The Perils of Technocracy and the Future of European Integration

Daniela Schwarzer

The current crisis in the euro area, the reforms governments have to implement, and the high unemployment levels in many member states are weakening the legitimacy of European integration. In my last post, I described how this output legitimacy crisis unfolds.

The debate about legitimacy and democratization in the EU traditionally focuses on the input side. As crises have surfaced, the flaws in the governance structures have also fuelled this old debate. In fact, it can hardly be argued that citizens have the chance to effectively influence the developments that deeply affect them, given the national fragmentation of decision-making and the resulting hazardous nature of macro-economic developments.

The EU’s reaction to the sovereign debt crisis moreover entails two challenges to the input legitimacy of European integration. The first one is that many crisis management and integration decisions have been taken “at gun point”. Political leaders communicated to their constituencies that “there was no alternative” but to do exactly this. All too often in the first phase of the crisis, when important steps were taken with regard to setting up cross-border financial aid mechanisms, the self-interest of the donor states in ensuring financial stability was not sufficiently explained. So, not only in the recipient countries, but also in the donor countries, legitimacy was undermined. Not only has the European integration project lost support, citizens have also started to lose trust in national and European elites and institutions.

Second, in a reaction to the crisis, member governments have reinforced the rule-based, technocratic coordination of both fiscal and economic policies. It is now easier, upon recommendation of the European Commission, to interfere with domestic policy choices and to sanction members financially if they do not comply with European targets.

One of the problems for the democratic quality of decision-making under this set-up is that the rules-based approach considerably limits democratic policy choices in the member states. If economic and fiscal policy choices are imposed by unelected bodies outside public accountability, national democracies give up part of their core business. In particular if the rules-based governance framework does not deliver sound macroeconomic output, this will intensify the problems of legitimacy on the national and the European level. The attempt to depoliticise fiscal and economic policies and to technically regulate them on the supranational level is likely to backfire.

So it is a conceivable scenario that a newly elected government does not respect the rules set by “Brussels,” and justifies this on the grounds of democratic legitimacy. This would then challenge the legitimacy of the EU: member states which actually abide by the rules and take financial risks in the European rescue mechanisms are likely to judge the economic governance illegitimate if not all parties play by the rules.

The problem of technocratic intervention is particularly important for member states that are receiving European and IMF financial aid. Countries that live under the tight surveillance and control of the so-called “Troika”: (the IMF, the European Commission, and the European Central Bank) experience that the population’s say over economic decisions is literally null. While this should be a transitory phase, the situation may further undermine the EU’s legitimacy in the eyes of the citizens.

These developments have led to a new debate in Europe. For some time now, several pillars of future European integration have been discussed in parallel: Banking Union, Fiscal Union and something called “Political Union”. In particular, the debate on the latter pillar has stalled for some time. This is not entirely surprising: political integration, including a stronger democratization of the EU system, comes at a price for national decision-makers. Political leadership from the national capitals on this issue is currently weak. This will have to change if European integration is to be made sustainable in the long-term.

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