Democratizing the Economic and Monetary Union
With the Eurozone emerging from years of economic crisis, the reform of the currency union is now in the limelight. After the “election year” in Europe, the reform momentum has increased with the election of a reform-minded centrist president in France whose ambitious reform proposals include a Eurozone budget and a Brussels-based finance minister. Even more importantly, Emmanuel Macron found a strong supporter for his vision for Eurozone reform in re-elected German chancellor Angela Merkel, who also declared overhauling Eurozone reform a key priority of her new government. There is a clear consensus among the Franco-German couple that the way forward is by means of further strengthening European economic integration.
When it comes to Eurozone reform, the basic choice is between retreat and further integration. The monetary, banking, and sovereign debt crises that span over the past years have created favorable conditions for political extremism fueling Euroskeptic arguments for a full withdrawal from the single currency project and for a return to the nation-state as the key political entity that is democratically accountable to its citizens. This argument has been famously brought forward by Wolfgang Streeck from the Max Planck Institute in Cologne, who paints a grim picture of the Eurozone’s future: “…the most likely prospect for politics and society in a currency union without flexibility is a long-term international conflict over, on the one hand, how much sovereignty to wrung from the southern countries and, on the other hand, how much financial compensation to be provided by the northern countries.”
What both euro-optimists and skeptics share is the analysis that the single market project lacks democratic accountability. In times of increased fiscal transfers among Eurozone countries and bailout deals linked to domestic welfare policy reforms, the debate about the EU’s democratic deficit is more pertinent than ever. If Europeans are to further “their experiment with new forms of governance outside the nation state,” the European and Monetary Union (EMU) needs to be democratized by being more accountable. In other words, “Europe needs to create stronger institutions under the democratic control of the European public to fulfill the full potential of the EU as a post-national form or politics.”
What we see now is that European economic decision-making is not transparent and that it is difficult for European citizens to understand where decisions are effectively taken and who is ultimately to be held responsible. The Eurogroup in particular is an informal body with no formal decision-making authority and no accountability to the European Parliament. This could be remedied by the installment of a European finance minister, a member of the European Commission, who presides over the Eurogroup and is directly accountable to the European Parliament. As the only directly elected European institution, the European Parliament should be fully involved in the decision-making process in the co-decision procedure. Reforms like these would be the right step toward a more participatory and inclusive European democracy.