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The EU’s £1.7 billion Demand: is the Democratic Deficit Becoming Worse?

About The Author

Georgia Mitchell (Writer)

Georgia is in her second year of Law at Newcastle University. She is currently pursuing a career as a commercial solicitor, and hopes to work abroad within the EU at some point in her future career. Outside of her studies, Georgia is an avid tennis fan.

The United Kingdom is currently facing an unexpected European Union (“EU”) demand for an extra £1.7 billion towards the EU budget. The demand, which would add almost a fifth to the UK's annual contribution of £8.6 billion, is intended to reflect the improvements to the UK's economy since the figures were last calculated. David Cameron has previously signed a declaration agreeing to provide the EU with UK’s economic recovery statistics, presumably in the hope of promulgating their chances of re-election. With each Member States’ (“MS”) financial contribution being revised, there is, accordingly, a new bill for every MS.

This financial demand demonstrates one example of the lack of democracy within the EU, as there was no vote to decide directly what would happen within individual countries. Although both the European Parliament and the Council of the EU help set the EU budget and their members are elected, the decisions which occur surrounding the EU budget remain convoluted and done without any direct public opinion being considered. A referendum for all EU citizens held on the imposition of the £1.7 billion bill would certainly not be viable. Nevertheless, a vote being held domestically in each member state (whereby each member of the government can vote on the matter at hand, as they do for domestic matters) could potentially work better and provide the public with a more direct, domestic representation.

Decisions of significant impact necessitate a direct public vote, made through locally elected politicians, to ensure complete democracy. The democratic legitimacy of decision-making within the EU has been subject to debate for years, especially following the creation of the Maastricht Treaty. In what has become something of a pattern in Europe, most EU citizens were not asked whether they accepted the Maastricth Treaty; most EU citizens did not formally agree that they wanted to accede to monetary union in the form of the euro (€).

This article will discuss the existing democratic deficit within the EU and whether the recent £1.7 billion EU demand is yet another damaging blow to UK-EU relations.

Is there a democratic deficit?

It is a fundamental feature of a democratic system that citizens can vote and change their government if they so desire; yet the composition and function of the legislative procedure of the European Union does not assimilate to this understanding. The following analysis of the European Parliament, the European Commission and the Council of Ministers will demonstrate the EU’s democratic deficit.

The European Parliament

The European Parliament (“EP”) is the only directly elected institution involved in the EU policy-making. Its main functions include legislative power (which they share with the Council through the ordinary legislative process), budgetary power (deciding the annual EU budget with the Council) and powers of control over the Union’s institutions (in particular, the Commission). While it should be noted that Article 14 of the Lisbon Treaty increased EP’s relevance (the now has a joint say on the creation and implementation of approximately 80% of EU legislation and can now also veto at least 60% of laws), the EP still remains a mere part of the EU legislature. This renders citizens’ votes for the composition of the EP futile, as any resulting changes rarely lead to major shifts in the EU policy. Additionally, whilst elections for Members of the European Parliament are held every five years, many of the electorate, especially those in the UK, choose not to vote. The EP elections are thus decentralised and apathetic affairs that only appeal to an unsatisfactory number of voters who select a party on the basis of national issues. For example, there was only a 43.09% turnout in the 2014 EP elections. These statistics question the overall effectiveness of the Lisbon Treaty’s amendments. In blunt terms, the EP is subject to multiple afflictions: its own limited powers; a chronic absence of motivation within the electorate; and the crucial absence of a mature party system across the EU. Unlike within the MS, in the EP no particular party represents the EU itself, with the European parties being a mere mix of national parties, which makes it harder for the public to relate to the EU through its political system. It is alarming that while the EP constitutes the only directly elected manifestation of the EU project, it has virtually no real control over legislating. Even after the Lisbon Treaty, it remains a singularly constrained legal entity.

The European Commission

One further, notable amendment that resulted from the Lisbon Treaty allowed for the leader of the majority party in the EP to become the President of the European Commission. Since the Maastricht Treaty came into force, the nomination of the President of the European Commission has been aligned with the elections of the EP. The Commission President is elected for a renewable five-year term starting six months after the EP elections. One of the first major tasks of the EP at the start of its term is therefore to approve the candidate for Presidency at the Commission put forward by the heads of state and government in the European Council. Before the Lisbon Treaty the Council nominated the President which was then approved by Parliament. Now taking into account the elections to the EP and after several consultations, the Council shall propose Presidential candidates (inclusive of whosoever is the leader of the majority party in the EP) to the EP. This candidate is then elected by the EP majority. This development is undeniably a beneficial step in remedying the democratic deficit due to the elected EP determining the President of the European Commission.

However, the complex committee structure known as ‘comitology’ has been used as a way of increasing democratic procedures in EU decisions. However, comitology has been subject to extensive criticism. The relationship between the Commission and the committees are based on examples set out in the Council Comitology Decision (“the Decision”). The Decision introduced a new way of exercising implementing powers: the regulatory procedure with scrutiny. The committees, whose task it is to assist the Community institutions, are involved at all stages of the legislative process. The Commission regularly consults committees of experts before proposing new legislation. These committees, which are made up of representatives of each MS, ensure that the Commission remains open to the concerns of those who will be affected by the legislation.

The Council of Ministers

Finally, the position of the Council of Ministers in Europe represents another failure of the EU to effectively represent national parliaments. The Council of Ministers are supposed to represent the Member States’ wishes. There is a transfer of competence from states to the EU; the European Council (heads of state) set general policy goals and the Council of Ministers (members of government) has final say on legislation. This is an evident shift of power from national parliaments to national governments whose members are not directly elected for that purpose.

Consequently, the national parliamentary bodies were deprived of any genuine control over EU decision making; both the European Council and Council of Ministers generally fail to represent their national parliaments, which is indicative of the reality that the EP is still not the ‘central actor’, even following the Lisbon amendments.

The dominance of these two institutions in the decision-making process causes difficulty for national parliamentary bodies aiming to exercise genuine control over EU decisions. Democratic constitutionalism has traditionally insisted that the executive should not be awarded any law-making powers due to its indirect democratic characteristics; members of the commission are not directly elected and therefore it is said that the EP should be the only body to create legislation to achieve full democracy. However, as mentioned by Catherine Barnard and Steve Peers, with the expansion of an ‘administrative state’ in the twentieth century, executive law-making has evolved into a norm in many legal orders, including the EU.

The £1.7 Billion Demand and National Governments

The £1.7 billion demand was completely unexpected by the majority of the UK public. However, with David Cameron agreeing to deliver the UK’s financial recovery statistics, the volume of this demand was not completely unforeseeable for some. David Cameron has previously highlighted the absence of a relationship between national parliaments and the EP by stating that ‘it is national parliaments, which are, and will remain, the true source of real democratic legitimacy and accountability in the EU’. However, the Lisbon Treaty, which amends the Treaty on European Union (‘TEU’), granted national parliaments an enhanced role.

Article 12 TEU discusses the relationship between national parliaments and the EP as an ‘inter-parliamentary cooperation’. Protocol (No 1) TEU ensures that national parliaments must be more involved with issues and activities pertaining to the EU. Additionally, Protocol (No 2) TEU awards national parliaments with more power, as the European Commission (‘the Commission’) must demonstrate that it has a right to act. A national parliament can now object to legislative proposals delivered by the Commission if, on the basis of the subsidiarity principle, national parliaments are in a better position to act instead. The principle of subsidiarity aims at determining the level of intervention that is most relevant in the areas of competences shared between the EU and the Member States. This may concern action at European, national or local levels. Although this limits the EU dominance by returning the power back to national parliaments and admittedly addresses the issue of the theoretical distance between the voters and the EU’s functioning, the Commission merely has to review the proposal if one third of a national parliament objects. Ostensibly, national parliaments still do not possess enough power to completely strike out legislation and can be overridden by the EU institutions. It would appear that David Cameron is correct in postulating the policy ambition that ‘we need to have a bigger and more significant role for national parliaments’ to improve democratic accountability in the EU and improve the pressing issue of distance.

When David Cameron agreed to deliver the UK’s economic recovery statistics to the EU, the general public were not awarded the chance to contest this via a public vote. However, as previously mentioned a vote for all EU citizens held on the imposition of the £1.7 billion bill is unfeasible. However, this demand serves well in emphasising the well-recognised issue of distance between the EU and Member states. Having this issue highlighted once more in a headline issue may work well in addressing the problem and drawing a closer relationship between citizens and the international body in the future. Article 1 TEU states that decisions are to be made as openly and as closely as possible to citizens. It is essential to note that decisions of the EU will never be as close to voters as are those of Member States; the EU is supranational and therefore the issue of distance will forever be omnipresent. Furthermore, the issue of distance exacerbates the aforementioned apathy at the EU ballot box. With the popular perception of the European Parliament as a remote, inaccessible and irrelevant institution, the citizens’ views have traditionally been unrepresented in elections. The general consensus is that the majority of the EU electorate is unaware of the EU’s role and the functions it discharges. It is surely impossible to achieve a democratic state whilst the bulk of its population are ignorant of the EU’s purposes.

Leading Conservative politicians have condemned the Commission for the £1.7 billion demand. Tracey Crouch MP, said, as reported in the Guardian: ‘[y]ou should not punish countries that are working hard to recover from the great recession’. But it must be asked: who is responsible for this bill? The Conservatives ultimately agreed to the decision to deliver the UK’s economic recovery statistics; should the lack of democratic openness be attributed to our government?

Nevertheless, George Osborne has declared victory over the EU by achieving a 50% reduction to the UK's £1.7 billion budget bill. The UK will now pay £850million in two instalments in July and September next year. However, despite this reduction, the full £1.7 billion will eventually have to be paid. The remaining £850million will be included in the money normally payable as part of standard 2016 UK rebates: the UK will simply receive a reduced rebate figure. The UK will pay the £850m while not cashing the €1 billion rebate, suggesting that sleight-of-hand accounting was being used to mask the conclusion that the full amount demanded by Brussels would be paid.

Conclusion

Integration in Europe has not evolved in quite the way envisaged by many of the European Community’s (now known as the EU) founders. The belief that a collaborative European spirit would eventually emerge, based on shared perceptions of a common interest, has proved to be unduly optimistic. In stark contrast to this idealistic vision, there is today a growing doubt being cast over the EU and its veritable democratic deficit with the unaccountable nature of the supranational institutions accentuating the democratic failings. The demand for £1.7 billion, levied because of the success of the UK's economy, was pushing the UK closer towards leaving the EU; despite the requested financial sum now being halved, this, alongside the still existing democratic deficit, proves detrimental to the relationship between the UK and EU.

Further reading

Catherine Barnard and Steve Peers, ‘European Union Law’ (1st edn, OUP 2014) 85

Nicholas Watt & Rowena Mason, The Guardian, EU demand for extra £1.7bn from UK prompts emergency meeting

Open Europe blog, Britain’s £1.7bn budget bill: Who is to blame and what happens next?

The Economist, An ever-deeper democratic deficit

European Parliament, Legislative powers

Sir Robert Cooper, LSE Blogs, The European Union does not have a democratic deficit – it has a democratic surplus

Lauren Cerulus, BlogActiv EU, EP2014: Is 43.09% turnout truly an achievement?

Europa, Comitology

Peter Dominiczak, The Telegraph, George Osborne: Britain to pay half of disputed European Union £1.7billion bill

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Tagged: Constitution, European Union

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