Toespraak Siim Kallas over het besturen van de EU (en)

SPEECH/07/195

Siim Kallas

Vice-President of the European Commission responsible for Administrative Affairs, Audit and Anti-Fraud

Challenges in the governance of international organisations: the experience of the EU

Columbia University

New York, 26 March 2007

I am in New York for two reasons. First, to represent the European Commission at our events in the UN to mark the 50 th anniversary of the birth of the EU. In March 1957 6 heads of state signed a Treaty in Rome which created the original European Economic Community and which still forms the heart of today's European Union. Secondly, I am here to continue the co-operation which we have been developing with the United Nations over the past 18 months, in which we aim to share best practice across a wide range of matters concerning the administrative practices of the two bodies.

In today's lecture, I want to look at the most important successes of the EU in its first half century, and how our governance structures have enabled us to achieve these. Then I want to look at the challenges facing the EU today. I will look at why the Union is still important - indeed the prospect of membership is very attractive to many of our neighbouring states - but also at how and where it needs to evolve. And finally, I will look how the European model of cooperation can continue to deliver over the next half century, and at its relevance to the rest of the world. Here, I will argue that far from being doomed to fade away to irrelevance, as some of our critics expect or hope, the EU's approach has much to offer compared to the a world system dominated by one state through its military power, the capitalist authoritarianism of China and increasingly Russia or of course militant jiahadist Islam.

50 th anniversary of the EC

The first ambition of the EU remains its greatest achievement: bringing peace to a continent with a history of continual war, culminating near suicidally in World War 2. The first European Community was created by the Coal and Steel Treaty of 1951, underpinned of course by American generosity in the form of Marshall aid. A mere six years after the end of the war, this placed the control of the basic industrial goods needed for war under a common supra-national authority: the simple idea was that if states did not control the means to run armies, they could not wage war against each other.

The economic community of six years later was to build on the success of the coal and steel community - but not by attempting immediately to create a deep political union - no "united states of Europe†- nor via a defence treaty. Instead, the habit of cooperation was developed through economic integration - both politically less sensitive, but also capable of showing tangible results quickly, so reinforcing the impetus for cooperation.

Nonetheless, right from the beginning, the EU did not operate simply on the basis of intergovernmental cooperation but had common permanent structures with substantial power. An administration - the European Commission - was created, headed by Commissioners who, though normally former senior national politicians, were (and we remain) required to act independently of national government, taking decisions only in the best interests of Europe as a whole. The Commission draws on the services of a substantial and permanent expert staff, with the status of European civil servant, whose whole career is dedicated to understanding how most effectively to deal with the challenges of European integration and who are selective on the basis of very competitive procedures. The remuneration and conditions are designed so as to attract top expertise from across the continent.

The European Commission has a double role: it is "the guardian of the Treaty", watching at correct application of European laws, and has the sole right of initiative for new legal proposals. Only the Commission can make formal proposals for EU policies, though the basic laws have to be agreed by Member States' ministers in the Council. In the early years of the then Community, legislation was agreed unanimously by all the Member States. Gradually majority voting has become the rule. This is based on voting weighted roughly by population, but with the small Member States having proportionately more votes to stop them being ignored by the big states.

In an effort to increase accountability at the heart of the Union, the powers of the Council to agree legislation have been increasingly shared with the European Parliament - since 1979 the world's only directly elected supranational legislature, with 786 MEPs. In most policy areas, the Parliament (which is divided into political groups along ideological rather than national lines) as well as the Council must agree with proposed legislation before it becomes law.

Once adopted, European laws are binding on and in Member States. the Commission monitors the EU law, checking on whether Member States are properly applying EU. When they do not, it may challenge them in another Community institution, the European Court and ultimately fine them for non-compliance. Indeed the EU is regarded as a community of law, because it is the European legislation that has given substance to the rhetoric of integration: over time, the European Court has held that individuals can rely directly European law them in national court cases, that national legislation inconsistent with European law must be set aside, and even that Member States are liable for damages if they do not apply them properly.

This system, which we call the "Community method†has meant that Europe moved away from the nationalistic "Great Power†system of the 19 th and early 20 th Century. This had consisted of unstable and shifting alliances between the six Great powers, and trampling on the interests of the smaller states. Instead, with the Commission acting as a powerful advocate of the pan-European interest and as broker in negotiations, it is possible to find much more effective solutions - and to negotiate them much more quickly - than would be possible by intergovernmental methods alone. And while Member States' compliance with European Law is inevitably not perfect, the legal and political means available are sufficient to ensure that most actors - be they Member States themselves, businesses or individuals - can act on the basis that rights given and obligations undertaken at EU level will ultimately be respected.

Like any organisation or indeed state, the EU has experienced periods of both success and stagnation over the years. But over all, it is clear that the project has been a great political and economic success. Its attractiveness is confirmed by the fact that so many nations have taken the difficult path to follow the model of integration and eventually joint the Union. Over time, and building on the success of the initial economic community, the policies governed at Community level have been considerably reinforced by a series of amendments to the original treaties, to include or strengthen powers beyond the economic sphere in relation to civil and criminal law, immigration, environmental and social policy, consumer affairs and public health - and foreign affairs - though here the powers of the Union are patchy, ranging from trade policy where the Commission has exclusive right of negotiation on behalf of all Member States, to classical diplomacy, where effective action is possible only if all Member States agree.

The Union's success is seen most obviously in the economic field - in the creation of the world's largest single market for goods and services and the euro. It is demonstrated by the right of free movement all EU citizens enjoy, to live, work or set up businesses in all Member States

But it is also seen in our ability to act quickly and effectively when circumstances really require this - as in the creation of the common European Arrest Warrant, allowing those suspected of serious criminal offences to be returned rapidly for trial to the place where the offence was committed. Most recently, we have been able to draft and agree the framework of a common energy policy and newly invigorated approach to climate change in little over a year, after events made the need for such a policy clear.

Reform

Much of the success of the Union can probably be traced to its ability to develop organically and grow, expanding powers and enlarging to embrace new Member States as political and economic circumstances permitted. But there have been dangers with this approach: while there was high level political will for the Union to take on new tasks, the structures of the Union's institutions - particularly the Commission - strained to adapt as tasks increased to put in place the mechanisms to ensure delivery. As corners were cut in an effort to make do with insufficient available resources, administrative procedures were circumvented.

Crisis point was reached in 1999, when the Commission was forced to resign after a series of scandals - and an independent investigatory committee reached the damning verdict that there was nobody within the house who would take responsibility for the irregularities that had happened.

Reform was a necessity to restore confidence in the institution: it required modernising the administration, to make the Commission fit for the 21 st Century and ensure it could to deliver policy and programme management rapidly and coherently.

There were three essential elements:

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  Improved financial management.
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  A new strategic planning - to make better use of limited resources.
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  A new personnel policy - both to ensure we could make most effective use of our expert staff, and to eliminate the previous informal system where certain top posts were "flagged†for particular nationalities.

Achieving reform required long and intensive negotiations with the Commission's staff Unions and with our Member States. By late 2004, when I took over responsibility for the administration, audit and anti-fraud portfolio, we were able to conclude that virtually all measures had been implemented.

Beyond reform: ethics and transparency

Reform may objectively have put in place the measures need to ensure the Commission could perform its tasks effectively. But international organisations are not like national governments. There may be fierce political argument about the ideal scope of national administrations, but virtually no-one would suggest their abolition, no matter how badly they perform. For the Commission and other bodies such as the UN however, there are plenty of doubters - and in spite of our best efforts, we inevitably remain much more remote from the citizens of Europe than national government. Thus in spite of the profound achievements of the Union mentioned earlier, any short comings in the Commission lead some to question the very existence of the institution.

Thus since coming to office, I have worked on measures to strengthen the legitimacy of the Commission - transparency and more recently a new ethics policy.

The transparency initiative, which was finally adopted by the Commission only last week, aims in particular to ensure citizens can readily understand how the €100 billion budget of the Union is spent: Member States have finally agreed to publish the end beneficiaries of the Common agricultural policy and other aid schemes. Equally importantly, the initiative will bring order to the extensive lobbying industry in Brussels. It is no doubt another sign of the success and importance of the EU that the number of lobbyists in Brussels is second only to Washington - and it is important that the Commission does hear the views of all those affected by our proposals. But the possibility that we may be influenced by people who do not disclose their clients was very real, and contributed to the feeling of distance between citizens and Commission.

Under the policy just adopted, lobbyists - broadly defined to include law firms NGOs and think tanks as well as corporate lobbyists and consultancies - will be invited to register with the Commission and accept a code of conduct. In particular, they should declare funding sources and major clients. This ensures the Commission as well as the public can identify and assess the driving forces behind positions taken and interests presented. The code is for the moment voluntary, but I hope lobbyists will see the reputational value of registration. If necessary, we will consider making the register mandatory.

In the field of professional ethics, it is vital that the conduct of both officials and the politicians - Commissioners and MEPs - is beyond reproach. With the chance to influence legislation, and large and complex procurement programmes, the scope for abuse is obvious, though the fact that Commission officials are both permanent and well paid means problems are rare in practice - but deeply damaging when they occur. Although we of course have detailed, they are often an ineffective means of achieving the behaviour expected. Common sense demands some flexibility regarding the acceptance of gifts or avoiding conflict of interests for example - but of course, with staff drawn from the varying traditions of different Member States, there is no shared common sense. Therefore, the Commission has just agreed that work should start on developing common ethical principles for the EU Institutions.

Enlargement and the constitution

In a sense, the Union has now become the victim of its owns success - governance and decision making is of course much more complex with 27 Member States than it was with the original six, particularly as there is now much greater economic and cultural diversity among the states. As the past fades into history, those once eager to co-operate to avoid future conflict now feel more secure and less guilty - so are more confident in taking more nationalistic positions and challenging deeper integration. Member States that were at the heart of the original project find that in a Union of 27 it is no longer possible to assume that the interests of the Union are always the same as the national interest.

To try to address the difficulties enlargement was expected to create in decision making, great effort was put into drafting a new "European Constitution", which was to replace our existing Treaties and amend the institutional framework to ensure it worked efficiently for a Union of 27 plus Member States and a population of half a billion. It was also hoped that the Constitution would re-connect the Union with its citizens.

The Constitution was supposed to achieve this by ending the rotation at the helm of the Union (by creating a permanent President for the European Council (the meeting of heads of government) and foreign Minister, by making the Commission smaller (so there would no longer be one Commissioner coming from each Member State). It also aimed at rebalancing voting rights among Member States essentially in favour of the most populous member states. While the Treaty was agreed by all Member State governments in 2004, referenda held to ratify it were lost in two counties -not perennial sceptics, but France and the Netherlands, two of the founding Member States. This was in part an expression of dissatisfaction with the national governments of the time, but also of the fear, particularly in France, that the EU had become too Anglo-Saxon in outlook.

The shock of loosing the referenda was a considerable blow for the European political class, and has been followed by a period of soul searching. The current German Presidency of the EU has made a priority of trying to re-launch the Constitution, but at least until the French elections are over, it seems unlikely that much progress can be made.

I would not want to sound complacent, but so far I do not think the failure to change the existing Treaties has been as problematic as many expected. As the example of the energy policy shows, the recent enlargements of the EU have certainly not made effective decision making impossible. Instead the role of the central players in the negotiating process - the Commission and also the Council Presidency, held by Member States in rotation - appears to have been strengthened. Only these players have the expertise and resources to seek to understand what is important for each state and make proposals accordingly. Effective decision making thus now depends on good cooperation between the Commission and Presidency.

As we consider how to resolve the Constitutional problem, I think it essential that we recognise the importance both of the Community method and the fact that the Union remains a grouping of still sovereign states, large and small. The Constitution considered that a Commission of 27 or more members was too large to be an effective executive. I do not think we should be concerned if the Commission remains this size: as important as efficiency is the fact that the current structure allows Commissioners to bring experience of the political and economic systems and cultures of all Member States to bear on our decision making. This, and the role of Commissioner as representative of the Commission to his or her country of origin, would be lost with a smaller Commission. There would also be a great risk that those Member States without "their" Commissioner would insist on compensation in the form of senior appointments in the Commission services. This would undermine all our attempts at ensuring the Commission has a stable, expert staff, chosen on merit at all levels of the organisation.

Whatever the settlement of the Constitution, coming from a smaller Member State, I must stress the importance for the "smalls†that we retain a forum where voices from the smaller states are not totally drowned out by the few big Members.

The EU in the wider world

But is the EU simply a surprisingly effective system for decision making among disparate states, or is there a European Vision which is important for the rest of the world?

I would argue that the EU is distinctive. It is based on a common European view of the importance of a functioning market with level playing field fundamental human rights and democracy - heavily influenced by many Member States' experience of authoritarianism in various flavours. As a continent which has long been densely populated, Europe has embedded in its core values some of the reflexes needed to manage and share limited resources - and to balance the short and long term. In this, it differs greatly from the "frontier" culture of the New World.

Though no doubt a cause of many past tragedies, Europe's diversity is also its greatest strength, allowing rapid comparison and cross fertilisation between different traditions and the creation of new approaches. The EU model further stimulates this process, often relying on setting only minimum standards, and then requiring Member States to accept other Member States getting similar results by other means. We call this mutual recognition, but of course it can only work within the framework of mutual trust established through states working together constantly.

Has this model delivered? As noted before, we have certainly rebuilt Europe as a place of peace and democracy - a truly massive achievement given our history. In particular, the Union has played an important role in stabilising and strengthening the democratic institutions of Member States emerging from authoritarianism.

But have we achieved prosperity, or is the EU doomed to decline and economic dynamism move elsewhere?

Although recent years have seen lower figures for raw economic growth than in the US - and we have adopted measures to try to improve economic performance - the figures do not tell the whole story. First, much of the difference between EU and US GDP growth figures is due to population growth through immigration in the US: GDP per capital has evolved more similarly on both sides of the Atlantic. And labour productivity per hour is actually higher than in the US in many core "old" Member States, while rapid economic growth continues in the eastern states. So the EU has certainly not institutionalised economic sclerosis - Europe has simply made a democratic choice to balance material wealth and lifestyle differently. And some measures of social welfare, such as life expectancy, are significantly higher in the EU than US as a result.

Europe has always been about bringing people and states together voluntarily and fostering mutual respect and understanding. So I would not want to tell you that the EU is perfect, and the rest of the world should simply copy us - though elements of our approach have certainly influenced MERCOSUR and the African Union, every region has unique issues needing their own solutions.

But I do think there is much in the European model of governance from which the rest of the world can learn, particularly as we live in a time when very many issues - trade, terrorism, large scale population movements, pandemic disease and climate change to name a few - can only effectively be dealt with a regional or even global level. Our methods give us a rules based system through which we can effectively find solutions to shared problems - they are not imposed by a dominant power on its neighbours.

Coming from a small country only 16 years into freedom from authoritarianism, you will understand that I prefer the democratic approach. But I also believe that solutions reached by consent after transparent discussion will be more stable and effective than solutions imposed, whether via the authoritarian capitalism of China or Russia or the exercise of western "hard†power.

50 years after the signature of the Rome Treaty, it is clear that Europe and the world have benefited greatly from the EU. We should not take the peace and prosperity it has delivered for granted, but instead work to ensure its next 50 years are as successful.