The Czech government recently decided not to join the Treaty on Fiscal Union. What exactly does it mean for the Czech Republic? We have also touched upon this topic when talking to Vojtěch Belling, the Secretary of State for European Affairs.
PhDr. Vojtěch Belling, PhD. – graduated from the Faculty of Social Science, the Charles University in Prague; from the Philosophical Faculty of the Charles University in Prague; and from the Ruprecht-Karls-Universität Heidelberg. Among other positions, he worked at the Ministry of Foreign Affairs, at the Ministry of Labour and Social Affairs, and since 2009 he has held several positions at the Office of the Government of the Czech Republic. Vojtěch Belling was appointed the Secretary of State for European Affairs in 2011.
You were one of the Czech negotiators for the Treaty of Fiscal Union. What exactly have we managed to negotiate?
Negotiations over the Fiscal Pact were intense and conducted at a very fast pace. We managed to negotiate a number of key changes within the text. I consider the change of Article 15 the most important thing within the framework of the present context, which allows each state of the EU to connect to the Fiscal Pact at any time in the future, without allowing any state to veto it. Yet, we were successful in a number of other issues as well.
Can you be more specific?
We managed to prevent the contract from once and for all confirming the precedence of EU law over national law and international law. Because the approach of letting the Court of Justice give precedence to European law over national law is highly controversial, and certainly not universally accepted. Such explicit recognition by member states in a legally binding document would therefore have far reaching consequences. We have achieved, altogether with other allies, the deletion of references to the internal market, because this issue has to remain in the hands of the entire EU. Additionally, we also managed to avoid a radical transfer of powers of the Court of Justice and of the European Commission. The transfer of powers would not be justified by the Treaty’s purpose, and thus would give unelected institutions political authorities with too much power. Also, we at least partially succeeded in opening the Summits of the EU, which are ratifying the Treaty, to the non-members of the euro zone.
Why do you think the other non-members of the euro zone agree with the adoption of the Fiscal Pact?
It should be noted that non-members of the euro zone are in different positions. On the one hand, we have Denmark and Great Britain with a so-called “permanent” opt-out from the adoption of the euro, and thus the Treaty will not apply to those countries. Sweden is in a very similar situation. There is, much like in Denmark, an agreement on calling a referendum on the eventual adoption of the euro. Denmark and Sweden should facilitate the decision making because the effectiveness of the Pact with them, without a referendum, is not an option, even if they were to sign the Pact. Another six states are limited in their decision-making by the fact that they are receivers, or have recently benefited from financial assistance from the International Monetary Fund, or from the EU instruments, or because assistance was at least promised to them, and thus they have, so to speak, their hands tied. If you are receiving help from someone with your budget due to a poor fiscal and economic situation, the Fiscal Pact is hard to refuse. So, every country always considers its specific situation and makes a political decision on the basis of political decisions.
Do you consider the Fiscal Pact rather a political gesture, or can we really consider it a first constant step to the fiscal union of the EU?
Although the Pact is sometimes perceived by the public only as a mere symbolic gesture expressing our support and solidarity for the euro area, from a legal point of view, it is really a very fundamental shift in the integration of the European fiscal area. Although, in our case, the Pact would come into force only with the adoption of the euro, the mere signature of the Pact would express consent to all transfers of powers and the future effect it could have for our country. At the same time, we do not even know how we will decide to adopt the euro. Theoretically only government could do so easily, with only a narrow majority of votes. So, although the Treaty itself does not bring many new things in the area of criterion for balanced budgets, and although economists do not see many breakthroughs in it, the Treaty is fundamentally changing the decision-making procedures.
In what way?
It establishes a principle according to which the states in question are required to vote in a certain way, and also against their will. Likewise, they will have to take action against another country against their will. They also commit to jointly co-ordinate further indebtedness. Now, it is not about whether these steps are correct and necessary. Perhaps this is so, and a monetary union cannot exist without them, yet it should be clearly said that this is not a trivial change.
The coalition was seeking a consensus on a position that the government was finally going to take on fiscal union. What is the real core of the dispute?
As a civil servant I can hardly comment on political disputes within the coalition. However, I will only be happy when the topic of European integration becomes an object of a deeper political discussion which does not limit itself only to fundamental conflict between the principles of “more” or “less” Union. Instead of that, its focus should be rather on the question of what further development of European integration we prefer, what role we want to attribute to particular EU institutions, and in what areas we want greater activity of the EU, and in what areas we want the opposite. I will be very happy if we can deal with European issues much like we do with the national ones. Moreover, we don’t have to welcome each European Commission proposal only because it comes from “Brussels”, as well as everyone at home does not welcome any suggestion of government. Similarly, it is not necessary to criticize any stimulus on principle. It is simply necessary to devote ourselves to the substance of issues that are addressed in the EU, and to have a clear view about them, which is not based only on automatic acceptance or the negating of anything coming from “Brussels”. So far, the public debate on European issues has been unfortunately very flat. It almost seems like we have slipped 15 years into the past, as though we are still dealing with a question of if we want to join the EU or not.
In this respect, it seems that the expert analysis on national procedures for approval and ratification of the Fiscal Pact do not maintain a single position either.
The procedure is clearly defined by the Constitution. As regards the transfer of powers, pursuant to Article 10a of the Constitution, there must be consent to the ratification of the constitutional majorities in both chambers of parliament or the referendum. The question of whether or not this applies to a transfer of powers is not a matter of politics but of law. Most legal analysts scrutinizing a final version of the Pact agree that it applies to a transfer of powers. So far, it seems that the Treaty could be ratified rather on the basis of approval of the constitutional majority in parliament. The eventual referendum would only be called on for the matter of the adoption of the euro, i.e. in the matter of the Treaties effect, not its ratification. It should be however noted that the constitutional procedures differ from political agreements.
Can you explain this?
I am referring to the agreement on referendum embodied in the coalition agreement. Thus, the interpretation of these provisions is up to the coalition politicians. It’s hard to imagine that they will go to any independent judicial procedure with a request for interpretation of the provision in question. There is no other way than mutual agreement. Since the Pact has been substantially changing the way the EU institutions are working, e.g. voting in the Council of EU, and gives new tasks to EU institutions, one can hardly say that it did not concern the EU´s primary law. However, we can discuss whether the “trigger” of referendum, according to the coalition agreement, should be solely a formal change of the founding EU Treaties, which is not going to happen anyway. Or we can discuss if the referendum’s trigger should be any material change of the primary law, seen as a set of international legal provisions governing the EU and the functions of its institutions. As I already mentioned, it is up to politicians to agree on a correct interpretation.
The overall structure of the economic and monetary union has changed since the commitment to adopt a common European currency; furthermore it also changes the contract for fiscal union. Is the government counting on the fact that citizens would decide on the future adoption or rejection of the euro in referendum?
There are new conditions for countries joining the economic and monetary union, in addition to meeting Maastricht criterions, as well as gaining accession to the previously mentioned Fiscal Pact with all resulting consequences, but also participation in the euro zone rescue mechanisms, e.g. in the European Financial Stability Facility (EFSF) and the upcoming European stability mechanism (ESM). Therefore, adopting the euro will be associated with significant financial costs. Given the above, it is reasonable that the government considers such a considerable change of our commitment to the adoption of the euro to be interconnected with referendum. It is, however, a matter of political discussion, and the principled approach to the relationship between the representative and the plebiscite elements in democracy.
In this respect, how do you perceive further the development of EU integration? Has the European integration process reached its peak, and now can we await a gradual return to nation states?
I personally have doubts about how the current process of European integration will continue. The decision-making within the EU, but after all within the national states as well, takes place increasingly in the spirit of some processes automatically related to each other, and these processes are losing factors of politically and democratically legitimate decision-making. Thus, it has been left to legitimacy to make the decision-making more effective.
Not surprisingly, the gap between a real will of citizens, and actual steps, is widening. Then again, any argument is based on some “objective necessity”, pressure of financial markets, stability of the currency, etc., no matter what opinions resonate in society. Therefore, I hope to avoid an overheating of the integration process, which would result in the opposite. What is happening in the euro zone is a shining example. In the beginning, it was a nice idea of common currency leading to greater political connections and reinforcement of interconnections between European nations. Today, we have a situation where the tension and mutual mistrust among the euro zone members, and their nations respectively, are much higher than before the foundation of the monetary union. I do not think that the integration process has reached its peak, however any of its shifts would be linked with a growing tension in society if the process would be justified only with its effectiveness and not with the population’s will as well.