the Treaty in 2007 by inserting convoluted legal language and renaming it to Treaty of Lisbon. As of 2010, several summits were held on the euro crisis.
The activities of the European Council are far removed from the European people, because the Heads of State or Government consider themselves to fulfil a historical role in which they mutually reinforce one another by virtue of their domestic executive authority. That’s why they feel the need to take matters into their own hands and deny to give the people credit for the required »breadth of vision«. A risky attitude, since the Council tends to develop a »positivist« momentum that castigates any admission of a wrong decision as defeatist and backward-looking and pays homage to an uncritical »forward strategy«.
The Monetary Union as such and the management of the euro crisis contravene, in the name of selfish interests, against economic logic and are exemplary of the ignorance against economic expertise and the undemocratic attitude of the Council members. Repeatedly they have declared their decisions on the euro crisis as collapse-averting emergency measures that were without alternative and could not be deferred, notably in order to exert pressure on their national parliamentarians and motivate them to keep quiet or nod in agreement.
Rather than to acknowledge that vulnerable countries can not produce their own wealth anymore under the price pressure in euro, and that they should, supported by the EU, reintroduce their own currencies, the European Council has established a gigantic redistribution machinery including rescue packages, unlimited import credits, Target-2 credits between national central banks, purchase of government bonds by the European Central Bank, a European Banking Union, a European Fiscal Pact, and a designated European economic government – all the redistribution to be financed, unsolicitedly and permanently, by the citizens of Europe. This is a political attitude that prompted Roger Koeppel to comment that the EU is »a profoundly anti-democratic entity with an unsympathetic contempt for its citizens …«
6.2 The Council of the European Union (Council of Ministers of Member States)
The Council of the European Union is the extended legislative arm of the European Council of Heads of State or Government. It meets, depending on the policy area, in ten different formations composed of national ministers or other representatives at ministerial level delegated by the Member States. Formations are being implemented for General Affairs, Foreign Affairs, Economic and Financial Affairs, Justice and Home Affairs, and so on. They normally meet every three months, in urgent cases possibly every month. If they fail to agree, they have to hand over (or hand back resp.) the issues in dispute to the European Council for decision. By the way, to avoid confusion, the Council of the European Union is often referred to as the Council of Ministers.
The voting procedure in the Council of Ministers is regulated such that blockades are avoided so far as possible, however, at the cost of intergovernmental justice. The injustice is due to the ordinary legislative procedure being applied, the so-called double majority, that has been agreed upon in the Lisbon Treaty and that stipulates that a law is passed with the majority of at least 55% of the Member States and a majority of at least 65% of the EU population. Thereby even large countries such as Germany can be overruled and are, as sovereign states, exposed to a permanent threat of foreign rule. After all, unanimity is only applied for very sensitive issues such as security policy.
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The Council of Ministers shares the totalitarian claim to power of the European Council: Although its players act as executive power in their home countries, they are authorized to exercise legislative power at the European level and, in that capacity, frequently submit draft legislation to the alleged second EU legislative power, the EU Parliament. For the EU parliamentarians it is difficult to amend or reject these proposals because they are backed by the European Council of Heads of State or Government. The members of the Council of Ministers also abuse their European privileges, just like the heads of state or government do, to take every opportunity to impose projects upon their national parliaments that would have no chance without the alleged pressure of European consensuses. |
6.3 The European Parliament (EP)
The European Parliament is the outstanding curiosity among the EU institutions: Composed of national representatives being directly elected by national voters, it can not claim democratic legitimacy for the European Union. It is rather intended to serve the EU oligarchy as a »fig leaf« for the camouflage of its totalitarian claim, while the Council of Ministers – as an extended arm of the European Council – is responsible for the actual legislative fine-tuning of the EU. The existence of the EP is a result of the neoliberal-oligarchic indoctrination that successfully spreads the belief, the (sovereign) nation-states and their parliaments had to be complemented with a supranational parliament – or directly expressed: to thrust the EP under the noses of the natonal parliaments – in order to create a democratic Europe. This is absurd, because sovereignty rights are indivisible – how could it be otherwise. The absurdity indeed applies to all EU institutions, but in the form of the EP it is intended to act as a tranquillising pill for the public.
Even the German Constitutional Court sees the EP merely as a »representative body« of the peoples of the EU Member States that does not possess sovereignty. In the press release of 30 June 2009 the Court states:
»The European Parliament is not a representative body of a sovereign peoples of Europe, but rather a supranational representative body of the peoples of the Member States, so that the principle of electoral equality common to all European countries does not apply to the European Parliament. The German Basic Law (constitution) does not empower the German authorities to confer sovereign powers such that their sheer pursuance allows to autonomously justify additional competences. It prohibits the transfer of the competence-competence.«
Then the Constitutional Court spreads slightly convoluted plain text, because its judges are obviously aware that the EU is moving towards a uniform federal state due to the increasing decision-making power of its institutions, although the necessary prerequisite, namely a European sovereign peoples, is not conceivable in the short or medium run given the inhomogeneity of the continent. Here is the corresponding text from the press release:
»By expanding the powers of the European Parliament, the gap between the level of decision-making power of the Union’s institutions and the democratic potency of the citizens in the Member States can be reduced, but not closed. The European Parliament is not sufficiently prepared, neither in its composition nor within the European structure of competences, to take representative and attributable majority decisions as coherent strategical decisions. When measured against national requirements on democracy it is not bound to electoral equality and not authorized to take relevant decisions regarding the supranational balancing of interests among the nation-states. Therefore, it can not support a parliamentary government and organize itself politically in a government-opposition manner such that a strategic decision of European electors could induce a decisive political impact. Given this structural democratic deficit, that can not be resolved within a compound of states, further steps towards integration beyond the current status shall neither undermine the policy-making ability of the nation-states nor the principle of conferral.«
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Conclusion: The Constitutional Court notes that the EU is a compound of states (Staatenverbund). With this newly created label the Court avoids the term confederation of states (Staatenbund) that would imply national autonomy, meaning that the integration towards a uniform federal state was already well advanced with the EU being constituted as a unique new entity, virtually a hybrid under international law. Thus the Court contradicts itself and subverts the binding nature of the German Basic Law. At the same time, the court sets decisive terms: Additional steps towards a federal integration shall not be persued, because they would confer too much power upon the EU institutions with the subsequent danger of self-empowerment. And further: There is no justification for the EP in the »compound of states«, because principally no supranational institution shall intervene with the supranational balancing of interests among the sovereign states, since the balancing should be determined solely by the national parliaments and their governments. This means in particular, that (1) within the balancing of interests among the nation-states every unanimity achieved under pressure undermines the sovereignty and the will of the peoples of individual states, that (2) the integration must of course proceed with differing national speeds, and that (3) the sustainability of the process is best granted if the individual steps are reinforced by national referenda. Despite all the contradictions in the Constitutional Court’s press statement that means: The mere existence of supranational institutions poses a disturbance and distortion to the multilateral balancing of interests among the EU countries – a fact that is impressively confirmed in practice. In the light of this conclusion it obviously makes no sense to consider an upgrading of the EP, for example by increasing its power of legislative initiative, since a top-down democratization is an illusion anyhow, all the more so when trying to integrate extremely inhomogeneous nation-states by means of top-down directives. Therefore, I will not go into any more detail relating to the current competences of the EP and the increase of its influence in the oligarchic concert. |
It should be added that the EP has so far not succeeded, and will never succeed, to make the EU citizens understand its existence, which is why the turnout in European elections continues to fall every five years. In theory, the EU citizens could make the EP inoperative by jointly ignoring the European elections. With a turnout of zero not a single candidate would be elected and the plenary would be deserted. But that will probably remain a pipe dream.
In February 2014, the German Constitutional Court overturns the three-percent threshold for German parties campaigning in the European elections, because, according to its justification, solid majorities were not required since the EP was not commissioned to elect an effective government. In plain text that means: The EP is not a parliament in the strict sense. The question however why the EU should maintain such a costly and useless »representative body« of the peoples of its Member States remains unanswered.
With the Lisbon Treaty the European Citizens’ Initiative (ECI) has been introduced: The ECI is meant to supplement the EP as the citizens of the EU can prompt the European Commission (the EU executive) to deal with a topic within its field of competence. However, the rights of the ECI have been curtailed from the outset as its initiatives are not binding for the Commission.
For each EBI a total at least one million signatures encompassing at least one quarter of the EU countries must be collected within twelve months. Apart from its absolute non-binding nature, the ECI denies citizens to demand reforms of the EU treaties. So it is obvious that the ECI is the second »fig leaf« next to the EP to disguise the totalitarian claim of the EU oligarchy.
Furthermore, the above-cited judgment of the Constitutional Court on the EP analogously applies for the ECI: Supranational citizens’ initiatives would, if binding one day, interfere with the supranational balancing of interests among the EU states, a task that must be determined solely by the sovereign national parliaments and their governments and, so far as provided, by national referenda.
The consequences of interfering with the supranational balancing of interests can be illustrated by an example: Given a continued integration towards a uniform federal state, a majority in the EP or in a European referendum could enforce unlimited and unconditional rescue measures for countries affected by the euro crisis, thus overriding the budgetary sovereignty of donor countries, but at the same time cementing the dependence and incapacitation of the crisis countries without touching the causes of the crisis.
6.4 The European Commission (EU Commission)
The EU Commission is referred to as the executive power of the EU because it partially fulfills functions like a national government. The member countries expect from the Commission an independent, supranational commitment »for the benefit of the community«. The President of the Commission, who is regarded as the »political leader« of the EU, is elected by the EP on a proposal from the European Council, taking into account the election results for the EP. Thereafter, the President, together with the Heads of State and Government, can elect his Commissioners (Ministers).
The Commission has the sole right to initiate European legislative proposals to fill out the framework set by the European Treaties. The proposals can only become law by resolution of the EU Council of Ministers, increasingly with the involvement of the EP. Member States that see their national interests violated by legal acts can turn directly to the EU Council of Ministers. In addition to the right of initiative, the Commission has the responsibility of implementing legal acts in the event of infringements and, if necessary, of bringing proceedings against Member States or companies before the European Court of Justice. The Commission also prepares the EU draft budget, monitors the rules of the EU common market, and represents the EU in the negotiation rounds of the World Trade Organization (WTO).
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Although the European Council of Heads of State and Government is still the EU’s oligarchic power center, the European Commission has established itself, based on the European Treaties, as a kind of additional government to the national governments. Its draft laws emerge from Brussels backrooms. The EP, which is not involved in this process, can subsequently only vote yes or no. EU citizens experience it again and again that proposals made by the Commission result in stunned disapproval, especially when they affect original national competencies, even worse when they interfere with the political subgroupings of the nation-states. The behavior of the Commission proves that supranational institutions of a federal superstate like the EU, once let off the leash, can no longer be restrained in their self-empowerment. In fact, since the Treaties of Maastricht, the EU is actually subject to the principle of subsidiarity, and it would therefore be the Commission’s duty to propose only legal acts which are appropriate for the supranational level and advantageous overall. But the EU bureaucracy, supported by a civil service that is subverted by industrial interests, prevents this. Conclusion: The construction of the EU as a federal superstate can not be reformed, it can only be replaced by a confederative cooperation between autonomous nation-states. |
Concluding remark: As the European project slips away from its protagonists, tensions between the Commission and national governments are increasing. Also because the national representatives in the European Council and the Council of Ministers have been carried away by their supposed historical mission and now stubbornly maintain their oligarchic course nourished by group-dynamics and their »now-more-than-ever« attitude. Their behavior becomes comprehensible when bringing to mind the »success factors« of the neoliberal project: The political centralism and dirigism is the basis and the starting point for the undisturbed economic policy deregulation, which in turn guarantees the »free« EU common market. This market construct enjoys the status of a sacred cow, finds its perfection in the Eurozone and is complemented by the global »free trade« based on dollar prices. For the global complementation to function seamlessly, the EU Commission and the World Trade Organization are pulling together in the same direction.
6.5 The European Court of Justice (ECJ)
The ECJ considers itself to be an authority superior to the national courts. It sees its task in consistently »observing the law in the interpretation and application« of the European Treaties for all EU Member States through definitive judgments. EU Institutions and Member States, as well as individuals, businesses and organizations may bring charges before the court. National courts may submit current legal issues to the ECJ for examination and authoritative interpretation of the EU law. Each Member State sends one judge to the ECJ. The court decides in about 500 legal cases annually; the decisions are taken by majority vote. The judges are only allowed to take part in decisions which do not affect their own country of origin. This rule points, at the same time, to the fundamental dilemma of the ECJ: Its judges intervene with 28 different national jurisdictions which they are not familiar with in detail.
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The ECJ, founded in 1952, allowed itself its most far-reaching self-empowerment as early as 1963 and 1964 by declaring EU legislation as a sui generis legal system superior to national legislation; with the subjects of this system not to be restricted to the nation-states but extended to their citizens and enterprises. Since then, the ECJ defines itself as the driving force behind the integration towards a federal superstate by means of legal unification. By doing so, the ECJ curtails the freedom of the nation-states to determine for themselves the steps and the speed of their integration, and: the ECJ devalues the nation-states’ democratic constitutions. Its self-empowerment has transformed the ECJ into an extremely powerful institution of the EU, only comparable to the European Council of Heads of State and Government. But one thing is true for the ECJ that is also true for all other EU institutions: It is part of an oligarchy that is digging the grave of democracy in Europe and thwarting an integration that would be beneficial for its citizens! |
I recall that, contrary to the German Federal Constitutional Court, the ECJ cannot act as an authority on behalf of any nation-state, constitution or popular sovereignty. It was originally founded on the matter of international dispute settlement, and, for the benefit of Europe, should have better focussed on that task. The legal system, on the basis of which the ECJ today acts like a European Constitutional Court, is a product of its arrogance and power fantasies.
Unfortunately, even the German Federal Constitutional Court has now, for the first time, directly confirmed the ECJ’s legal perception in presenting a legal issue before the ECJ in March 2014: Whether the European Central Bank (ECB) would be exceeding its powers by its decision to buy an unlimited amount of government bonds from crisis-ridden euro countries if necessary – keeping in mind that the ECB is contractually not authorized to intervene in economic policy (the result of the assessment is still pending).
If the German Federal Constitutional Court were to approach further towards the ECJ’s anti-contractual legal system, the misuse of law as a vehicle of neoliberal industrial integration could no longer be halted.
Undoubtedly, policies of a constitutional state have to be subjected to the state’s legal system, in contrast, the present application of this principle to the European level and the ECJ’s unauthorized legal system turns priorities upside down. Because for a European legal system, as well as for the premature common currency (euro,) the following applies: A uniform jurisdiction, as well as a common currency, can only be the result of a successful formation of a supranational (European) state, not its prerequisite. The development of national legal systems must therefore be reserved for national parliaments and governments for the time being, just as the associated jurisdiction must remain with the national courts. In a European confederation of autonomous nation-states, which I see as the only realistic alternative, common goals are agreed upon as temporary normative guidelines, subject to democratic choice and without the need for unanimity. Supranational institutions pursuing a sui-generis doctrine are inconceivable in a confederation.
In short, a future-oriented integration can only succeed by accepting the complex constitutional status quo in Europe as the basis and starting point. A complete harmonization of national legal systems, if at all necessary or desirable, must follow political integration as a subordinate, lengthy process.
6.6 The European Central Bank (ECB)
The ECB is like a spider in the web of the so-called Eurosystem. The highest governing body, the ECB’s Governing Council, is composed of the 6 ECB directors and the governors of the currently 18 euro zone national central banks. The contractually agreed task of the system is to ensure price stability in the euro zone and to subordinately support economic policy. Price stability is defined as a year-on-year increase in the Consumer Price Index (CPI) of below but close to 2% over the medium term. The monetary policy decisions are taken by the Governing Council by simple majority and without national weighting. Thus, when excluding the 6 ECB directors, large countries have the same weight as small countries. The national central banks are responsible for the implementation of the ECB’s monetary policy in the euro zone countries. The Eurosystem is institutionally and methodically independent and not bound by political directives. In order to strictly separate monetary and fiscal policies and to avoid dependencies, the ECB is contractually prohibited from granting loans to public budgets.
As already mentioned, the euro and the Eurosystem were introduced by disregarding economic expertise and, as was bound to happen, without asking the citizens concerned. The political stakeholders acted in concert with a view to make the federalist integration irreversible by means of the common currency, although they were warned by economists that the less productive countries would be squeezed out of their markets by more productive countries in a direct euro price competition and without the protection of calculated exchange rates, tariffs, trade quotas and control of capital movements. Squeezing out results in a decline of domestic production and value added, increasing import dependency, balance of payments deficit, private and public over-indebtedness, and finally insolvency followed by economic collapse. The experience so far with the Eurozone has impressively confirmed this inevitable economic mechanism and has done a bad turn to the integration of Europe.
A return to national currencies would be the only sensible way out of the crisis and would be practicable if joint efforts were made, but it is blocked by the dependencies that have arisen, the imaginary fear that things could get much worse and, last but not least, by the fear of the oligarchy of losing face. Above all, German industry is afraid of a slump in its exports to the Eurozone (which is already the case as a result of the crisis), while the Greeks are turning their frustration outwards towards the the EU’s austerity and claiming to be entitled to monetary »rescue« without cost-cutting measures by ignoring the causes, including their own sloppiness. All in all, this is a mixed situation that gives the EU oligarchy free rein.
Since it is unthinkable for the oligarchy to go back, it is stirring up growing fears to justify the high price of the »euro rescue« and is deliberately confusing cause and effect by reinterpreting the euro crisis as a sovereign debt crisis. It helps the oligarchy to argue that, in addition to price competition in euros, speculation by banks and the financial market crisis have also contributed to national debt. »Euro rescue« therefore means: Financing of overindebted national budgets plus capitalization of distressed banks.
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This is where the ECB’s great moment has come. In addition to the tax-financed rescue packages, the ECB steps into the »euro rescue« by means of money creation. First of all, its aim is to regain confidence in the sovereign bonds of the crisis countries in order to involve the global financial markets in the rescue. To this end, the repayment of the bonds must be guaranteed, also to lower their interest rates to the advantage of the countries in crisis. So the ECB (in its function as lender and guarantor of last resort) announces that it will buy up unlimited numbers of government bonds whenever necessary. It then actually buys, but not directly from the countries in crisis (because the ECB is banned from state funding), but on the secondary market from banks with the intention of faking contract compliance. The financial markets react as intended, but the action arouses lasting desires on all sides and misses the cause of the euro crisis: When the real test comes, the donor countries of the eurozone will be liable for the scrap papers accumulated by the ECB. The citizens of these countries are charged several times over by the tax-financed rescue packages, the low interest rate and the possible losses from scrap papers. And strategically, things can only go wrong, since the redistribution of financial resources, in which the ECB is now involved, not only damages the donor countries, but also puts the recipient countries in a paralyzing dependency, which permanently prevents them from actively producing their own prosperity. The Eurosystem poses a further risk for the donor countries, in particular for Germany: The national central banks also grant credit to each other within the Eurosystem, whereby the Deutsche Bundesbank has accumulated receivables (Target-2 balances) from the other central banks of around 500 billion since the financial market crisis began in 2008. Germany’s total risk from rescue packages, guarantees for government bonds and Target-2 balances amounts to around three quarters of a trillion euros. The ECB’s history is miserable: Founded without a democratic mandate, it pursues monetary policy for 18 incompatible countries, becomes one of the protagonists of the continent’s greatest crisis, and finally claims to be the »saviour« in breach of its mandate by exerting fiscal policy: Firstly, it supports the speculatively engaged global financiers by announcing that, if necessary, it will take over the default risk for their government bond portfolios and, secondly, it encourages the countries in crisis to further act recklessly and inefficiently by indirectly giving them low-price loans through guarantees which do not correspond to their risk profiles. In short, the ECB is making a decisive contribution to transforming the euro crisis into a permanent crisis! |
7. Conclusion
The German Constitutional Court is indeed showing the way to a sustainable European integration, but unfortunately without placing stricter obligations on the Federal Government and the Federal Parliament of Germany: The Court confirms, as stated above, that only a single option is open for a sustainable integration of the traditionally very different European nation-states, namely a confederation of autonomous nation-states. And the Court explicitly names the only possible way forward, namely the supranational balancing of interests among the states. Thus the course for a practical application is clear: Representatives of the nation-states should meet regularly at the supranational level on all subjects relevant for integration to find solutions that meet the interests of as many states as possible and eventually lead to a convergence of national standards at the highest possible level. The different pace of national developments, as a result of different traditions and resources, naturally leads to different individual speeds of integration. It is crucial for the success of a European confederation that (1) the member-states retain their sovereignty, or relinquish sovereign rights only temporarily and on revocation, that (2) the confederation gets along with a minimum of supranational institutions, and that (3) these institutions are prevented from conducting any self-empowerment.
With respect to the failed euro zone it should be noted that a European monetary union can only be and should have only been considered after a successful completion of the extremely slow process of convergence of economic productivities. That is, such a convergence can not serve as a realistic medium-term objective, quite contrary, it is clouding the view for a European integration aimed at general welfare (see also the article Sustainable Social Welfare).
To be more precise: A monetary union can only induce general wealth and welfare when (1) the economies of the participating countries share an almost identical level of productivity, when (2) the participating countries impose a reciprocal obligation to implement subsidiary economic structures in order to avoid centralist concentration of productions and production capital, and thus avoid unemployment and unequal distribution, and when they (3) sign bilateral trade agreements with non-European countries including price-neutralizing exchange rates and autonomy to apply trade quotas and tariffs in order to balance intra- and extra-European trade.
As a compliment see the articles Economic Subsidiarity, Excesses of Capitalism and Principles of Democracy.
8. Switzerland: Between Plebiscite and Neoliberalism
The reservations regarding direct democracy are well known. It is said that the majority of the people are not sufficiently informed and are overstrained to make future-oriented decisions because of the complexity of political and economic contexts. The complexity however, which is generally addressed, is a consequence of the deregulation of economic processes since the 1980s; it entails chaotic system behaviour, which even experts can no longer comprehend – but it can inspire economists to perform useless mathematical gymmicks and gain recognition through Nobel prizes (for more details see the article Paul Krugman’s Blind Spots.
In referenda, however, even under chaotic neoliberal conditions, no scientific essay is required from voters, but to decide whether or not they are prepared to accept the simple consequences of otherwise opaque occurrences. If, for example, open borders lead to wage dumping and rent increases, the citizens simply have to decide whether they are for or against uncontrolled immigration.
As I have already pointed out above, the sovereign people is characterized by its ability to learn, which, although never straightforward, nevertheless heads towards the welfare aim. Interest groups, on the other hand, tend to present their aspirations as being without alternative in order to cement them in the long term, and they only react to extreme external pressure, which in the direct democracy is built up again and again in an ideal way by the sovereign people. This regulative is missing in the purely representative democracy, where the elected representatives are constantly tempted to join interest groups which, in the worst case, turn into oligarchies that constantly disregard the common good. The sovereign people, meandering for its well-being, therefore promises a better future than the oligarchy, which moves ahead in a straight line and negates the social and ecological devastation caused by its self-interest.
The conflict that the individual voter has to face in a direct democracy is greater than in a purely representative democracy. Political maturity has its price. If, during a vote, the advantages or disadvantages for society in the perception of a voting citizen do not coincide with the personal ones, the voter must weigh the common good against the personal well-being. In Switzerland, this conflict is particularly evident because the country operates a globalized financial and real economy that contributes extraordinarily with its jobs, investments and tax payments to a very high standard of living. The example of the initiative against »mass immigration«, which had to be answered yes or no on 9 February 2014, demonstrates the area of tension in which Swiss voters unsually have to make their decisions.
The background: Switzerland and the EU have concluded bilateral agreements in which the free cross-border movement of goods, services, capital and persons has been agreed as a package deal from which allegedly no components can be removed (why?). At the same time, however, renegotiations are also planned. Switzerland should not have got involved in junktimized treaties in the first place; the fact that it has done so testifies to its internal conflict between neoliberal capital interests, which are inclined towards the EU, and the sustainable common good, which can be demanded at any time through plebiscites.
Due to the free movement of persons agreed with the EU and beyond, Switzerland had a net immigration of 84,000 persons in 2013, three times as many as Germany in percentage terms, and a total share of foreigners of 23.3 percent, also three times as high as Germany’s. In the vote on 9 February 2014, a narrow majority of the Swiss affirmed the limitation of »mass immigration«.
The publisher and editor-in-chief of the Swiss magazine Die Weltwoche, Roger Köppel, writes in an editorial of 5 February 2014, i.e. before the vote, on the motives of entrepreneurs and trade union officials against the initiative:
»… business representatives are in favour of the free movement of persons because it guarantees them free access to a large number of inexpensive workers. The trade unions are in favour of the free movement of persons, because massive and uncontrolled immigration gives rise to calls for protective measures. …
Of course, it’s about wage dumping. Why else should a prosperous economy open its borders to foreign workers if there is no prospect of a cheaper labor force behind it? …
… trade union leaders benefit from the swelling sense of insecurity among workers in Switzerland when they look at the legions of European job seekers who are allowed to enter the country because of short-sighted policies. …
… free movement of persons means wage pressure and more competition, impending loss of jobs, overloading of already strained social services, rising rents, higher prices, less prosperity. …«
After the vote, Roger Köppel responds in an editorial of 12 February 2014 to the aggressive-totalitarian comments from the EU:
»… not control, but non-control of immigration caused by free movement is the worldwide exception. …
The voters want to take the reins into their own hands again. … Most people in Europe think so, but are not asked. … In essence it’s about sovereignty and democracy. … The ties with the EU went too far. Now the screw is being turned back a little. Cooperation yes, merger no.
… what the Swiss rarely dared to say: the EU is a deeply anti-democratic entity with an unsympathetic disdain for its citizens. …
Switzerland puts majority before truth. That is democracy. Switzerland wants to remain Switzerland. It wants to trade, be open, cultivate exchange, but it does not want to join the EU …
… The free movement of persons suffers from the same weaknesses as the euro. Single currencies are the result of successful state foundations, not their prerequisite. …«
It can be added that the EU has been trying for years to decide discrepancies in the interpretation of bilateral treaties absolutely binding by judgments in its court of last instance: the European Court of Justice (ECJ), i.e. in this case to subject Switzerland to the jurisdiction of this foreign, democratically not legitimized court. So far, Switzerland has been able to avert these attempts by the EU with reference to its sovereignty. If, after the successful initiative mentioned, Switzerland would now want to unravel the package deal to renegotiate the free movement of persons, the EU would presumably mobilize all its oligarchic arrogance to prevent this. To remain true to itself, Switzerland should make it clear from the outset that it is prepared to accept economic disadvantages in order to protect its sovereignty. The message that emanates from this attitude would not fail to have an effect on the European public and would eventually put pressure on the EU bureaucrats.
To strengthen the sovereignty of the European people and to promote European democracies, it is to be hoped that Switzerland will continue to stand firm against the EU bureaucracy henceforth and that it will remain a role model for sovereignty and direct democracy.
Note on the COVID-19 Pandemic
The pandemic has noticeably revealed the significant weaknesses of the neoliberal economic system for everyone, above all the shortage of medical, but also other products, caused by disruptions in the absurdly networked value and supply chains across the globe.
The analyses of the neoliberal system as well as the principles and practical procedures based on them for building a sustainable system, which are presented in this compendium, thereby obtain an unexpected topicality. Now is the time to seize the opportunity and build up economic policy pressure to enforce the development of an economic order that is sustainably oriented towards social and ecological welfare.
The following article refers to the targeted arguments contained in the Compendium: COVID-19 and Globalization
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Click here for the German-language version: Demokratie und europäische Integration
References
https://www.bundesverfassungsgericht.de/pressemitteilungen/bvg09-072.html German Constitutional Court: Press release on the Lisbon Treaty dated 30 June 2009
http://www.weltwoche.ch/index.php Swiss weekly Die Weltwoche, publisher and editor-in-chief: Roger Koeppel
Bibliography
Enzensberger, Hans Magnus: Sanftes Monster Brüssel oder die Entmündigung Europas. Suhrkamp, 2011, ISBN 978-3-51806-172-5
Schachtschneider, Karl Albrecht: Die Souveränität Deutschlands / Souverän ist, wer frei ist. Kopp, Oktober 2012, ISBN 978-3-86445-043-3
Gerd Zeitler: Promoting Sustainable Economics 