Thursday

22nd Feb 2018

Analysis

Would a eurozone committee enrich the EU parliament?

  • Bowles: MEPs will decide on whether to create a new sub-committee for the eurozone after May's elections (Photo: europarl.europa.eu)

The European Parliament seems likely to create a new committee specifically for the eurozone when MEPs convene in July for the first meetings of the new legislature.

The idea, set out in a letter from Sharon Bowles, the chair of the Parliament's economic affairs, to the assembly's President, Martin Schulz, is for a new economic and monetary union (EMU) subcommittee, connected to the main committee.

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Although the proposal is only a recommendation - albeit one which has the support of the main political groups on the influential economic affairs panel - it has a good chance of being put in practice when the parliament agrees its new structure for the next legislature following May's European elections.

The parliament already has two sub-committees - on human rights, and on security and defence - both of which are linked to the foreign affairs committee. But neither one handles legislation and, importantly, the proposed EMU sub-committee would not have a law-making function either.

Instead, it would have a fairly modest remit focused on providing extra democratic scrutiny - and in so doing relieving some of the time pressure on the main committee - rather than assuming separate legislative power.

The proposal would put the EMU sub-committee in charge of overseeing economic and monetary policy, the functioning of the banking union, and the use of the eurozone bailout fund - the European Stability Mechanism - together with the implementation of the fiscal compact treaty. In practice, this function would boil down to organising hearings.

The idea of having special structures within the parliament just for the eurozone is not a new idea - proposals for a separate eurozone committee were kicking around years before lawmakers' minds turned to thoughts of banking union.

In any case, it is a logical step if you have policy areas where the pace of integration amongst a group of countries is particularly fast. Some would like to go further. German finance minister, Wolfgang Schaueble, is among those to have mooted the long-term prospect of a parliament for the eurozone.

Neither the EU treaty nor the parliament's own rules allow any formal demarcation of whether some MEPs can vote on some issues but not others. Both texts make clear that in legal terms MEPs, like commissioners, do not represent the country that elected them but the entire EU.

Perhaps with this in mind, and to get around any accusations of having first and second class members, the committee proposal would not exclude MEPs from non-eurozone countries from being members.

But the rules do include a clause giving the parliament "sufficient margin of manoeuvre to organise specific forms of differentiation on the basis of political agreement within and among the political groups in order to provide for appropriate scrutiny of the EMU."

As a principle, it is difficult to argue that MEPs from countries which are outside the eurozone and do not intend to join any time in the foreseeable future should be voting on the governance of the single currency.

Although only the UK and Denmark have a treaty exemption from the euro, it is highly unlikely Sweden, the Czech Republic or Poland will join the currency bloc before the end of the decade.

Meanwhile, Romania, Bulgaria and the EU's newest member, Croatia, are many years from being close to having the economic conditions that would allow them to join.

Lithuania, which hopes to join in 2015, is likely to be the only country to join the eurozone in the next legislative cycle.

But it is not just the euro that these countries plan to stay out of.

Most of the non-eurozone countries have indicated that they will not join the banking union when the European Central Bank begins its role as single bank supervisor later this year. Of this group of countries, only Romania is likely to join the banking union.

Perhaps unsurprisingly, the plan has already provoked the ire of the UK Conservatives. Syed Kamall, who leads the 27 Conservative MEPs, described the plan as "a case of divide and rule," adding that "to create a separate committee that only euro-zone MEPs may belong to sets a dangerous precedent."

Ironically, politicians voting on matters that do not directly affect their constituents has long been a controversial issue in British politics.

The so-called "West Lothian question," which queries the justification for Scottish MPs being able to vote on matters that only affect English and Welsh people became particularly prominent in the 2005-2010 government of Tony Blair and then Gordon Brown, when Labour was reliant on its dominance in Scotland and Wales for its majority in Westminster. As an issue, it still provokes anger, particularly on the Conservative benches.

There are, of course, other policy areas where countries have opted out or are little affected by the EU.

The UK and Ireland are outside the Schengen passport-free area, while landlocked Austria, Luxembourg, the Czech Republic, Slovakia and Hungary are hardly affected by the EU's common fisheries and maritime policies.

But the pace of integration within the eurozone has rapidly accelerated in the past five years, and the rapid development of the banking union structure suggests that this pace is unlikely to drop any time soon.

These new structures and rules require more parliamentary scrutiny to hold them accountable. Any institutional changes parliament can make to do this should not be viewed as a threat.

UK seeks flexible transition length after Brexit

Britain wants to negotiate with Brussels the end date of the Brexit transition period - without saying what their preferred end date would be. The UK's position paper disagrees with the EU on other key points too.

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