After austerity: the beginning of the end?

Five years of austerity dictated by unelected technocratic bodies has eroded Europe’s distinctive social model, which distinguishes it from the US style of neo-liberalism and Chinese and Russian-style authoritarian models.

The past years bore witness to the impoverishment of entire countries like Greece, as the EU rushed to rescue its banks in a bid to prevent an even greater catastrophe. Other countries have seen massive cuts in public expenditure. Often, national governments shift the blame on the EU rather than on their own prodigal ways.

This blame game – coupled with the Commission’s aloofness – has deepened the democratic deficit in the European Union. The perception that the EU is a heartless technocracy will probably result in a dramatic increase in the number of MEPs representing Eurosceptic, neo-fascist and tea party-like populist groupings.  Contrasting a faceless technocracy has been the greatest asset for these parties. The success of these extremist groups will be compensated by an affirmation of left wing parties who insist that, “another Europe is possible”.

But the weakening of the two centrist parties will probably make the election of EPP candidate Jean Claude Juncker and socialist candidate Martin Schulz to the post of President difficult, unless the major parties converge on the candidate with the most seats. This could pave the way for a compromise candidate enjoying no popular legitimacy – a prospect likely to deepen Europe’s democratic deficit.

Polls now betray a lack of interest among EU citizens for these elections, which are in turn regarded by some as the most important in the EP’s history. Despite the bleak prospects facing Europe, the rise of populist movements on the right has also prompted a vibrant response from within European civil society in the shape of a proposed New Deal for Europe calling for public investments financed by a carbon tax and a financial transaction tax. If 1 million signatures are collected, this popular initiative may well set the agenda of the next parliament.

The new ‘kids’ on the block

The next parliament is likely to see a weakening of European centrist parties, namely the social democrats and the popular party, and an increase of euro-sceptic, far right and populist parties.

Foremost among these are Geert Wilders Freedom Party, Nigel Farage’s UK Independence Party, Marine Le Pen’s National Front and Beppe Grillo’s 5-star movement.

Some of these, like Farage’s UKIP, may be cast as the EU’s equivalents of the tea party wing of the US republican party, characterised by a suspicion of big federal government and modern secular values.

But the European Parliament is also set to host a contingent of even more extreme  neo-nazi outfits like Jobbik and the Greek Golden Dawn, known for vigilante actions against gypsies and migrants and for their admiration of Russian President Vladimir Putin.

Marine Le Pen’s party also has roots in the neo-fascist right, though they have toned down their extremism to become more electable over the past few years. The FN also plays its Islamophobia as a defence of French secular values and has also – awkwardly enough – supported Putin’s destabilisation of the Ukraine, abandoning the Ukranian far right.

Some of these parties, like Marine Le Pen’s National Front Wilders’ Freedom Party, may group together in a new right wing group. Others, like the UKIP and Beppe Grillo’s protest movement, will probably shun any association with the far right.

Grillo’s party is actually largely ambivalent on immigration. In fact, an internal vote among party activists had called on the Cinque Stelle MPs to vote in favour of decriminalising immigration. While campaigning against big business interests at local level, the party panders to the economic grievances of the petite bourgeoisie –traditionally the constituency of the hard right.

On the other hand, immigration features highly on the UKIP list of grievances, even if the party is at pains to distinguish itself from the far right. Both the UKIP and Grillo’s movement have been dismissed by the establishment as indulging in bar talk, but their success also exposes the failures of a technocratic elite which has removed passion from political discourse. 

It is also doubtful whether MEPs elected on behalf of parties dedicated to exclusively defend perceived national interests can collaborate with each other in the long run. One previous attempt to unite the European far right failed after Romanians took umbrage of the French right’s demonisation of Romanian migrants.

Polls also predict an increase of the European left, which has united around the candidature of Greek opposition leader Alexis Tsipras who, unlike the eurosceptics, tends favour more Europe in matters like taxation, investment and social protection but are extremely critical of the neo-liberal direction taken by EU institutions. But the European Party proposing Tsipras is not without its contradictions; between a hard core which views the EU as an un-reformable capitalist institution and progressives like Tsipras, who want even more European integration in matters like public investments. The group also tends to split on foreign policy issues, which are bound to feature in the next parliament’s agenda in the wake of a mounting civil war Ukraine.

The next EC President

With just over one week to go until voting starts, the latest PollWatch2014 prediction puts the EPP ahead of S&D by only three seats: 212 to 209. On the other hand, non-attached MPs, which include some of the main eurosceptic parties, will increase from the current 33 to 95. The left will also increase its MEPs from 35 to 52. The EPP is set to see its share decrease from 274 to 212 while the Social Democrats will see a small increase.

Other defenders of the European project, the left-leaning greens and the centrist liberals are also set to lose seats.

There is no guarantee that the candidate of the European political party which wins most votes in 2014 will automatically become the head of the Commission.

Bringing the EP elections forward from June to May gives the new Parliament more time to decide on a nominee. However, MEPs could prove unable to reach agreement on time.

Although all parties are committed to respect the choice of voters when it comes to choosing the next commissioner, it is most probable that neither Schulz nor Juncker will command a majority in the new parliament. Moreover, if Juncker wins a relative majority of seats as predicted, the only way for the Socialists to honour the commitment not to elect anyone not indicated by voters, would be to support the conservative candidate.

Polls on voting intention indicate an increase of euro-sceptic and far right MEPs, and a weakening of centrist parties. The more varied composition of the next European Parliament will make it extremely difficult for the EP to assemble (on time) a majority behind a candidate for the office of Commission President.

But even if the Parliament settles on a nominee, the European Council composed of EU governments might not endorse the EP’s choice.

And there’s no foregone conclusion that the two EU institutions will interpret the Treaty provisions in the same way, supporting the same candidate, which might then cause stand off which may paralyse EU institutions.

Engaging transnational political parties in direct competition for executive office has introduced a sense of democratic accountability but also has some potential perils: the EP’s scrutiny role vis-à-vis the Commission could be weakened if parliamentarians were inclined to support and protect ‘their’ Commission President.

Main issues facing next parliament

Apart from the election of the next President of the European Commission, the next parliament will face a number of issues and pending directives.

The presence of eurosceptic MEPs on its own turns the future of Europe itself into an issue. A strong performance by the extreme right will also make the adoption of a common migration policy a more unlikely prospect as mainstream parties like the EPP will be more attentive not to lose more votes to the far right.

An affirmation of left wing parties could also increase pressure for more substantial taxes on financial transactions, which has been watered down to an enhanced cooperation agreement between 10 states described as  “window-dressing” before MEP elections by OXFAM. 

The creation of a common European energy grid is a central issue for both the European liberals and the greens. Events in Russia have increased the urgency of a common energy policy.

The agenda of the new parliament will largely depend on what laws the new Commission proposes and what the new Parliament pushes for, but some issues can already be indicated based on the current work programme.

EU-US Trade and Investment agreement: Currently under negotiation, this agreement will be put to a binding vote of the European Parliament next term. MEPs – especially the greens and the European left – have expressed concern about data protection, cultural and regional diversity and a fear of further erosion of the European social model in the face of US neo-liberalism. Multinationals may also use this agreement to legally challenge areas where high EU standards may be seen as an obstacle to trade. A main concern is that the agreement will not be subjected to the scrutiny of elected transnational authorities.

2030 energy and climate targets: A proposal aiming to reduce greenhouse emissions by 40% below 1990 levels and setting an EU-wide binding target for renewable energies of at least 27% by 2030. News of melting Antarctic ice sheet, prompting an irreversible domino effect were a strong reminder of the need of urgent on climate change. But a weakening of the green contingent in the European parliament could deflect pressure on this global issue.

Data protection and privacy: New rules are also envisioned to improve privacy, adapting existing patchy rules to the new Internet realities, allowing citizens better control of their own data. Issues such as erasing personal data, profiling, transfer of data to third countries and penalties for privacy breaches were amended by the European Parliament at first reading. Use of data by police authorities is also on the agenda.

Data retention: Following a ruling by the Court of Justice, existing anti-terrorism legislation requiring telecom operators to keep a record of some user data will have to be revised.

EU passenger name records: This proposal would oblige air carriers to provide member states’ authorities with passenger data. The aim is to fight serious crime and terrorism, as was the case with the PNR agreement with the US.

Emission Trading Scheme revision: To improve the working of the CO2 trading system, a proposal to establish a stability reserve at the beginning of the next ETS trading period in 2021 to make the market more stable.

Fees for paying with cards: Proposal establishing caps on fees when paying by debit and credit card for domestic and cross-border purchases.

Women in boardrooms: A target of 40% women among non-executive directors of companies listed on stock exchanges, to be achieved by 2020.

Maternity leave and parental leave: Parliament voted this term to extend minimum paid maternity leave in the EU from 14 to 20 weeks, and for at least two weeks paternity leave. No agreement with Council on this, the issue will be up to the new Parliament.

Cloning, novel foods: Following EP rejection of previous proposals, new ones are on the table for dealing with market authorisation and food labelling.

Reform of the banking sector: New rules to limit the risky activities of large, complex banks. The Commission proposes that supervisors be able to request that banks separate certain risky trading activities from their deposit business.

Shareholders’ say on directors pay: A new draft law would strengthen the powers of shareholders of companies listed on EU stock markets over remuneration decisions. Shareholders would have the right to vote every three years on plans on maximum pay of board members.

Port services: Measures to improve transparency in public funding of ports, ensuring fair competition and reviewing restrictions on the provision of services at European ports, while guaranteeing safety standards.

Food safety: Measures to tackle the introduction of pests and outbreaks of animal diseases. The proposals aim to strengthen controls along the food chain to fight food fraud. MEPs have called for tougher penalties.

Money laundering: Measures to tackle money laundering and the funding of terrorism, covering casinos and the role of notaries.

Public procurement and third countries: An instrument dealing with access by companies of third countries to public contracts in EU Member States. The issue of reciprocity (access conditional upon the country giving access to European companies) is a key element of the proposal.

Proposals for legislation

The incumbent Parliament has also requested new measures on a number of areas, following the possibility to initiate legislation given by the Treaty of Lisbon (Art. 225 TFEU). The requests which will be inherited by the new parliament include a number of resolutions. These include legislation on the following items.

• A more integrated digital single market, ending geographical restrictions on internet sales.

• Stronger economic governance, with introduction of automatic stabilisers of a temporary nature and a social pillar of the European Monetary Union.

• Further development of the banking union: cross-border deposit guarantee system, fiscal compact under community method, gradual establishment of a redemption fund for bad debts, common issuance of Eurobonds.

• Additional measures to fight tax evasion.

• Effective equal pay for equal work.

• A European defence industry strategy.

• An EU instrument to combat and prevent violence against women.

• A legal act for information and consultation of workers in the context of strategic  restructuring of companies, ensuring dismissal only as last resort.

• Consolidation of passenger rights in all modes of transport.

• Updating water framework directive to take into account technological advances for recycling water.

• An EU policy on water shortages and droughts.

A new deal for Europe

European civil society can also be a protagonist in setting the agenda for the next parliament.

A European citizens’ initiative is an invitation to the European Commission to propose legislation on matters where the EU has competence to legislate. A citizens’ initiative has to be backed by at least one million EU citizens, coming from at least 7 out of the 28 member states. A minimum number of signatories is required in each of those seven member states.

One such initiative is the New Deal for Europe which has already been endorsed by 4 of the five candidates for the Presidency of the Commission, namely the left-wing Alexis Tsipras, the Green Ska Keller, the liberal Guy Verhofstadt and Socialist Martin Schulz is the proposal to introduce a European wide tax on financial transaction and another of carbon emissions to finance an increased EU budget to be used to finance public initiatives. 

The proposal carried the signature of leading German sociologist Ulrick Beck, the iconic 1968 student leader and former green MEP Daniel Cohn Bendit, the activist Italian priest Don Luigi Ciotti French Marxist economist Michel Aglietta and former Commission President Romano Prodi.

The signatories declare that they are no longer willing “to accept this kind of Europe which produces: unemployment, temporary and under-remunerated job, cuts to the welfare state, growing poverty, economic and social decline, and destroys hope and expectations”.

The initiative is being promoted by many European federalist movements, trade unions, civil society organisations, mayors of important European cities, and intellectuals. In Malta, only Alternattiva Demokratika has so far backed the initiative