The Brexit and Multi-Level Governance in the EU

The Brexit and Multi-Level Governance in the EU

As we already know, the United Kingdom and the other 27 member states of the European Union agreed to an accord that will change some of the present interpretations of the EU treaties concerning aspects like the free movement of EU citizens in other EU member states, the ordinary legislative procedure, and competitivity regulations, that should be implemented beginning with the year 2020. This accord between the UK and the other EU member states has been the reason why David Cameron has decided to campaign for the remaining of the kingdom into a “reformed EU”. If this accord represents a real reform of the European Union is debatable, but it clearly establishes a number of changes in the social and institutional policies of the European Union for the coming years and will give to the UK the possibility to have a more “relaxed” relationship with the continent. The rest of the member states accepted the bargain that will keep the United Kingdom in the EU but will not change too much the core functioning principles of the continent, reinforcing at the same time the intergovernmental approach of the EU governance.

The agreement tries, indeed, to settle the main issues that a significant part of the British (conservative) political establishment and electorate has with the European Union, but it also does another thing: it reinforces the intergovernmental governance of the EU and enshrines in text the desire for a two-speed Europe, with a Euro-zone core and a periphery formed by the member states that don’t share the common currency:

Recalling that the Treaties, together with references to the process of European integration and to the process of creating an ever closer union among the peoples of Europe, contain also specific provisions whereby some Member States are entitled not to take part in or are exempted from the application of certain provisions or chapters of the Treaties and Union law as concerns matters such as the adoption of the euro, decisions having defence implications, the exercise of border controls on persons, as well as measures in the area of freedom, security and justice. Treaty provisions also allow for the non-participation of one or more Member States in actions intended to further the objectives of the Union, notably through the establishment of enhanced cooperations. Therefore, such processes make possible different paths of integration for different Member States, allowing those that want to deepen integration to move ahead, whilst respecting the rights of those which do not want to take such a course. [emphasis added]

In doing so, the agreement establishes a relevant role for the member states that are not part of the Euro area in participating in the decisions regarding the Euro area, if such decisions will have direct effects on the non-Euro member states economies, which, under the current financial and economic interdependence, will always be the case, especially for the United Kingdom. The City of London is the heart of the Euro financial system. Other important clauses include the enhancement of the EU competitivity through new regulations, the already known limitations on access to social benefits and the free movement of EU citizens that decide to reside or work in the United Kingdom or in other states that decide to apply the new interpretation of the existing rules. Finally, one of the most important changes to the existing rules concerns the ordinary legislative procedure and the principle of subsidiarity. Through this, the member states have decided to alter the existing multi-level governance framework of the European Union.

What is multi-level governance?

Gary Marks (1993) defined the multi-level governance as a “[s]ystem of continuous negotiation among nested governments at several territorial tiers – supranational, national, regional and local – as the result of a broad process of institutional creation and decisional reallocation that has pulled some previously centralized functions of the state up to the supranational level and some down to the local/regional level.” And as I’ve said in a previous paper (2015), “the most important implications of multi-level governance are the diffusion of the national power to the supranational and subnational power, transforming the state into an almost equal actor in the policy-making process at the supranational level, even if it remains the „masters of the treaties”. In addition, the state loses the ability to be an effective national gatekeeper and the sub-national authorities can circumvent the national government by addressing directly to the supranational institutions.”

In the case of the European Union, the Lisbon Treaty has introduced a subsidiarity control mechanism with a yellow and orange procedure that gives the national Parliaments the possibility to assess the compliance of EU legislation proposed by the Commission with the principle of subsidiarity and to try to block such legislative proposals. Through this mechanism, the national Parliaments must send – in a 8 weeks timeframe – “reasoned opinions” on the legislative acts introduced by the Commission in the ordinary legislative procedure that are deemed by the Parliaments to be in noncompliance with the principle of subsidiarity. In this mechanism, each Parliament receives two votes (one vote per chamber in bicameral Parliaments and two votes for the unicameral Parliaments) that are used to trigger the yellow and orange procedure. As we can read on the European Commission’s website:

Yellow card

If the reasoned opinions submitted correspond to at least one third of the votes assigned to the national Parliaments – or one quarter if the draft legislative act is submitted within the area of freedom, security and justice – the yellow card procedure is triggered. This means that the Commission shall review its proposal. On the basis of the review, the Commission may decide to maintain, amend or withdraw the proposal. The Commission must give reasons for its decision.

Orange card

If the reasoned opinions submitted constitute a majority of the votes assigned to national Parliaments, and the draft is submitted under the ordinary legislative procedure, the orange card procedure is triggered. This means that the Commission must review the proposal. On the basis of the review, the Commission may decide to maintain, amend or withdraw the proposal.
If the Commission decides to maintain its proposal, it must justify, in a reasoned opinion to the European Parliament and the Council, why the proposal complies with the principle of subsidiarity. In such circumstances the European Parliament and the Council shall consider whether the proposal complies with the principle of subsidiarity before concluding the first reading. If a simple majority of the members of the European Parliament or 55% of the members of the Council find that the proposal breaches the principle of subsidiarity, the proposal will not be given further consideration.

What changes will suffer the subsidiarity control mechanism under the accord?

Under the new accord, the United Kingdon and the rest of the European Union member states have agreed to create a third level of the subsidiarity control mechanism: the red card, that will permit the discontinuation of the ordinary legislative process for any legislative act proposed by the Commission that is deemed by at least 55% of the chambers of the national Parliaments to be noncompliant with the principle of subsidiarity.

Red card

Where reasoned opinions on the non-compliance of a draft Union legislative act with the principle of subsidiarity, sent within 12 weeks from the transmission of that draft, represent more than 55 % of the votes allocated to the national Parliaments, the Council Presidency will include the item on the agenda of the Council for a comprehensive discussion on these opinions and on the consequences to be drawn therefrom.

Following such discussion, and while respecting the procedural requirements of the Treaties, the representatives of the Member States acting in their capacity as members of the Council will discontinue the consideration of the draft legislative act in question unless the draft is amended to accommodate the concerns expressed in the reasoned opinions.

Now, this is considered – together with the social welfare and free movement limitations – to be one of the most important effective changes to the EU legal system. But, as Simon Hix  et. all. (2016) discuss in a recent article, the practical effects of this change will be minimal, in just 2% of the cases, and will be very hard to trigger. We can infer that Cameron needed some effective “reforms” to brag about in the next campaign and to convince his electoral base to vote against ending EU membership, but this will not stop his party eurosceptics from campaigning against EU membership. Even so, the changes to the ordinary legislative procedure are significant under the subsidiary control mechanism, even if will probably never be used. This change enhances the intergovernmental and multi-level approach of governance in the EU, enhancing the role of national Parliaments but in the same time complicating the European policy-making.

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