Germany’s budgetary muscle will eventually bring Poland and Spain, the chief foot-draggers over the constitution, to heel. Fear of jeopardizing the EU’s past achievements may cause the pioneers to tread carefully, at any rate for now. A compromise based upon the constitutional treaty will likely be reached during the Dutch presidency of the EU in the second half of 2004. But the events of recent months are a warning for analysts who have assumed that the EU is a superpower in posse if not in esse.

After the intergovernmental conference (IGC), the constitutional treaty’s principal author, the aloof former president of France Valéry Giscard D’Estaing, argued that “nobody would understand” if the Europeans spent the next 20 years squabbling among themselves while China superseded them as a rival to the United States in world politics.² The stakes are unquestionably high. But the EU looks as if it is not yet ready to take its place at the top table.

The Road to Rome

The EU unquestionably did make bold choices after Maastricht. The successful launch of the euro and enlargement to the new democracies of Eastern Europe have particularly opened the EU’s horizons. As the Johns Hopkins political scientist David Calleo has suggested, the adoption of the euro has given the EU the luxury of being, like the United States, “liberal internally but relatively autarkic externally.”³ This has strengthened the EU’s autonomy from the United States and heightened the EU’s self-perception that it is an emerging geopolitical heavyweight. While the single currency was presented to the euro zone’s citizens chiefly as a way of making daily economic life more efficient, its conscious objective was to insulate the euro zone from zig-zag movements in the dollar.

This goal has seemingly been achieved. Since the euro was launched in 1999, its value against the dollar has yo-yoed between an initial peak of $1.19 to a low of 83 cents in October 2000 and a recent high of $1.28 in January 2004, but these fluctuations in the greenback, because they can no longer roil the European currency markets, have not disrupted the internal economy and political harmony of the euro zone in the way similar swings in the dollar’s value wrought havoc in the 1970s and early 1990s.

This important development has coincided with the elimination of the external threat presented to Europe by the Soviet Union and the substitution of Brussels for Moscow as the point of reference for the countries east of the Elbe. Enlargement of the EU to include Poland, the Czech Republic, Hungary, Slovakia, Slovenia, Malta, Cyprus, and the three Baltic states makes it the biggest economic producer in the world, and projects its borders into the Balkans, the Middle East, and Eurasia (a development that all but compels it to have a collective foreign policy).

Enlargement has brought problems in its wake, however. This enlargement is the first in the European Union’s history that obliges the existing tenants of the EU house to reform cherished programs in order to accommodate the new arrivals.⁴ French farmers will get less from the EU trough; Spain’s rural regions will no longer be the most needful of EU infrastructure spending. Tough future decisions over who gets what, and over how large the EU budget should be, will be needed.

It is precisely here that the EU has been less bold. Its institutions,* as refined at Maastricht and Amsterdam (1997), do not facilitate tough decision making, but are essentially consensual in character. Executive power within the EU is shared between the European Council, regular meetings of the member states’ leaders whose agenda is set by a presidency that rotates between the member states every semester, and the European Commission, the permanent administration whose president is chosen by the European Council and which has the exclusive power to propose new legislation. The EU’s legislative branch is divided between the specialist ministerial committees that compose the Council of Ministers and the directly elected European Parliament. Voting in the Council is still by unanimity on some key issues, and even when it is not, a proposal must obtain a high “qualified majority” of the member states’ votes (which are weighted, with “small” countries getting a disproportionate number of votes relative to population) in order to pass. In fact, the Council usually tries to find consensus and votes relatively rarely. The European Parliament has wide powers of “co-decision” (veto), but remains the weaker chamber in the EU’s legislature.

For a variety of reasons, enlargement threatened this consensual institutional model. The “big countries” didn’t want to have to wait 13 years before they assumed the presidency of the EU (and the job of running a presidency has become too big a task for small countries); the Commission, which at 20 members is already too big, promised to swell inordinately in size as each new state demanded its own euro-minister; the likelihood of consensus being reached in a 25-state EU was much lower. An efficient form of voting in the Council of Ministers was therefore an imperative. *For a guide to the EU’s institutions, please turn to the end of this article.

In May 2000, German foreign minister Joschka Fischer, impatient for reform, and afraid that the EU was becoming a byword for wasteful bureaucracy and inertia, proposed that Europe should advance toward federal institutions. Fischer advocated a senate of national parliamentarians to replace the Council of Ministers, and hypothesized the direct election of the president of the Commission. He warned that Germany would form a coalition of the willing and press ahead with political integration if the EU failed to reform.⁵

Fischer’s speech stimulated a burst of speeches on the EU’s “finalité ” by Europe’s great and good. This constitutional debate intensified after the December 2000 EU summit in Nice, when national leaders wrangled for four days over the minutiae of the institutional arrangements of an enlarged EU.

The subsequent Treaty of Nice (February 2001) expanded the European Parliament to a bloated 732 members, beginning in 2004, and instituted, from January 2005, a new “triple majority” voting system in the Council of Ministers whereby a “qualified majority” would require approximately 71 percent of the weighted votes drawn from a numerical majority of member states representing not less than 62 percent of the population. Spain and Poland were awarded 27 votes in the Council of Ministers, only two fewer than much more populous Germany, France, Britain, and Italy.

In addition, the EU decided to expand the Commission to 25 members in 2005, and to give the member states one commissioner each. A system of rotation was to be introduced once the European Union reached 27 states. The powers of the president of the Commission were slightly increased, but he (or she, we are still waiting) would continue to be chosen by the European Council, albeit no longer by unanimity.

The treaty made the rules governing “enhanced cooperation” (initiatives toward greater integration by clubs of member states) easier and also approved a Charter of Fundamental Rights, drawn up a by a team of legal scholars. The charter was not, however, included in the treaty.

Finally, the treaty adopted a declaration calling for a “deeper and wider debate” on the demarcation of responsibilities between the EU and the member states, the status of the Charter of Fundamental Rights, the simplification of the treaties, and the role of national parliaments within the EU.

At Laeken, in Belgium, in December 2001, the European Council decided that Europe was “at a crossroads” and launched a “convention” with the specific task of simplifying and reorganizing its institutions so that the EU would be brought nearer to its citizens, especially the young. This convention was duly chaired by Valéry Giscard D’Estaing; he was flanked by two pillars of the European establishment, Giuliano Amato of Italy and Jean-Luc Dehaene of Belgium. The 105-strong convention also included representatives of the member states, the national parliaments, the European Parliament, and the Commission. The candidate countries sent representatives, but they were specifically prohibited from preventing “any consensus which may emerge among the member states.” The convention’s proposals were to be submitted to an intergovernmental conference (IGC) of the member states for amendment and approval.

There is no point describing the convention’s work in detail, except to say that from the beginning Giscard interpreted his brief to mean that the convention should produce a document that would give the EU a solid constitutional foundation and not be just another treaty. Between March 2002 and July 2003, it wrestled with hundreds of schemes from enthusiasts for European integration from academia and civil society, as well as with weightier proposals from the Commission and the national governments.

A Constitution for Europe

On July 18, 2003, Giscard finally presented to the Rome European Council a weighty document that enjoyed wide consensus among the convention’s delegates and received a warm reception in the continental press. Giscard himself said that the final agreement was “far from being a lowest common denominator accord” and represented the “maximum” that could be obtained. He urged the Italian presidency to get the text through unchanged. “We have unblocked the EU,” said Spanish foreign minister Ana Palacio, who argued that the convention had done more than the three previous intergovernmental conferences of the 1990s to give the EU direction. Giuliano Amato added enthusiastically that the convention was “the means by which Europe has been reunified.”⁶

The reaction in Britain was less enthusiastic. The Economist’s reaction was to print, under the headline, Where to File Europe’s New Constitution, a front cover of a wastepaper basket filled with a crumpled copy of the convention’s proposal. The inside leader called the draft constitution a “lamentable piece of work” and a “blueprint for accelerated instability.”⁷

In its defense, the constitution does address the flaws in the EU’s current decision-making process exposed by enlargement (though whether it solves them is another matter). The problem of the EU’s rotating presidency is solved by splitting the job. The constitution creates a new institutional figure, the European Council chair, who will run the European Council for a renewable two-and-a-half-year term. It is clearly intended that this post will be filled by an experienced senior statesman; indeed, the option is left open that the job may eventually be devolved upon the president of the Commission. The other (even bigger) part of the job, chairing the Council of Ministers, will be solved by rotating the presidency of the Council of Ministers’ various committees for a period of at least a year.

The question of the size of the Commission has been heroically fudged. From November 1, 2009, the Commission will be composed of the president of the Commission, the new minister for foreign affairs, and 13 other commissioners selected by the European Council on the basis of “equal rotation.” The Commission will “reflect satisfactorily the demographic and geographic range” of the EU. However, to make doubly sure nobody feels left out, another 15 “nonvoting commissioners” are to be appointed by the president of the Commission using similar criteria.

The question of voting powers was, by contrast, solved relatively courageously, albeit again only from November 2009. The constitution proposes that a double majority procedure shall be adopted whereby a decision of the European Council or the Council of Ministers shall pass when a numerical majority of member states representing 60 percent of the EU’s population is in favor. This article of the constitution was the principal bone of contention during the IGC.

In addition to these key changes to the EU’s institutions, the constitution creates a minister of foreign affairs to “conduct the Union’s foreign and security policy,” although the constitution’s verbally tangled clauses on foreign policy suggest that the nature of the policy the foreign minister will conduct will be decided by the unanimous vote of the member states. The common foreign policy is supposed to lead to the “progressive framing” of a common defense policy, although this, too, will require unanimous voting, as will the EU’s budget, citizenship matters, and tax and trade agreements. On the really big issues, the EU of 25 member states will proceed by consensus.

The Charter of Fundamental Rights has been incorporated whole into the constitution; its sweeping list of political, social, and economic rights will now be binding upon all EU legislation (national law, in theory at least, will not be affected). The incorporation of the charter gives still more power to the European Court of Justice (ECJ), a body whose judicial activism has already played an important role in the EU’s history. The supremacy of European law over national law, which the ECJ has established in its case law since the early 1960s, is affirmed as a constitutional principle.

The federalist dream of a bicameral legislature is attained: when the constitution becomes law, the European Parliament will have joint power with the Council of Ministers to enact all legislation. As recently as 1991, the European Parliament had almost no legislative power at all. The EU is given exclusive authority over monetary policy (for countries in the euro zone), trade policy, customs questions, and fish conservation; it has “shared competence” with national governments in a dozen areas, notably in questions regarding the internal market. Except in the area of justice and home affairs, no major new competences have been added, however, and the list of areas in which the EU can legislate remains as interesting for what it leaves out (pensions, health care, most social policy, education, most tax issues) as for what it includes.

The constitution takes the “s” word— subsidiarity—seriously. All putative EU legislation will be sent to the national parliaments as well as to the Council of Ministers and the European Parliament. The parliaments will thus be able to scrutinize the EU’s work and decide whether the EU is trespassing on their turf. All EU legislation will have to specify why action at the European level has been deemed necessary. If one-third of the member states’ legislatures give a “reasoned opinion” against a specific piece of legislation, the Commission will have to rethink its intentions, though not necessarily alter them. Given the risk of an appeal to the ECJ, however, it is probable that the Commission would not press on with its legislation in such circumstances. It will be fascinating to see whether national parliaments will use this power of preventive veto to become a significant force in the EU’s legislative process. The best guess is that they will.

Last, but certainly not least, the constitution will be fiendishly difficult to amend. In effect, if substantive changes are proposed, the whole process inaugurated at Laeken—convention/intergovernmental conference/national ratification—will have to be repeated. The immensity of this condition is such that the reason for Britain’s unusually cooperative attitude during the convention becomes clear: if the constitution is passed, it will likely set the EU in stone.

Is the Economist right? Should the constitution be tossed out? It depends what one wants the EU to do. If one wants the EU to become an international actor capable of taking swift, tough decisions on Europe’s behalf on key questions of trade, economic liberalization, and foreign policy, this constitution is not much good. The document calls to mind Tancredi’s famous aphorism in Lampedusa’s The Leopard, that “in order that nothing should change, everything will have to change.” The current institutions of the EU are substantially altered by the constitution, and the proposed changes may make them work more efficiently than at present, but the reliance on consensus will remain the same, even though the number of member states has increased by ten.

The parallel that comes to mind is the elaborate institutional reform undertaken by Italy in 1997–98, in which a bicameral committee of parliament rewrote the constitution in a bid to make Italy’s system of government more effective. The attempt flopped, but even had it been adopted it seems likely that it would merely have reproduced the existing consensual model. The truth is that one can only govern polities that are characterized by deep cleavages by consensual means. The EU is split by nationality, and this fundamental division poses tight limits upon what the EU can become.

Berlusconi Achieves European Unity

The constitution was not rejected on these grounds, however. Between July and December, several factors soured the atmosphere of euphoria that had greeted the presentation of the constitution. The first of these was that the Italians, particularly Prime Minister Silvio Berlusconi, made a mess of running the IGC. Managing any EU presidency, let alone one that includes an IGC, is a sensitive business. National leaders need to negotiate skillfully, cut deals, soothe egos, and appeal emotionally to the European ideal whenever talks break down.

Berlusconi began his presidency on July 2 of last year by comparing a German deputy to the European Parliament to a “Nazi camp guard” for heckling his exposition of Italy’s program for the semester. In the rest of the speech and the subsequent press conference, the Italian leader lost the plot completely, to the dismay of even his political allies. Berlusconi never publicly apologized for his bizarre performance, though he did express his regrets to Chancellor Schröder privately. After an Italian minister subsequently called German tourists “hyper-nationalist blonde stereotypes” who “invaded” Italy’s beaches every summer, Schröder canceled his summer holiday in Italy. The Italian presidency had immediately broken the first rule of all euro-negotiations—don’t annoy the Germans.

The Italian government’s credentials were suspect even before Berlusconi’s gaffe. His “House of Freedoms” coalition contains the populist Northern League, whose leader Umberto Bossi has jumped on the same anti-Brussels bandwagon as the flakier British Euroskeptics. Berlusconi has a tense relationship with Commission president Romano Prodi, who is his most likely rival for the premiership in the next parliamentary elections. Italy, with its national debt of 106 percent of GDP, is also, in the eyes of the Commission and the European Central Bank (ECB) not doing enough to get its public accounts in order.⁸

It is fair to say, however, that nobody expected Italy’s presidency to be quite as awful as it turned out to be. Berlusconi’s next blunder came at the beginning of November when he hosted the EU-Russia summit. Berlusconi enjoys a close friendship with Russian premier Vladimir Putin and took the opportunity of saying that Russian troops were not guilty of human rights abuses in Chechnya, that the Chechens had voted democratically to stay in Russia, and that Putin had maintained “the rule of law and the free market” by moving against the Yukos oil company. This time, it was the turn of the French, led by Le Monde, to moan that Berlusconi’s statements were “a dishonor for Europe.” They certainly contradicted official EU policy.

Berlusconi’s conduct was the best advertisement imaginable for abolishing the rotating presidency. But in fairness, Italy’s task was not easy. As the IGC wore on, Italy’s foreign minister, Franco Frattini, did persuade his colleagues to accept a package of minor amendments, including the commonsense idea of staying with the Nice formula and allowing one voting member of the Commission to every member state. But the gap between the member states’ rhetoric of July and their intransigence in the IGC became steadily more apparent.

The crucial issue was the question of voting weights in the Council of Ministers. Poland and Spain flatly refused to accept the constitution’s “double majority” proposal, which was warmly advocated by the French and the Germans. Both sides wrapped themselves in the Euro flag over this issue, with the French and the Germans sorrowfully claiming that the Poles and the Spanish were showing a lack of decent European spirit by clinging to the generous voting weights given to them at Nice.

The issue, however, is not merely about Spain and Poland being greedy. The argument, as Paris and Berlin know full well, is really about who can say “no” in an enlarged EU. If the distribution agreed at Nice is maintained, Spain and Poland will have a big voice in the EU’s future decisions. Working together (and the two of them have a common interest in ensuring that money keeps flowing into the EU’s regional aid program, which will be decided by a qualified majority from 2007 onward), these two countries would be hard to ignore, especially if they were backed by Britain.

The constitution’s proposed voting rules, by contrast, give France and Germany an effective veto over the future direction of the EU. Simple arithmetic shows this: together France and Germany have just over 140 million of the new EU’s 450 million citizens (just over 30 percent). France and Germany will be able to put together a blocking coalition either with the help of just three or four medium-sized countries (e.g., Belgium, the Czech Republic, Hungary, all of whom are economically dependent upon Germany) or else with the support of either Italy or Britain. The “double majority” rule opens the EU up to the possibility of government by a “directory” of the big three, if Britain’s positive attitude continues, or to Franco-German leadership with Italy tagging along in its traditional role as the “least of the great powers.”⁹

Not by coincidence, France and Germany renewed and strengthened Konrad Adenauer and Charles de Gaulle’s historic 1963 pact of friendship in January 2003 and have been closely coordinating their diplomacy in recent months. To quote Joschka Fischer: “Franco-German cooperation has been the driving force at the heart of European development and will, in my firm opinion, remain so in the Europe of twenty-five.”¹⁰

Franco-German arrogance is the third factor that has soured the mood within the EU. For three years now, France and Germany have been ignoring the EU’s Stability and Growth Pact. Germany, in particular, had insisted upon the pact, which allows the EU to impose substantial fines upon countries that fail to keep their budget deficits under 3 percent of GDP, in the run-up to the introduction of the euro. The Germans were afraid that Italy would resort to its traditional high-spending ways once it was in the single currency.

Neither France nor Germany has weathered the post-9/11 period well, and their governments have kept their sluggish, high-cost economies afloat only with a sea of red ink. This year, France stopped paying even lip service to the EU’s right to monitor French public spending. At the end of November 2003, frustrated Economics Commissioner Pedro Solbes proposed to Ecofin, the Council of Finance Ministers, that Germany and France should sharply cut their public borrowing, or else face fines. France and Germany, backed by a clear majority of other EU states, said no. The Commission is appealing to the ECJ against the legality of this decision, but the damage has been done. Spain’s finance minister, Rodrigo Rato, said angrily after the vote, “Europe must be constructed on the principle that the rules are applied in the same way for everybody.”¹¹ With the Ecofin vote, the last hope of getting Spain to yield on majority voting evaporated.

The Brussels European Council meeting in December therefore took place under the worst possible auspices. Spain, in particular, could not see why it should make sacrifices for Europe at the behest of two countries that seem to consider themselves above the law. Berlin and Paris loftily took the line that it would be better for the IGC to fail than for the constitution to be distorted and refused to budge an inch. Berlusconi, faced with a challenge that would have taxed a Cavour, put a final nail in the coffin of his reputation by his conduct of the summit. Despite boasting that he had a secret formula that would save the day, he merely tried to jolly the gathered leaders into agreeing with ill-timed banter and his trademark off-color wisecracks. His efforts flopped embarrassingly. By the end of the summit, Europe was at least united in its relief that the Italian presidency was ending.

Disunited in Diversity?

Chris Patten, the former governor general of Hong Kong who is external affairs commissioner of the EU, spoke for many when he said laconically that the Brussels summit had been “a fiasco but not a disaster.” The EU can fall back on the Treaty of Nice and wait for a more able EU presidency to find a workable compromise. Spain and Poland do not have a good bargaining position. Budget decisions loom, and if these countries wish to dip their bread in German gravy, they need to rediscover their European vocation rapidly. The new Spanish government, elected in the aftermath of the 3/11 tragedy in Madrid, is also likely to be more flexible over the constitution than its predecessor. The constitution will in any case have to be ratified by the member states and so it is just as well to reach a compromise that every government can recommend to its voters.

This fatalistic attitude to European integration is understandable. Europeans have gotten used to setbacks over the past 50 years. But even if the EU approves and ratifies the constitution in the next two years, what then? Many commentators seem to assume that the EU will then take a pause for breath and resume its collective onward march toward greater integration. But what if this is not true? There are good reasons for thinking that the EU is reaching the limits of consensual government.

First, it has exhausted the number of topics it is willing to find consensus over. Britain will never accept majority voting over tax and foreign policy; France will never accept the liberalization of agriculture; Denmark and Sweden will never permit Euro-norms to determine welfare policy. This is why the constitution is so specific about the EU’s competences and so arduous to amend. Second, if we have learned anything from the constitutional process, it is that the member states remain passionately jealous of their own centrality to the decision-making process. But any organization that has 25 potential veto wielders lacks the coherence that world politics demands. Imagine if the United States were unable to make decisions on foreign policy or homeland security because Delaware or Rhode Island were in disagreement! This is exactly the situation that the Giscard constitution congeals.

This raises the question of how Europe can find a way of developing collective policies on such issues. A directory of big states setting the EU’s agenda? We have already seen during the Iraq crisis what happens when France and Germany try to lay down the law to the rest of Europe. A two-speed Europe in which some states press ahead to intensify cooperation in areas of policy that the EU does not currently touch? Perhaps, but it is hard to see how such a “union within the union” could avoid falling out with the rest of the EU. We have already seen that France and Germany, since they strengthened their own political cooperation, no longer believe that the EU has the right to curb their domestic spending. The probability is that any “pioneer group,” be it one launched under the EU’s rules for “enhanced cooperation” or an ad hoc association of states outside the EU framework, would soon start setting its own policy priorities and put them over and above the wider EU’s concerns.

Europe, in short, is floundering. Far from being “united in diversity” as its constitution proclaims, it is increasingly looking as if it will be disunited in diversity. The events of the last six months, far from being a triumphant reunification of Europe, have sharply exposed the extent to which European unity is possible._•