A year of living dangerously

The EU’s rulebook changed on 1 December last year, with the entry into force of the Lisbon treaty. We look at its effects in practice.

No birthday candles will be needed on 1 December: the Lisbon treaty has already had a year-long baptism of fire. 

A tumultuous year of crises has tested the theory that the Lisbon treaty would equip the EU to take decisions more swiftly, efficiently and openly than before, better attuned to its enlarged membership of 27 nations.

There has been no leisurely warm-up period for the EU’s key institutions to adjust to the changed arrangements. The treaty provides for new levels of co-operation in economic governance, foreign affairs, energy security, the budget, and tackling global-scale challenges such as climate change, immigration, and organised crime – all areas that have been subject to dramatic developments over the past 12 months.

Economic governance

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The Lisbon treaty made changes on economic governance, but some of those innovations were overtaken by events. Just as the treaty was – after much delay – being ratified and coming into force, the extent of Greece’s public-finance difficulties were emerging. In January, whispering about the need for an EU bail-out (however disguised) had begun and soon the sovereign-debt crisis was in full flow. Ad-hoc arrangements far exceeded provisions of the treaty that had been long in gestation. The treaty had given legal identity to the Eurogroup – the finance ministers of the eurozone. In practice, the Eurogroup faded from view. The government leaders of the eurozone met under the chairmanship of Herman Van Rompuy, the president of the European Council, as a sub-group of an EU summit. The European Council set up a taskforce on economic governance, which became a meeting of the finance ministers from the 27 member states, again under the chairmanship of Van Rompuy. That taskforce recommended greater surveillance of national budgets – which, it is true, the Lisbon treaty had made easier.

The Lisbon treaty had maintained the ‘no bail-out’ provision of the Maastricht treaty – the notion that in the monetary union one member state would not be bailed out by others. In practice, in creating a loan mechanism for Greece and then, outside the structures of the EU, a much bigger loan mechanism specific to the eurozone (the European Financial Stability Facility), the national leaders were wriggling their way around the treaty rules. In October, they agreed that the treaty should be revised, “to establish a permanent crisis mechanism”. Even though the ‘no bail-out’ clause remained in place, this was still an admission that the Lisbon treaty had proved unequal to the task.

The new actors

The Lisbon treaty created a new post of permanent president of the European Council. Van Rompuy took up the post on 1 January and has made a success of that particular treaty innovation. He has injected some longer-term strategic thinking into the European Council’s deliberations. Some have criticised him for following the views of France and Germany and not paying more attention to smaller member states. Many have suspected him of competing with European Commission President José Manuel Barroso, for example, on strengthening the eurozone’s economic governance rules, but the two have improved their co-operation recently.

Fact File

A success, a failure or too early to tell?

Maroš Šefcovic, European commissioner for inter-institutional relations and administration.
Šefcovic says the fact that the Parliament has greater powers is leading to a widespread “change of culture”, something that member states will have to get used to. “Occasionally it seems that the treaty comes as a bit of a surprise to the member states that agreed it and ratified it,” he says.

Šefcovic believes that increased scrutiny by the Parliament has led to better legislative results. But he says MEPs need to use their powers carefully: “The Parliament has had to learn that new powers also entail new responsibilities. For example, the fact that sensitive trade files are made available to parliamentary scrutiny requires that certain confidentiality standards are observed.”

Reimer Böge, a centre-right German MEP and expert on EU budgetary affairs and inter-institutional agreements between the Parliament and the Council of Ministers.
The Lisbon treaty remains “a learning process in co-operation” between the EU institutions, says Böge. “You cannot expect that after one year things are working better. There is a tendency in certain national capitals to go back to more intergovernmental co-operation,” he says. “Of course, it is better than the Nice treaty, but the situation shows that you not only need a perfect treaty, you also need a willingness [on the part] of the institutions involved to fill the treaty with life.”

Guy Verhofstadt, leader of the Alliance of Liberals and Democrats for Europe (ALDE) group in the European Parliament.
Verhofstadt says the EU is at a “crucial moment”, with the treaty shaping relations between the EU institutions. “A new balance has been created. There are now more than 80 policy areas where we [MEPs] decide, which is double what it was in the past,” says Verhofstadt.

But the former Belgian prime minister believes that the European Commission has not adapted to life under Lisbon as well as the Parliament. “The Commission should come out of its corner fighting,” says Verhofstadt. “It is not a good thing that the Parliament is more ambitious than the Commission. We have to present proposals and ideas to the Commission, because they don’t want to. That is not good. There is a danger that it is becoming a secretariat of the Council, instead of an institution that takes the lead.”

Ian Lesser, senior transatlantic fellow at the German Marshall Fund in Washington, DC.
The EU’s global partners are still trying to work out how the treaty affects their ties with the bloc, says Lesser, an expert on transatlantic relations. “We are still not quite out of the period of trying to figure out exactly what the Lisbon treaty has meant for Europe, for European governance, for emerging European foreign policy,” he says.

“The sense one has from listening to the debate in Washington is that there is still a great deal of confusion about what it means.”

He says the US has had to adjust its approach to the new balance of power created by Lisbon. “The European Parliament has become very influential in policy areas of interest to the US, not least on questions of finance and trade.”

Lesser says the famous question posed by Henry Kissinger – when I want to phone the EU, whom do I call? – has still not been answered, but believes that may change. “More and more, the US foreign policy establishment understands that, in addition to key bilateral relations, the US is going to in the coming years start to pay more attention to the institutional relationship with Europe as a whole.”

Péter Györkös, Hungary’s ambassador and permanent representative to the EU.
Hungary takes over the six-month rotating presidency of the Council of Ministers on 1 January, and the country’s ambassador to the EU says implementation of the new treaty has been “better than sceptics expected”.

But he says there is still a lot of work to do: “There is a qualitative change in the role of the European Parliament that we fully respect, but in certain cases we need more time for all institutions to understand better how to function under the Lisbon treaty. The budget is a clear example that we have a lot to do in this area.”

Györkös says the success of the treaty will depend on how well the EU institutions learn from their mistakes. “I don’t think Lisbon in itself is a guarantee of being fit for global competition, because even with the best treaty you can fail and even with the worst institutional set-up you can succeed if you want to.”

Olivier Jehin, head of the Brussels office of the French Institute of International Relations.
Jehin says the EU and the member states still have “a lot of work to do” in implementing the Lisbon treaty. “We cannot speak of a success at this point,” he says. “There are so many things for the EU institutions and the member states to put in place.”

He says that as France and the UK are struggling with the effects of the financial crisis, the EU will have to look more and more to Germany for leadership.

Van Rompuy also represented the EU to the outside world at many summits. But the Lisbon treaty’s provisions to improve the EU’s representation to the outside world have – to put things charitably – yet to bear fruit.

A year ago, Catherine Ashton took on the twin tasks of being the EU’s high representative for foreign policy and a European commissioner. Whether this treaty innovation works is still in doubt. She spent much of her first year in struggles to set up the European External Action Service (EEAS), which has diverted time and energy away from actual foreign policy. Inherent flaws in the job description have emerged – for Ashton, regular attendance at Commission meetings is impossible. Doubts persist about her ability to do an impossible job. The EEAS will be launched formally on 1 December and in practice on 1 January. Until it is in place, judging the treaty’s foreign policy innovations would be premature.

Institutional balance

In theory, the Lisbon treaty enhanced the powers of the European Parliament, and so it has proved in practice. The member states were caught off-guard in an early test of strength, when the Parliament decided to use its new veto power over international agreements that the EU negotiates with other countries. In February, MEPs voted across party lines to reject an interim deal that the Commission and member states had struck with the United States on sharing data about bank transfers via the SWIFT system.

The MEPs objected both to what they saw as inadequate guarantees of data protection – and, equally significantly, to not being given more information in the run-up to their vote. The SWIFT agreement was not the last such tussle over international agreements. The Commission disputed with the Council whether it or the presidency should take the lead in international negotiations. More recently, over the Anti-Counterfeiting Trade Agreement, MEPs have kept up pressure for the texts being negotiated to be made public.

Officials from the member states and the Commission have learnt from experience. Where the approval of MEPs will be required, closer consultation on legislative proposals is becoming the norm.

The Lisbon treaty also gave the Parliament a greater say on legislation in areas of justice and home affairs. Claude Moraes, a British centre-left MEP who is a member of the Parliament’s civil liberties, justice and home affairs committee, says that there is already “a huge difference” in the amount of work that MEPs are doing in justice and home affairs, including immigration. “It is a complete transformation…member states are coming first to us at a very senior level about the scope of Commission proposals, which they didn’t do pre-Lisbon,” he said.

On agriculture and fisheries too, the Parliament has gained new decision-making powers, but here there have been fewer legislative proposals, so the changed institutional balance is still largely untested.

The EU budget

One of the areas of decision-making where the Lisbon treaty wrought significant changes is on how the EU’s budget is agreed. The Parliament gets greater powers of decision on all areas of spending. There is a tighter timetable for budgetary negotiations and only one legislative reading, where previously there were two. The proposal for an EU budget for 2011 – the first annual budget to come fully under the new treaty arrangements – has become a trial run for future budgets, and so all the more fiercely contested. In addition, the debate on the 2011 annual budget has been caught up in discussions of the next multi-annual financial framework, to apply after 2013. Since no budget has yet been agreed, the enduring effects of the treaty changes are hard to discern at this stage. But it is already clear that the new rules have not altered the basic dynamic: the Parliament’s role in authorising the budget is one of the most effective weapons with which the Parliament can leverage greater power and influence from the other EU institutions.