The Junckernaut is no federalist juggernaut

The move to choose the former Luxembourgeois prime minister, Jean-Claude Juncker, as the next president of the European Commission has received an enormous boost from David Cameron’s cack-handed diplomacy but fears that he represents a federalist drive in the EU are entirely misplaced. For most people in the core EU countries, and especially Belgium and Luxembourg, homage to pro-integration rhetoric is almost like that of Christians to the creed or of British Conservatives to resisting the alleged onslaught of legislative red tape emanating from Brussels (even for those who would be hard-pressed to think of a single example which actually affects their lives). That it should be such an article of faith is unsurprising from citizens of countries that have been overrun by invading armies twice in the last century. In practice, however, Mr Juncker is highly pragmatic.

What is federalism?

The word federalism needs to be defined. In a technical sense, it means that there are different powers for different layers of authority. In that sense the EU and its forerunners have been federalist since the setting of the European Coal and Steel Community in 1951, for which the pooling of sovereignty was the fundamental basis of the French initiative to set up the ECSC and was the reason why the UK stayed out, why it attempted the alternative European Free Trade Area and why when the UK did accede to the European Economic Community and ECSC in 1973, it was so controversial as to provoke a referendum in 1975.

In practice, the term federalism has been used both by its proponents and its opponents to mean a much more integrated political body, comparable in some degree to existing federations such as the US and the Federal Republic of Germany. It is hard to imagine a serious move in this direction without a major impact on taxation or expenditure. At present EU expenditure is limited to 1% of GDP which is less than a fortieth of average public expenditure in member states, compared to more like half in the US or Germany. From the point of view of taxation, the only important unifying factors originally were external customs duties and the fact that all member states are required to impose value added tax, though at rates and coverage which they could choose. Some harmonisation of VAT rates was agreed as part of the 1992 Single Market Programme, but with the sole purpose of eliminating the need for varying rates to result in member states keeping border controls on the movement of goods and services. The single market programme did also in other ways result in some more authority moving up to the EU level. Such powers were drawn up by the British internal market commissioner at the time, Lord Cockfield, who had been appointed by Mrs Thatcher, who fully supported the changes.

Juncker resisted tax harmonisation

Apart from VAT, any moves to harmonise taxation across the EU require unanimity. This has remained the case as a result of the opposition to harmonising tax from a number of countries, including Luxembourg. Under the leadership of Juncker, Luxembourg  strenuously resisted moves which would limit its ability to attract investment and otherwise benefit from low corporate and other tax rates. Indeed it was only very reluctantly and after many years of resistance that Luxembourg agreed to comply with measures to limit its provisions for bank secrecy which were obviously designed to enable depositors to evade taxation in the EU countries to which they belonged.

On the EU expenditure side, there is no possibility that it could rise even slightly above 1% of GDP during the term of the next Commission because it is so limited by the Framework Budget for 2014-20 which has been enacted by the Council and Parliament.

UK arguments cut no ice

The main reason why Juncker was being pushed by the European Parliament is as an answer to the EU’s alleged democratic deficit, since he had the backing of the largest party emerging from the May 22-25 EP elections, the European Peoples’ Party. As a way to increase democracy in the EU, the move is deeply flawed (not least because at the time of the Parliament elections at the end of May less than 10% of the electorate had actually heard of Juncker). The case against the justification of Juncker by the argument that it would make the EU more dramatic has been made by almost all UK commentators including highly pro-EU ones, in the British press. The fact remains that, however cogent these arguments may seem to the British, opinion in other EU countries especially Germany is very different. There are a number of reasons for the different German view, but they have been given a decisive push by Cameron’s attempt to veto Juncker. When asked whether they would agree with Cameron that the European Parliament should not impose its own choice as Commission president, 60% of Germans disagree (ie 60% support Juncker). This answer clearly relates to how the question was put, but as a result of Cameron’s public attempt to veto Juncker, the question is now seen in Germany in large part as one of the right of the rest of the EU not to be subjected to a British diktat. In the UK much of public opinion sees the EU debate in terms of whether the UK should be dictated to by “Brussels”. In some EU countries, the UK question is increasingly seen as whether the UK should dictate to the rest of the EU. Most opinion in these countries would like the UK to remain in the EU–but not at the cost of being told what to do by the UK.

A UK right of opt-out from any substantive further powers being given to the EU is acceptable to its partners. But the UK may have to accept a Juncker Commission, particularly following Cameron’s faux-pas. Juncker is probably not the best candidate for the job but whether or not he is chosen will not have much impact on whether other member states want to move further down the path of integration and will have no impact whatever on the UK’s right to opt out of any such moves. In regard to whether a Juncker Commission might be unsympathetic to the UK, the British government has dug itself into a whole. It had better stop digging.



2 thoughts on “The Junckernaut is no federalist juggernaut

  1. Brendan Donnelly, director of the Federal Trust for Education and Research, has sent the following comment:

    I used to try to explain to students, journalists and politicians the precise meaning of the terms “federalism” and “federalist.” More recently however I have come to accept that, in the European context at least, most non-academic British commentators simply use those terms as synonyms for “integration” and “integrationist.” They are far from wrong in this assimilation. There are not many “federalists” who reject the central projects of European integration such as the single currency, the democratic legitimacy of the European Parliament, the primacy of European law, the determinant role of the European Court of Justice, the desirability of a common foreign policy, the independence of the European institutions and the generalization of majority voting in the Council. I am quite sure that Mr. Juncker (rightly in my view) accepts all these projects as desirable and achievable, perhaps in some cases achieved goals. That is why it is entirely appropriate to describe him as a “federalist” in any usual sense of the term in this country.

    You may well be right in saying that Mr. Juncker’s tactical approach to these goals is a more cautious and pragmatic one than that of some other “federalists.” But what differentiates him from Mr,Cameron and the vast majority of his party is that he wishes to achieve these goals in the long term. Mr. Cameron and even more definitely his party are absolutely hostile to these goals and become more so with every day that passes. I suspect that Mr. Cameron personally would be prepared to accept that Mr. Juncker is a “pragmatic federalist” with whom he could work on day to day business. His party however emphatically does not take that view. Because the Conservative Party’s hostility to European integration is almost wholly ideological, it has no interest in distinguishing between more or less pragmatic versions of federalist integrationism. Today’s Conservative Party is not greatly interested in the question of the speed with which this country, as they see it, is subsumed within the European superstate. Many of them indeed would argue that a slow evolution of that process is a more insidiously dangerous prospect than clearcut and rapid integrationism. They simply fear as a matter of principle the federalist juggernaut, whatever the speed with which it may be advancing.

    I have written a commentary about the Presidency of the Commission on under the title “Three cheers for European Democracy.”

  2. Charles Jenkins replies

    I would say that the UK has implicitly accepted those federalist goals you mention which have already been achieved but does not want to go further. If in your assessment the long term aim of Juncker is that all member states should meet all the goals does that mean that he would prefer that the UK leaves?

    Brendan Donnelly says:

    I would not necessarily assume that Mr. Juncker wants the United Kingdom to leave the European Union, but I am sure he would say that the United Kingdom should not be able to prevent those other members of the Union (the majority) who want to go further faster in an integrationist direction. I am pretty sure he would also say that the other members of the Union should not be expected to make excessive efforts to protect the United Kingdom within the Union from the possibly adverse consequences of its reluctance to join in the integrationist aspirations of the majority. If there is after 2015 a renegotiation of the terms of British membership of the European Union, much will turn on who regards what as an “excessive effort” to keep Britain in the Union, despite Britain’s being unwilling to participate in many of the Union’s most important policies. For what it is worth, I very much doubt whether Mr. Cameron will be able in any circumstances to achieve a new settlement with the rest of the Union remotely acceptable to his Party.

    You may well be right in your assessment of the current (but not necessarily future) state of British public opinion towards federalist integration within the European Union. I would only caution against trying to analyse too precisely what is a very confused and confusing set of British public attitudes. My comments bore specifically on the Conservative Party. The dynamic institutional structure of the Union makes however an attitude of “so far and no further” technically very difficult to sustain. I have often thought that the failure of even pro-EU politicians in this country to recognize and embrace this dynamic aspect of the Union is a source of much confusion in the British public debate on Europe. In joining the Union, Britain becomes part of a process, not a finished arrangement.

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