Which government for Europe? Some reflections on the idea of limited government

Richard Laming

By Richard Laming

In the discussion about the future government of Europe, I want to offer a few remarks not on what the EU should do, but on what it should not do. I think that this is just as important a question. This is for two reasons:

(1) as a pro-European, I am worried that the popularity of the European project is being undermined by the sense that decisions are being taken in Brussels that do not belong there, contrary to our promise that federalism means limited government,

(2) as a federalist, I think that powers should be exercised at the lowest possible level, and only centralised if necessary.

For these two reasons, the limits to the powers of the EU institutions are important.

These powers are formally laid out in the treaties. Since the first treaty, successive treaties have enlarged these powers. The Lisbon treaty was supposed to clarify them, but it did so only to a modest degree. Even if the treaty comes into force, there will remain some uncertainty and debate about the extent of the competences of the EU; and the position will of course continue to be worse than that should the Lisbon treaty not be ratified at all.

The ostensible basis upon which powers have been attributed to the EU level has been the principle of subsidiarity, namely as much as decentralisation as possible, as much centralisation as necessary. The word “subsidiarity” first entered the treaties at Maastricht, but has been implicit in the idea of federalism from the beginning. For example, the objectives of Federal Union adopted on 4 October 1939 were “a common government elected by and responsible to the people for their common affairs, with national self-government for national affairs”.

However, principle of subsidiarity is not a legal one but a political one – it is not an unambiguous guide to how the allocations will be made. In that sense, it is a term of the same quality as “democracy” or “human rights”. There is widespread agreement on the merits and outlines of the term, but there is much argument over exactly how to interpret it in any given situation.

The Lisbon treaty also invokes the principle of proportionality, but that is less interesting here. Legislative or executive acts that do not respect proportionality are the feature of government as a whole: here, I want to focus on the challenges posed to federal government, that is multi-level government.

Why should Europe act?

Although I want to talk about occasions when the EU should not act, I should first outline the reasons why on other occasions it should. Here are five reasons:

(1) Issues that by their very nature cannot be dealt with by a member state on its own, e.g. creating the single market

(2) Where there are specific cross-border implications, e.g. mobile phone roaming charges

(3) Where there are substantial spillover effects from a policy carried out in a single member state, e.g. the excessive deficit procedure

(4) Where the costs of a policy are too great for a single member state to bear, e.g. Galileo

(5) Where national policies gain additional effectiveness through being shared, e.g. foreign policy

All of these, particularly reason (4), depend on there being a significant common interest between the member states. In principle, an individual EU member state could have agreed a set of treaties like those of the EU with any group of 26 others democracies: in practice, each has only chosen to do so within Europe because that is where the common interests lie. But, going back to the principle of subsidiarity, having a common interest is not sufficient: it must also be necessary to act in common.

I now want to outline two examples of Europe acting when, arguably, it should not, and to discuss the underlying causes of that action.

Road traffic safety

A notable causus belli for opponents of the EU in the UK was a directive (2003/20/EC) requiring children in the back seats of cars to sit on booster seats. Specifically, the law requires children under the age of 12 and less than 135 cm in height to sit on booster seats when travelling in the back of a car. (There are some exceptions for unexpected and urgent journeys, and a few other reasons like that.) The reason behind the law is that seatbelts fitted in cars – itself a mandatory requirement – are designed for adults and not children. Children, being smaller and still growing, need a different kind of protection, which the new booster seats are intended to provide.

Now, the aim of reducing road accidents is not controversial, but why should it be a reason for Europe to act?

At present, road safety is a shared competence. In the Amsterdam treaty, there are EU competences to promote transport safety (article 71 of EU Treaty) and to deliver a high level of protection in the harmonisation process (article 95). This makes sense in the light of a growing level of cross-border transport flows and infrastructure planning, and the need to make any new vehicle standards consistent with the single market.

The European Commission has specifically looked at the reasons for European action, looking at the grounds for pursuing its Road Safety Action Program. A central argument for there being “European Added Value” is that the European Commission’s target for accident reduction is tougher than that previously set in some member states, and that all should be pushed in this direction.

Is it the task of the Commission to push member states in this way? Targets themselves are controversial: a reduction in road accidents does not come “free” and there are costs that have to be borne somewhere. What is the reason why the decision about incurring these costs should be a European decision and not left to the member states to decide for themselves?

Reports published for the European Commission, such as the Impact Assessment Road Safety Action Programme, Assessment for mid term review, 15 April 2005, propose that:

Target setting is a valuable mean to get traffic safety on the political agenda and to monitor the progress that is made. Behind the targets set by the different countries, differences exist in vision regarding road safety … In some countries there is a lack of political will to accord road safety a high priority.

This added value exists of … Pressure on national governments to put road safety on the political agenda.

Harmonisation of legislation might increase the credibility of the legislation;

What this means is that the European Commission is aware that its policies are controversial, but that it intends to fight for them nevertheless. There are two alternative causes of this controversy:

(1) that the European Commission has a policy which it seeks to impose on reluctant member states, or

(2) that the member state governments themselves support the policy but cannot impose it on their own countries.

Is it grounds for European action either that national politicians have chosen not to do something, or that national democracy prevents national politicians from doing something they might otherwise like to do?

The five reasons I gave earlier are reasons why, in principle, member states cannot act alone. They do not include the reason that member states have chosen, in practice, not to act.

I would like to float the argument that it is not the job of the European Union to rescue member states from their own failings. In this line of thinking, the role of the EU is rather to protect member states from each other’s failings, but that is all.

Access to medical training

A second interesting area where European integration is influencing what has otherwise and previously been national policy is the access by students to medical school. In some EU member states, notably Austria and Belgium, quotas have been introduced to guarantee places for residents who wish to study medicine. In Austria, there is a 25 per cent limit on foreign medical students.

The aim is to restrict the number of foreigners who take up the places to study medicine but who then leave the country rather than continuing to practise medicine there. Of the German doctors who train in Austria, 90 per cent return home. A medical training is not just an education but also the gateway to a medical career: member states fund medical training because they need trained doctors.

In general, the principles of the single market have come to apply to most areas of public sector activity. Substantial acts of public procurement have to be advertised widely and are open to tender from anywhere within the EU. The case of Nicolas Decker, a Luxembourg national who wished to buy glasses in Belgium, established that the commercial aspects of social security systems also had to conform to the single market principles of free movement, social security being otherwise a national competence.

When it comes to charging university tuition fees, it is in general not permissible to charge higher fees to EU non-nationals as well as nationals. This produces, in the UK at least, some very strange results. English universities charge a fee of GBP 3,145 is charged to all EEA students, whereas in Scotland places are free to Scottish and non-UK EU students, but GBP £1,775 is charged to students from England, Wales and Northern Ireland. (Higher education is a devolved matter in Scotland.)

The underlying principle of the single market is that national governments may not intervene in commercial activity on account of national borders. This has been understood since, for example, Lionel Robbins’ “Economic planning and international order”, published in 1937. Questions such as public procurement and the Decker case have pushed the definition of commercial activity further into the activities of government.

But there are other functions of national government that remain outside this single market principle, in order to preserve the notion of national government at all. The provision of higher education, for example, is not a European competence, but a member state one at most (in some countries, it is regional).

I want to float the argument that applying the single market principle to university places goes too far.

The limitation on the provision of university places arises from the budgets of the member states: in the case of Austrian medical training, the places are heavily subsidised. (The tuition fee charged to Austrian students and EU or EEA citizens is EUR 363.36 per semester.)

Commercial businesses faced with excess of demand can either put up prices or increase capacity. A public university can do neither.

Medical training is funded by Austrian taxpayers as part of an ecosystem of taxation, welfare spending, and a wider social infrastructure. It is not a commercial activity but is part of the non-commercial world of public activity. Exposing it to the rules of the single market is effectively to take a step further forward in the commercialisation of public activity. (We see a similar phenomenon in the introduction of competition into former state monopolies such as the postal service.)

There is no discrimination in the Austrian system, in that eligibility for the quota is based on residency, not citizenship (the peculiar fee structure in the United Kingdom is similarly based on residence). Universities and higher education depend fundamentally on the free movement of scholars and ideas – this is not an argument for absolute prohibitions on foreign students – and there are schemes such as ERASMUS to make this possible.

It would be entirely possible to solve the problem by creating a European system of funding and allocating places for higher education, on the grounds that the free movement of students was more important that national diversity higher education. But I think it would create another, and more serious, problem in terms of public opinion.

And where would it leave our idea of federalism meaning limited government?

Based on a talk given at the Ventotene seminar, 30 August 2008. Richard Laming is Director of Federal Union and may be contacted at richard@richardlaming.com. The opinions expressed are those of the author and not necessarily those of Federal Union.

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