Outcry in Brussels. Just when the continent was about to see the light at the end of the tunnel, right after the Council reached an historic agreement with the Parliament on the Rule of Law Mechanism, two Member States tear back the EU into an (equally) historic crisis by blocking the (no less) historic budget and recovery fund to save Europe from the worse crisis in its recent history. Who dares? Naturally Hungary and Poland, who else could have committed such a felony? What are those notoriously Eurosceptic countries still doing in the European Union?
Apologies for the sarcasm but it somehow summarises the tone and the mood of key EU players, opinion makers, officials and the majority of the media at the veto issued by Orban and Morawiecki on the EU budget (the Multi Annual Financial Framework, in EU’s jargon) and by extension, to the EU Recovery Fund. Like all caricatures, there is some truth in it. There is even a lot.
The EU (and the world in general) is facing the worst economic crisis since the Second World War and the European leaders agreed, in record time, upon an unprecedented financial package that is likely to put the EU back on tracks and that is badly needed by some Member States. It is indeed a breakthrough, an historical compromise on which leaders with different agendas gave their green light with a rare sense of urgency. Hence the frustration and anger at a veto that came when the clock of the budget was ticking (it had to be adopted by the 1st of January 2021). The EU was holding its breath.
But it is equally true that this short-sighted approach must be put into perspective, for at least two reasons. First, because unanimity is a classic, if not banal voting mechanism in the EU’s catalogue of decision making process. Second, because some of the criticism raised at Hungary and Poland suggest sotto voce that some vetoes are more legitimate than others. Depending on the countries exercising this right. And this is one step too close from declaring who are the good Europeans and who are the bad ones. Actually, a brief look at the EU’s old and recent history shows that unanimity has been widely used by Member states, including on key political files and Treaty reforms, without triggering the same outcry.
Like it or not, unanimity is the second most common voting mechanism and this is not anodyne. If we think of the EU as an historical attempt to prevent big fishes from devouring small ones and to neutralize hegemonic temptations, then no surprise that unanimity remains the most appropriate manner to take decisions on sensitive matters. Some portray it as obsolete and inapplicable in an enlarged EU. Some other claim it is anti-european by nature as it prevents further integration and should disappear from the Treaties. Few see it as a mechanism that improves Member states ‘trust in the EU by preventing a country from being outvoted where its core national interest is at stake. Combined with other voting methods, unanimity is necessary to strike the right balance between the essential interests of Member States and the no less necessary qualified majority mechanism. It is a core-tenet of the EU’s architecture and should be seen as a fully fledged part of it, not as a selfish, outdated method to sabotage the EU from reaching higher goals…that should in the first place consensually shared by countries and citizens. If pragmatism still has a meaning in the European Union, then punctual unanimity is one of its finest expressions.
The list of stalemates, crisis and individual accommodations among Member states is as large and old as the EU itself. There is nothing new about it, except that the four weeks veto of Hungary and Poland seems a minor incident in the light of EU’s history. France started the tradition by rejecting the famous Plan Pleven establishing an embryonic cooperation on defense in…1954, before the European Economic Community was even founded! It went on with another coup d’éclat in 1966. For several months, French representatives simply did not show up to any meeting thereby blocking the European Economic Community until the other Members understood that unanimity is more than a written rule: it is actually a gentlemen’s agreement, an implicit resort when the national interests are at stake. In 1994, the Southern Member States realised they would not be able to build a blocking minority according to the new voting rules and felt they would no longer a have a decisive say on the allocation of European funds. They pushed and obtained the so-called Ioannina compromise (after the Greek name where the European Council took place) to ensure that some decisions taken by qualified majority will be reverted to the European Council upon request. Does that ring a bell?
Speaking about historic crisis, the negotiations of the Treaties reforms often led the EU to the edge of the cliff and ended up with exceptional compromises. In order to keep the Treaty of Maastricht alive after a negative referendum, the EU accepted a permanent opt-out for Denmark on all justice and home affairs matters that is still in force. As we speak, crucial EU policies simply do not apply to this country. In 1997, when the Treaty of Amsterdam incorporated the Schengen agreement, Ireland and the United Kingdom negotiated a general opt-out and the possibility to participate on a case-by-case basis, if they so wished. In 2001, the Irish voters rejected the Treaty of Nice to vote again one year later and eventually approve the reform that paved the way to the grand enlargement in 2004. Again, in 2008, Ireland rejected the Treaty of Lisbon agreed upon to solve the melodrama of the European Constitution turned down by the French and Dutch voters. A stalemate on a stalemate! To secure a positive result in a second referendum, the European Council Ireland tailor made guarantees on the appointment of an Irish Commissioner, neutrality in defense matters, and autonomy in fiscal and family matters. Does that right a bell?
Strategic policies are no exception to unanimity and long-standing blockades. For decades, Luxemburg vetoed attempts to establish a European tax policy although this lack of basic harmonization led to unbalances within the internal market and fiscal dumping. As a result, Luxemburg free-rode on its neighbours (through legal yet unfair fiscal schemes) allowing tax avoidance and fiscal dumping. Under France’s pressure, the Commission proposed a “Google Tax” to ensure that the big techs companies will pay their share. Yet, this initiative to fight tax avoidance and force big firms to pay taxes where they generate revenues has been vetoed in 2019…by whom? Denmark, Sweden and Finland, led by Ireland.
Trade agreements are also subject to vetoes despite (or rather because of?) their strategic importance. For decades, France conditioned trade negotiations to defend l’exception culturelle and exclude the cultural sector from free trade agreements. France vetoed the opening of the TTIP negotiations (the major trade agreement with the US, later aborted) until the EU Ministers accepted to exclude the audiovisual industry from the scope of the negotiations. In 2016, Belgium, or to be more precise, the region of Wallonia prevented the entry into force of the agreement between the EU and Canada. The Walloon Parliament blocked an agreement already accepted by all the Member States and the European Parliament. The European Council and the Commission eventually negotiated a way out a couple of weeks after. Does that right a bell?
Unanimity is the bread and butter of the EU’s Foreign Policy and Enlargement. Member States do not shy away from using it. For two decades, Greece blocked the European ambitions of Northern Macedonia on the conflict over its name and recently France vetoed the opening of the talks with the latter and Albania thus ruining years of negotiations and triggering vast resentment and frustration in the Balkans. Most recently, Greece and Cyprus vetoed discussions on Belarus unless a point on Turkey was added to the Council’s agenda.
Finally, I conclude this non-exhaustive list with an example that goes beyond the scope of this article but tells a lot about the political reality of vetoes in the European Union, even when they contradict European law. Before the historic agreement of mid-June, the Eurozone was in turmoil and could only rely on the European Central Bank’s firepower to avoid an unprecedented economic upheaval. And yet, on 5 May 2020, the German Constitutional Court openly questioned the legality of the quantitative easing program and requested further explanations from the European Central Bank before ruling on the legality of this safety vest in the light of... German law. The Court took a blatant approach to one of the most important (yet controversial) dogmas of European law, its primacy over national legislation. The Union underwent a ruthless setback at the worst possible moment. A fatal threat that was only defused by the historic agreement on the mutualisation of debt adopted one month later.
They did so to preserve what in their view is the most important point of the MFF agreement and precisely the one overturned by the European Parliament in November after the European Council agreed upon it in June. By reopening the negotiations, the Parliament did no more no less than making use of its prerogatives. As much as Hungary and Poland did putting a veto. To unlock the stalemate, the German Presidency took the lead and found a satisfactory compromise to all parts in less than a month. Much ado about nothing? In the light of the Union’s records, it was more an incident than an existential crisis.
Two conclusions must be drawn. The first is that the media and political noise left the bitter impression that EU rules are more or less acceptable depending on the countries using them. Luxembourg, Denmark, the Netherlands or Ireland (just to name a few) blocked Treaty reforms and key files and obtained considerable opt-outs without being named and shamed as europhobics. Fair enough, but even fairer if all the Member States could enjoy the same equity and weighting.
The second is that we must accept the rules of the game, all the rules of the game. Including unanimity, a mechanism that forms an integral part of the European legal and political landscape and that is meant to last. Too often, too quickly, some set the anathema on it as it would prevent the Union from moving at the pace and direction they wished. I beg to disagree. By allowing Member States to protect their strategic interests as a last resort, unanimity strengthens the Union more than it weakens it. In an organization that is not and would probably never be a federation, qualified majority only is no more viable than unanimity only. There is wisdom in the current “in-between” and moving away from it would undermine the internal cohesion of a Union, which cannot afford the luxury of further fragmentation.
To decide on major steps, the EU’s legitimacy depends on the support and agreement of all its Member states and the deal on the most ambitious financial package ever put on the table is definitely one of them. Less outcry, more pragmatism; in the EU, the art of the veto is a fully-fledged part of the art of the deal.
The author is an expert of international law and Leader of MCC Center for Diplomacy.