The Future of Federalism in the European Union

 

 

 

 

 

 

Alberta Sbragia

University of Pittsburgh

Director

The European Union Center

Center for West European Studies

UCIS Research Professor of Political Science

University of Pittsburgh

4E40 Posvar Hall

Pittsburgh, PA 15260

Sbragia@ucis.pitt.edu

Phone: 412.648-7405 
 
 
 
 
 
 
 

Keynote Address delivered at the European Community Studies Association Canada (ECSA-C) 2004 Biennial Conference “A Constitution for Europe? Governance and Policy Making in the European Union” 27-29 May 2004, Gouverneur Hotel-Place Dupuis, Montreal, Canada 
 
 
 
 

      I do not need to emphasize that the European Union is in many ways sui generis. It is clearly unlike any of the national systems which social scientists study. Similarly, it is not necessary for me to point out that the European Union is unlike any other international or regional organization with which we are familiar. The EU is made up of 1) very distinctive institutions and 2) member-states which are simultaneously members of the European Union and of other international organizations. It governs without having its own government, but the governments of its member-states cannot govern at home independently of the European Union.    

      Although the last 15 years or so have seen the emergence of new regional economic organizations-NAFTA being the most prominent and the most important--none are like the European Union. Scholars have thus debated the best way to approach understanding the process of European integration and especially its distinctive decision-making and institutional arrangements. 

      Federalism is one of the oldest lens through which to view the process of European integration. “The federal vision”, to use Kalypso Nicolodais’ and Robert Howse’s phrase, has been used by both activists in the movement toward European integration and by scholars who have analyzed the process of integration.¹ Both groups have seen  the “federal like” characteristics of the European Union as manifested in the European Parliament’s ever expanding powers, the key role played by the European Court of Justice, and the importance of the Commission as a policy entrepreneur and policy initiator as well as in the extraordinary existence of a single central bank  and a common currency. The policy areas falling under pillar one have been the bread and butter of scholars working within this tradition. That which scholars of the EU term “supranational” is viewed as “federal like” by scholars of federalism.  

      The federal vision has been viewed as in opposition to the “intergovernmental” perspective which is institutionally represented in the European Council and the Council of Ministers. Those working within that intergovernmental tradition have focused their attention on the intergovernmental conferences which lead to treaty revision, the institutions representing the member states, the role of the member states in the decision making process,  and the policy areas falling under justice and home affairs and the common foreign and security policy. Intergovernmentalists view the member states as holding the keys to European integration whereas those in the federal tradition tend to view the existence and power of multiple supranational institutions as evidence that the international organization born in 1958 has left its intergovernmentalist anchor.   

      Scholars interested in examining the “federal like” characteristics of the Union, therefore, focus their attention on those issue areas and policymaking institutions which are important in pillar one. Using that optic, they tend to see the EU as a “semi polity”. The existence of a common trade policy and a common currency alongside the implementation of the single market and a common monetary policy underpins the argument that the evolution of the European Union can be compared to the evolution of existing federations. David McKay, for example, argues that “the post-Maastricht EU has developed into a species of federal state”.²

      The EU of course does not always make it easy for those wishing to argue that the EU is some kind of federal entity. The reality that, for example, the EU has been unable to agree to a common EU patent is a problem. An attempt which has gone on for over 30 years has--once again--failed. Viewed in a comparative perspective, the refusal by the Council of Ministers two weeks ago to approve an EU patent which the Commission proposed in 2000 as part of the Lisbon process is striking. If we compare that to the US experience, the rejection is particularly noteworthy. The Philadelphia Convention explicitly authorized the federal government to protect new inventions, and the first US patent statute became law in 1790, even before the US had a 13^th state. In fact, the first patent was approved by the Secretary of State, the Secretary of War, and the Attorney General “who sat in dignity” to approve it. During the American Civil War, the Confederate government authorized the setting up of a patent office even before the states of Virginia and Tennessee seceded from the Union.   

  What kind of organization is it that cannot agree to such an important instrument in the economic field, precisely that area in which the EU’s powers and therefore its federal-like characteristics are strongest? And of course the fact that no one is even discussing a European Union stamp has to give one pause-apparently one can have a common currency but not a common stamp or a common patent. In a different arena there are problems as well---such as a lack of legitimacy and the much-discussed democratic deficit.  

      For analysts interested in emphasizing the federal-like characteristics of the Union, however, all such problems are in fact indicative of the fact that the Union is a semi-polity which has not yet transformed itself into a complete polity. Viewed from the federalist’s perspective, the European Union is still evolving toward a more extensively supranational institutional structure. Thus, in spite of its deficits, the current state of the European Union can be viewed as exhibiting very significant federal type arrangements.  

      Although the focus of federalist scholarship is on the supranational character of the Union, the fact that the member-states play a key role in the Union is not surprising. Federalism can easily incorporate subcentral governments as important actors at the center. Thus, the importance of intergovernmentalism and the acknowledgement that the member-states play a key role in the decision-making process is not a problem from the federalist perspective. After all, the member-states are constrained by an independent Commission, an independent Parliament, and an independent European Court of Justice. For federalist scholarship, the co-existence of supranationalism and intergovernmentalism is to be expected and in fact provides a “marker” which identifies the EU as a subject suitable for study through the lens of federalism. 

      Nonetheless, it is the existence of the supranational feature of the Union that attracts scholars working in this tradition. That supranational character means that institutions exist which are independent from the control of the member states. The existence of such independent institutions---which interact with the member states---leads to a “balancing act” between the representation of the national or territorial interest and the representation of the “European” or functional interest. It is that “balancing act” which makes federalism such a useful analytic lens by which to analyze the Union.³  

      One of the key reasons why scholars interested in federalism pay so much attention to the autonomy of institutions from member-states is the traditional distinction between confederations and federations. Confederations have traditionally been viewed as institutional arrangements in which member states retain a great deal of control over the demarcation of competences between the member states and the institutions of the confederacy as well as over policy content.   

      Although confederations differ in important ways from traditional multilateral institutions, they are unfortunately typically compared to federations rather than to traditional international organizations. EU scholars have tended to equate “confederal” with “intergovernmental”--the two however are quite different.  Although the difference between a confederal model of governance and a strictly intergovernmental one is important, it has been under-studied.⁴ The dynamics of inter-state bargaining among the EU member-states when they negotiated conventions (such as the Schengen Agreement and the Dublin Convention on the Country of First Asylum) would be interesting to study for example.  

      Federations, for their part, have been viewed as arrangements in which the important decision-making role of constituent units is offset by important policy-making institutions which are not under the control of those constituent units. Such institutions include the judiciary and those legislative institutions representing the electorate rather than representing territory. Furthermore, amending the constitution does not usually require unanimity on the part of the constituent members. In the legal realm, confederations as traditionally conceptualized differ from federations in that laws adopted by the confederation do not have direct effect.  Law, therefore, has direct effect in federations but not confederations. 

      The distinction between a federation, a confederation, and a strictly international/multilateral grouping has in fact not played an important role in recent analyses of the European Union. Generally, scholars of federalism have paid surprisingly little attention to the non-supranational but confederal aspects of the Union. That is probably due to the fact that most confederations historically were primarily security rather than economic confederations. Furthermore, they often did not last very long as was the case in the United States. The example of the American Confederation which was replaced by the American federation and the replacement of the Articles of Confederation by the U.S. Constitution  have  symbolized the idea of a confederation as something essentially unsustainable, as an arrangement that cannot work over long periods of time.  

      Yet today I would like to ask whether this traditional lack of interest in confederations may prevent us from understanding the structural impact of the Constitution on the European Union. It may be that it leads us to misinterpret the direction in which the Union is actually evolving. The argument I would like to make today is that we begin to include a serious consideration of confederalism whenever we discuss federalism in the European Union. I cannot present the argument in any detail due to time constraints, so please take this as a tabloid version.  

      Daniel Elazar is the scholar who probably did more than anyone else to put federalism as a topic of inquiry on the map of the Anglophone world. He viewed federalism as belonging to both confederations and federations. Federalism in Elazar’s view is different from the institutionalized state structure found in a traditional federal state such as Canada or the United States. Federalism in his view was an institutionalized combination “of self rule and shared rule.”⁵   The essential component of federalism in fact was that very co-existence of “self rule and shared rule”. That conceptualization, in turn, would include both confederations and federations. 

      If applied to the EU, such a definition would not necessarily make a major distinction between shared rule arrived at via the Community method--involving the Commission, the Parliament, and the European Court of Justice---and the intergovernmental method--involving the Council of Ministers and the European Council. Shared rule is shared rule--it can be accomplished either through a supranational arrangement such as pillar one or a much more confederal arrangement. In this confederal model, governments would collectively rule each other--producing shared rule-by accepting as binding the decisions of a supermajority of the governments comprising the collectivity. No supranational element as EU scholars traditionally conceive of supranationality would be involved at all, and yet we would find “shared rule with self rule.”

 

      The European Constitution being currently debated is designed to expand the range of “shared rule.” Negotiations are ongoing as we speak, and thus we do not know its final contents.⁶ I shall therefore refer to its general contours only. I would argue that the constitution, if it actually is ratified and put into place, could well be a turning point in the history of the Union because it changes the nature of the “balancing act” I spoke of earlier. In a sense, the Constitution performs a “rebalancing act.” 

  The Constitution, to put it simply, institutionalizes two models of shared rule, reconfigures the balance among the institutions within both models, and tries to establish a bridge between the two models. Thus, it institutionalizes both  the supranational and the confederal models and in so doing changes the balance between the two, reshapes the inter-institutional relationships within each model, and tries to provide some kind of over-all coherence  and  the capacity to act strategically in the international system.  

      The supranational and confederal models created by the Constitution would both be somewhat different from those which have been traditionally conceptualized. The EU would be a double hybrid--a strong federal-type arrangement which lacks a federal government, on the one hand, and, on the other, a confederal type arrangement with a comparatively strong political center but a relatively small institutional apparatus. The federal type arrangement, a la pillar one, would have strong institutions but no real political “center”, whereas the confederal model would have a relatively strong “center” but undeveloped institutions.   

      The Constitution will clearly keep supranationality within what has been traditionally called pillar one and will extend at least some elements of supranationality to the area of justice and home affairs. It will institutionalize a confederal model in the area of the common foreign and security policy and will keep some elements of justice and home affairs in that model. The area of justice and home affairs in fact will be very complex precisely because it is the policy area affected by both these models. 

      The institutionalization of the confederal model is indicated by the Constitution’s acknowledgement of what has been clear for some time.  As Youri Devuyst has recently argued, “since the 1990s, the Commission’s role as the engine of the European integration process has been gradually overtaken by the European Council.”⁷ That fact is reflected in the Constitution which recognizes the European Council as an EU institution and gives it a strategic role in the area of justice and home affairs even though the Commission’s role in that area is enhanced. In fact, the Constitution, by recognizing the key role of the European Council vis a vis all other institutions, acknowledges that the supranational dimension of the Union actually incorporates a strong dose of confederalism. That same confederalism is also evident in the tiny budget which the member states grant to the Union.   

      The decision to give the Union as a whole a legal personality also institutionalizes the confederal model and moves the member-states away from a strictly intergovernmental model. For example, the role of member-states in international organizations is to be much more coordinated and the EU Foreign Minister is to be kept informed about relevant activities.⁸  In general, the Constitution moves the whole area of foreign and security policy toward a more confederal model than has been the case in the past.  

      That can also be said for the proposal that the European Council elect a President by qualified majority. If such a proposal is in fact adopted, the President of the European Council could become the key political figure within the Union. In a similar vein, the appointment of the Union Minister for Foreign Affairs by the European Council, again by qualified majority, strengthens the confederal nature of the European Council and institutionalizes the European Council’s role in pillar one as well as in the confederal model.     

      Within the supranational model, a rebalancing will take place among the institutions. The main winner will be the European Parliament which will gain the right to participate much more extensively in co-decision and to have the final say on the budget. The role of the Commission will be different from what it has been in the past in that the Parliament now becomes a key decision-maker across a broad range of areas. If it manages to play a role in the area of trade, as proposed by the Constitution, the European Parliament will enhance its role even further.  

      In general, the “territorial” dimension of the Commission has been re-emphasized by the desire among the small states to appoint a Commissioner. Although formally Commissioners have been mandated to represent the European interest, in practice a Commissioner for many national governments has been at least a source of information and, in extreme cases, a lobbyist. The debate over Commissioners has reaffirmed both how important the Commission remains to the supranational enterprise but also how intertwined it is with the representation of territorial interest. Given the increased powers of the Commission President vis a vis the rest of the College of Commissioners, the nationality of the Commission President is likely to be seen as even more salient in the future than it has been in the past.  

      Finally, a rebalancing will also occur within the Council of Ministers. First of all, the small states, no matter what the outcome of the current negotiations are, will have a less advantageous position than they had pre-Nice and even post-Nice.⁹ The traditional “affirmative action” for small states which made the European Union so unique will have been significantly diluted. Along the same lines, the Foreign Affairs Council will be exceptionally important as it will be chaired by the Union Minister for Foreign Affairs rather than the rotating presidency which will chair the other sectoral councils. It is likely to become the preeminent Council.  

      One of the most interesting aspects of the Constitution as it goes about “rebalancing” both the federal and confederal models and the relationships within each model is that it tries to construct links between the two models. A key figure in that linkage attempt will be the Union Minister for Foreign Affairs. Although a representative of the Commission has always been present at Council meetings, the Council has never been institutionally represented within the Commission. That now will change as the Union Minister for Foreign Affairs, who will be appointed by the European Council, will simultaneously chair the Foreign Affairs Council and serve as Vice President of the Commission.  The European Council, acting under a qualified majority decision rule will be acting in its most confederal mode when it appoints the Foreign Affairs Minister. The Minister, for his part, will straddle both sides of the federal/confederal divide.  

      The European External Action Service will provide a second link between the federal and confederal models. Although the Constitution did not go into detail, it is clear that the members of the Service will come from both the Commission and the Council as well as incorporate national officials. The formation of the Service will undoubtedly include a great many turf battles.¹⁰ It is also true, however, that creating an EU diplomatic service will link the two models--at least outside of the European Union itself.  

      The Constitution thus seems to me to deepen and extend the reach of federalism within the Union. The supranational model is enhanced while institutional relationships are rebalanced within it. Simultaneously the various intergovernmental types of relationships which the member-states  have pursued outside of pillar one and outside the Union are I think being pulled together in what would be a recognizable confederal model.  Federalism -understood as “shared rule”--is evident in both pillar one and pillar two. 

Does the Constitution represent a step toward a federation as traditionally defined? No, Is it a step toward a deeper and more sophisticated form of shared rule? Yes. Is it a step toward a “government” as traditionally defined in a federal state? No. Is it a step toward more governance understood as more shared rule? Yes. It is precisely because the degree of shared rule is going to be deepened and made more intrusive that the issue of representation is so critical. It precisely because of the expanded range of shared rule that the issue of voting weights and representation in the Commission is so vital. Andrew Moravscik has been arguing that the European Union has come to a plateau. I do not agree. I would argue that shared rule is going to deepen which is why the conflict over representation is so visceral and so very difficult.  

      It is quite possible however that the Constitution, once approved by governments, will not come into force due to problems of ratification. If that should be the case, I would expect the confederal model to emerge even without the Constitution. The model will be patchier and perhaps develop less slowly than it otherwise would have, but I think the chances are quite high that the member-states will begin to act in a confederal manner in the area of common and foreign security policy. The supranational model within the Union would remain largely as it is, but the confederal model would keep evolving.  

      External events I think will force that. The new enlarged European Union now lives in a different geopolitical world than it did before May 2004. The Caucuses and Central Asia rather than Eastern Europe are now its neighborhood.  Its “regional system” is now a different kind of place. 

      The signals that external events will force the pace of confederalism are already evident: the President of Azerbaijan last week asked the EU to become more involved in bringing a resolution to the Azerbaijan-Armenia dispute while the response to the bombings in Madrid led to the appointment of an anti-terror “tsar” who will report to Javier Solana. In a similar vein, discussions are already going on about appointing the EU foreign minister during the next Commission’s term rather than waiting until 2009. And it is likely that the European External Action Service will be formed before the Constitution is ratified and will go ahead even if the Constitution is rejected. Just as the attack of September 11, 2001 led to the adoption of the European “arrest warrant”, it is almost certain that the European Council will act ever more cohesively as external events impinge on the European Union. 

      In conclusion, I am arguing that discussions of federalism in the European Union need to incorporate serious analyses of the confederal form of governance. The process of writing a constitutional treaty has, perhaps ironically, served as a catalyst for a significant movement on the part of the EU’s member-states toward a greater degree of “shared rule” outside of both the supranational and intergovernmental models. I think that a deeper form of shared rule will develop even if the constitution itself is not ratified.  The European Union therefore would become a more balanced entity--the balance being between a “federal type” or “supranational” arrangement, on the one hand, and a confederal or “shared rule” arrangement on the other. Federalism defined as the combination of “shared rule and self rule” is thus alive and well in Europe and will continue to shape the future of Europe’s citizens as well as the future of the Americas. 

¹ Kalypso Nicolaidis and Robert Howse (eds.) 2001. The Federal Vision: Legitimacy and Levels of Governance in the United States and the European Union. Oxford University Press.

² David McKay.  2001. Designing Europe: Comparative Lessons from the Federal Experience. Oxford University Press: 6.

³ Alberta Sbragia. Summer 1993. “The European Community: A Balancing Act,” Publius: The Journal of Federalism. Vol. 23, No. 3, pp. 23-38.

⁴  For an exception, see Frederick K. Lister, 1996. The European Union, the United States, and the Revival of Confederal Governance, Westport, Conn: Greenwood; Frederick K. Lister. 2001. The Later Security Confederations: The American, “New” Swiss, and German Unions. Westport, Conn: Greenwood; Murray Forsyth,  1981. Unions of States. Leicester University Press.

⁵ Daniel J. Elazar. 1995. Federalism: An Overview. Pretoria: HSRC Publishers, p. 2.

⁶ Technically, the Constitution is a treaty and should therefore be referred to as a Treaty-Constitution. However, I shall follow conventional usage and refer to it as a Constitution.

⁷ Youri Devuyst, EU Decision-Making after the Treaty Establishing a Constitution for Europe, unpublished manuscript, May 2004, p.8

⁸ Simon Duke, The Convention, the draft Constitution and External Relations: Effects and Implications for the EU and its International Role.    European Institute of Public Administration, Working Paper No. 2003/W/2, p. 7

⁹ Alberta Sbragia. July 2000. “The Treaty of Nice, Institutional Balance, and Uncertainty,” Governance, Vol. 15, No. 3.

¹⁰ Simon Duke, The Convention, the draft Constitution and External Relations: Effects and Implications for the EU and its International Role.    European Institute of Public Administration, Working Paper No. 2003/W/2, p. 9