CONSERVATIVE MEP FOR SCOTLAND

Report - How Can Regional Governments Become More Engaged with the EU?

19.11.2014.

Introduction

On 6th November 2014 in the European Parliament in Brussels, Ian Duncan, the Conservative MEP for Scotland, brought together a group of speakers from different political and regional backgrounds to discuss how regional Governments of the EU can become more engaged with the EU and its institutions.  The discussion took place against the backdrop of the recent Scottish Independence Referendum and in advance of the Catalan 'public participatory process'. The speakers - from Flanders, Catalonia, Hamburg and Scotland - were asked to bring forward their insights of sub-national and inter-governmental politics within an EU framework.

The speakers:

Ian Duncan MEP, Scottish Conservative & Unionist Party. Ian Duncan is an MEP for Scotland.  Prior to election Ian was Head of the Scottish Parliament's EU Office, based in Brussels.  Before this, Ian worked for Scottish Fishermen, and was an analyst for BP. In the European Parliament the Conservatives sit within the ECR group.

Mark Demesmaeker MEP, Nieuw-Vlaamse Alliantie (New Flemish Alliance).  Mark Demesmaeker is an MEP for the Dutch-speaking electoral college in Belgium and his party sits with the European & Conservative & Reformist (ECR) Group. His party campaigns for Flemish independence and is currently the largest party in the Belgium Federal Parliament and the Flemish Parliament. Mark was formerly an MP in the Flemish Parliament

Hans-Olaf Henkel MEP, Alternative für Deutschland (Alternative for Germany). Hans-Olaf Henkel is an MEP for the European Parliament constituency of Germany and his party also sits with the ECR Group. From 1995 to 2000 he was president of the German Industry Federation, having previously been CEO of IBM Europe, Middle-East and Africa.

Stephen Gethins, Scottish National Party.  Stephen Gethins was a special advisor to Scotland's First Minister Alex Salmond on European and International affairs. Prior to this he was an adviser in the Committee of the Regions and a consultant with Brussels-based Scotland Europa, an economic development body. Stephen was a candidate in the 2014 European Parliamentary elections. His party sits with the Greens-European Free Alliance Group.

Ramon Tremosa i Balcells MEP, Convergència Democràtica de Catalunya (Democratic Convergence of Catalonia).  Ramon Tremosa is an MEP for the European Parliament constituency of Spain. Before joining the Parliament he was a professor of Economics at the University of Barcelona. His party is part of the Convergència i Unió (Convergence and Union) alliance, which is the largest group in the Catalan Parliament. In the European Parliament they are part of the Alliance of Liberals and Democrats for Europe Group.

The contributions:

Mark Demesmaeker MEP Nieuw-Vlaamse Alliantie (New Flemish Alliance)

Demesmaeker began by stating that it was a mistake for Herman Van Rompuy (President of the European Council) to say that democracy cannot be used to change borders. In the light of the Scottish referendum, Mark argued that these comments were quite inappropriate.

He explained that Ministers from Belgium’s federated states are able to represent their state in the Council of Ministers on issues that affect them directly. This arrangement is fairly unique in that on some occasions, the national Minister is superseded by the Minister of the sub-national entity. This is due to the fact that some issues are better represented regionally than nationally on a European level.

All agreements regarding the representation of Belgium to the Council are laid down in an internal Belgian cooperation agreement. This ensures that the Belgian position reflects its federated states, which is why Flanders has representation within the Permanent Representation of Belgium to the European Union. 

Demesmaeker suggests that regional level discussions within the EU, is the way forward and that by “cutting the cord” between the EU and Member States, the EU will become closer to the regions, which will be both more efficient and democratic.

According to Demesmaeker, the Flemish separatist movement arose not due to malaise between the Flemish and Walloons but due to the fact they are culturally, linguistically and politically different communities. Originally, the Flemish language and identity was suppressed on a national level and although the Belgian evolution into a federal country addressed this to some extent, it is not the most practical solution. Demesmaeker would therefore be keen to see a strong, independent Flanders in a strong confederated EU.

Hans-Olaf Henkel MEP Alternative für Deutschland (Alternative for Germany)

Henkel started his talk by saying that in Germany some people identify themselves more with their Länder than with their county.  Germany is also represented by its subnational Ministers similarly to how the Belgians are. This is strongly reflected by the palatial building of Representation of the Free State of Bavaria to the European Union, which is located right next to the European Parliament.

Germany’s federal structure came from its constitution, which was drawn up under Allied occupied Western Germany and was designed to prevent the national level of government from having too much power. This explains the high level of devolution to the devolved Länder, however they still have little power over tax.

This arrangement of centralised taxation has resulted in little economic accountability from the Länder governments, which now sees 3 of the 16 Länder as net contributors to the federal budget with the remaining as net recipients. This neither provides recipients nor contributors with an incentive to save, as those running deficits are subsidised, whilst those running a budget surplus are punished.

Henkel reflected on his experiences managing a large multinational organisation. A large company with many profit centres is more efficient, innovative and closer to its customer base than a company that is centrally operated. This principle can be transferred to federal Länder or the EU. Federal countries such as Switzerland, Canada and the US have largely devolved taxes, which leads to more competitive economies, fiscal responsibility and lower taxation. 

In response to 'how do we make Europe more competitive?' His answer was to create competition, but in putting all our resources into saving the Euro we have replaced: competition with harmonisation; diversity with uniformity; and self-responsibility with socialisation.

All these have caused more damage than good to the EU. For example, in an attempt to force through an optimal currency zone across the Eurozone to save the currency; tax systems have had to be harmonised, which has resulted in sacrificing tax competition and fiscal responsibility.

To resolve this, maximum responsibility should be devolved to sub-national levels (or further i.e. education) and as little as possible to the national or supranational level.

When asked about which competencies should remain on an EU level opposed to Member States or sub-national governments, his answer was for those competencies of a more practical nature. This included completion of the Common Market, negotiations for TTIP, a single air traffic system and energy cooperation.

Stephen Gethins Scottish National Party

Gethins pointed out that Scotland’s devolved powers within the United Kingdom, such as fisheries, agriculture and climate change also happen to be major areas of competencies in the European Union. For many issues in Britain, the UK Minister acts effectively only as a Minister for England and therefore it makes little sense for that Minister to represent the UK as a whole in the EU Council of Ministers.

There have been times when EU policy, such as on fishing, has been determined largely by Ministers from many EU countries that have little economic interest in that policy. Yet despite Scotland having no say in these discussions, the Scottish Ministers are forced to implement that policy domestically under EU rules.

This demonstrates the fact that European Union’s Member State focus is inflexible and out of date. The EU constantly talks about engaging with its citizens but as established; fails to do so.

According to Gethins, if the UK leaves the EU, then the EU would lose in Scotland a country that is pro-European and one that is a major resource in terms of renewable energy, hydrocarbons, agriculture and fisheries. Subsequently, if the UK were to leave the EU by purely English votes, then there would be another constitutional crisis.

Ramon Tremosa i Balcells MEP Convergència Democràtica de Catalunya (Democratic Convergence of Catalonia)

Ramon Tremosa started by defining what makes a federal country. He stated that a federal country is one where the majority of taxes are raised and spent on a state level opposed to centrally. From this, taxes can be transferred horizontally or vertically as required.

His party campaigned to change Spain into a federal country for over 20 years but by failing to achieve constitutional change; it moved its stance over the last three years from wanting greater regional autonomy to full independence. He explained that this is further reinforced by the fact that Central and other regional governments have been far less fiscally responsible than Catalonia and subsequently have used the constitution as a tool to prevent a democratic vote on independence.

Commenting on the lessons that Scotland can learn for its devolution talks: if it wants meaningful autonomy, it need real tax and spending powers.

In regards to Catalonia’s relationship with the EU, the nation is pro-European particularly with the large foreign investment it receives and quantity of goods and services that it exports. As an open economy, Catalonia needs to represent itself on an EU and international level.

Tremosa highlighted the EU obsession with operating on a Member State level by the fact that despite having 9 million speakers, Catalan is banned from being used by Catalan MEPs in the European Union yet Irish Gaelic is an official language with only tens of thousands of speakers. It is for this reason that he chooses to use English in the European Parliament as a form of protest instead of Spanish.

 

Conclusions

The Scottish referendum and the 'popular participatory process' in Catalonia have awakened interest in both the role of the EU as regards 'internal' constitutional matters, and the role of sub-state nations and regions in EU decision making .  The purpose of this event was to focus upon the latter. Many common themes emerged from the conference, notable amongst them the lack of regional engagement by the EU and the problems of democratic accountability that this can create.

It is apparent that for Member States with devolved administrations, there tends to be a greater desire to voice the regional dimensions within the EU. Where such voices are incorporated within the Member State negotiating team (either as contribution to the final position; or through participation) then the democratic accountability of the Ministers participating both at member state and regional level is improved, as is the democratic underpinnings of the EU Union itself.

It was recognised, however, that there is no common model of devolution across the EU, nor is there common agreement on the EU competencies which enjoy such devolution.

It was noted that the Belgian system of representation may be a potential solution. In Belgium, if a particular theme of importance to a specific region is being discussed at Council, then the relevant representative of that region sits alongside the National representative in a joint representation (although it was conceded that in Belgium the regions were comparable in size and population). It is thought that this system is unique, but that it works well and can help foster relations between central and devolved government.  It was noted, however, that unless a coherent negotiating position is in place before the meeting then the position may become weakened.  Similarly, it was noted that a codified system of 'which region sits in on which theme' must be agreed internally to avoid internecine disputes.

It was evident that any move towards further centralised decision making within the EU would result in policies which are a poor fit at a Member State level, and run the risk of creating a similarly poor fit at a regional level.  The beating heart of the European Union must be subsidiarity: decisions must be taken at the most appropriate level of governance.  It is also clear that given the various models of devolution currently enjoyed across the EU, it should be for the member state, in discussion with said devolved assemblies/parliaments, to address the subsidiarity question.

Regional autonomy will result in taxation, spending and law making that suit regional populations and by having these decisions taken as close as possible to the people they effect; they become more democratic and more efficient.

If the EU chose to focus on fewer, more practical policies areas it could become not only more dynamic and effective but more transparent too. In this sense, the EU’s objective of closer political integration has denied its economic potential.

The lessons for Scotland

What lessons can Scotland learn from other regions and nations of the EU?  It is clear from the referendum in Scotland that the status quo is no longer satisfactory. As Ramon Tremosa explained; for Scotland to have effective fiscal autonomy it needs real tax and spending powers as well as the ability to make the decisions that affect Scottish people.   

Scotland's referendum result made clear that it is possible for citizens to hold both regional and national affinities (to be Scottish and British).  However, it was also evident that the people of Scotland wanted change and that the existing model was no longer satisfactory to all.  The Smith Commission, tasked with delivering against this objective, therefore has a challenge on its hand.  What further powers should be devolved? In what form should these powers be packaged?  How can the other constituent members of the UK also benefit from such reform, particularly since they are behind the curve when it comes to the devolution debate? Simply put, what can best be done in London, and what should be devolved to the regional capitals?

The Smith Commission must also address how Scotland should engage with the international community. These conclusions do not just have an impact for Scotland but for the UK as a whole.

Video of the Event - http://eventstream.streamovations.be/save-the-date.php

With thanks to Josh Tankard of the Scottish Conservative PRU