10 - Squaring the institutional circle

Summary

During the sovereign debt crisis, one aspect of European crisis management became very clear: nothing would be decided before the German government had weighed its options, confronted its internal dilemmas, solved its political issues and communicated its preferences; and that once it had done so, this would quickly become the policy of the eurozone and of the EU as a whole.

From its inception, as a steadily expanding economic and increasingly political area, the European Union has struggled to reconcile the national with the supranational. For every power vested to the EU collective in Brussels, member states have insisted on clear rules for subsidiarity, jealously guarding the parameters of national decision-making. They have always been afraid of ceding too much, concerned that centralization might bring the end of legitimacy for their governments, but also in the case of larger countries, that it might diminish their ability to influence collective decision-making.

The recent crisis brought these issues into sharp relief; the only way to overcome existing institutional arrangements such as the “no-bailout rule”, which seemed to stand in the way of saving the common currency, was for states to sideline the Community method in favour of a new intergovernmentalism. After all, in the absence of clear legal Community competences, inter-governmentalism was the only option. In the process, the economically stronger EU members who would also end up being the main financial creditors, and especially Germany, reasserted their absolute dominance. The image of the German Chancellor informing the Bundestag on the position that the German government would take prior to a European summit, subsequently announcing her position and red lines to the press before entering the meeting, only for that position to become official EU policy immediately after, became a recurrent practice in the crisis years.

This may have somehow worked as a method for defusing the crisis, but in the longer term it undermines the legitimacy of the European Union project. A search, therefore, is now underway to redefine that balance between what states can do and what “Europe” will be allowed to do.