Many in Britain will have welcomed the recent humiliation of the European Commission. Usually seen as embodying all that’s bad about the EU, it’s unelected, arrogant and provenly corrupt. The demise of the Santer Commission was thus for many good news. On the other hand, none of the Commissioners was found to have benefited financially from the numerous cases of fraud, irregularity and mismanagement within their departments. This in itself means it wasn’t like corruption scandals in many, if not all, the member states. One might wonder what drove the French Commissioner to do favours for her dentist, but then people in positions of power tend to do good turns for their chums. British quangos are stuffed full of the wives or associates of MPs, and the numerous special advisers with whom our Government chooses to surround itself certainly aren’t chosen by competition.
To understand what the problems facing the Commission are, one needs to ask what exactly it is for. At the end of World War Two, Western European countries, France and Germany in particular, came to realise that a new pattern of international relations, based on co-operation, should replace the one that had given rise to centuries of conflict. Once the notion of a Community responsible for implementing economic policy was decided on, the Commission was created to act as a kind of referee, dealing with issues that no member state wished to entrust to the others. Rather than risk any one member hogging the agenda, the Commission alone was given the right to initiate legislation. Rather than leave it up to individual countries to decide which EU legislation to implement, and thus allow them to shy away from implementing measures they opposed, the signatories of the 1958 Treaty of Rome gave the Commission both direct and indirect powers (and a Court to back them up). These included the right to pronounce on certain issues of competition policy such as mergers and state aid to industry. Finally, so that the whole project did not grind to a halt in bickering between members, the Commission was also entrusted with the task of acting as the ‘conscience’ of the EU, with finding compromises between the often conflicting interests of member states and with ensuring that the integration process maintained its momentum.
The Commission’s powers do not extend to actual legislation. It does not, indeed cannot, decide to ban the British sausage or to question the chocolateness of our chocolate. It is the member states who negotiate first, and then vote on, legislation in the Council of Ministers – on which they are all represented. Having proposed legislation, the Commission is responsible merely for enforcing, or trying to enforce, the decisions taken by the Council. Attempts to define chocolate in terms of its chocolate content – which created outrage in this country, where ‘chocolate’ is really nothing of the sort – were not a Commission-inspired plot to undermine ‘Britishness’, but an initiative undertaken by countries such as Belgium, whose chocolate-makers use large quantities of cocoa. It was a classic case of one country seeking to promote its own producers against its rivals’.
The scope and complexity of the Commission’s tasks have grown rapidly in recent years, particularly between the mid-Eighties and the early Nineties, during the Presidency of Jacques Delors. The single market initiative, designed to remove all barriers to trade between member states, was launched in 1985 and spawned a tremendous growth in legislation: 270 measures were included in the Commission’s initial proposal. Along with this the EC’s capacity to deal with economic disparities between its members was increased. The poorer members, anxious that their most efficient businesses might start migrating to some putative ‘core’ around the Rhine, demanded additional funds to ensure the ‘cohesion’ of EC economies. The Commission found itself responsible for managing these funds. As if this were not enough, the unexpected collapse of the Berlin Wall led not only to a need to provide aid to the countries of Central and Eastern Europe, but also to the opening of discussions concerning their eventual membership of the Union.
All this generated severe and unforeseen problems, particularly as Delors was interested in ‘building Europe’, not in making the Commission work efficiently – its workload, rather than how well the work was done, was taken as the measure of its standing. In the later years of Delors’s presidency, a growing realisation that the Commission was inefficient led to several programmes being launched with the aim of improving effectiveness and weeding out corruption. It was only under Santer, however, that the Commission wholeheartedly set about reforming its internal workings. His slogan was ‘do less better’. In fact, more than half the cases of maladministration pointed out in the recent report of the ‘wise men’ (a committee, comprising mostly auditors, appointed by the Parliament to investigate the Commission) refer to things that happened under Delors – yet he was not even questioned by its authors. Ultimately, of course, Santer’s initiatives failed and he, along with his Commission, was forced from office.
Mismanagement has also stemmed from the Commission’s lack of resources. It’s not the bloated bureaucratic structure that many in Britain believe it to be but, as these things go, pretty small, employing only twenty thousand staff. Of these, more than 10 per cent work for the translation service, which accounts for a third of the Commission’s budget. With more areas to manage and insufficient staff to manage them, corruption and fraud were probably inevitable.
The Commissioners themselves may not have been directly involved in fraudulent practices, yet widespread fraud was and is a reality. A 1989 House of Lords report put it rather well: ‘The huge sums which are being lost due to fraud and irregularity against the Community are losses borne by all the taxpayers and traders of Europe. This strikes at the roots of democratic societies, based as they are on the rule of law and its enforcement, and is a public scandal.’ Every year, with depressing regularity, the Court of Auditors, the EU’s financial watchdog, reports that some 10 per cent of the EC budget cannot be accounted for. The report of the wise men was no less damning: ‘It is becoming difficult ... to find anyone who has even the slightest sense of responsibility.’ It accuses the Commissioners of a loss of political control over the ‘administration they are supposed to be running’, and points to evidence of irregularities and fraud in education, tourism, humanitarian assistance, aid to Mediterranean states and programmes to promote nuclear safety, as well as within the Commission’s own security office.
Fraud may not even be the most refractory problem. Perhaps more important, the Commission finds itself unable effectively to do its job because of a latent contradiction between various of its responsibilities. First, it is a regulator, separate from and not accountable to the Parliament, except in the sense that the Parliament can sack the Commission by passing a vote of censure – something of a nuclear option. This lack of accountability is useful. Consider the Commission’s role in enforcing competition policies. Just as no one would want Oftel, say, to be directly controlled by the British Government, so in ruling on the legality of state aid to industry, or of proposed mergers between European firms, the Commission’s independence is a far better guarantee of impartiality and sound judgment than were it accountable.
The Commission is far more than a simple regulator, however. Unlike Oftel, it’s responsible for proposing an agenda for all areas of future public policy, and when it’s exercising political leadership it needs some degree of accountability. At the very least, this would ensure that its proposals were in touch with the preferences of Europe’s citizens, and that governments that don’t like the proposals in question would no longer be able to question the Commission’s democratic legitimacy as a way of mobilising public and political opinion against it.
Ironically, member states alone have the right to alter the institutional design of the EU, even though it’s precisely its relationship with the states that is the source of the major problems bedevilling the Commission. For all their rhetoric about the need for reform, national governments have limited incentives to make the Commission more effective. For one thing, some 80 per cent of EU spending programmes are managed by the member states themselves. As the main beneficiaries, they are far more concerned with ensuring that they get what they think they deserve than with trying to eliminate fraud. The lack of adequate controls over the way these funds are used has been consistently remarked on by the Court of Auditors. But the wise men were unfair in accusing the Commission alone of lack of responsibility: it’s the member states, not the Commission, who possess the necessary resources to exercise such control. Increasing the human resources of the Commission might improve its capacity to spot which governments are breaking EU laws, or failing to implement them satisfactorily.
Perhaps more insidiously, the member states are happy in the knowledge that, should the Commission step out of line, they can abuse it for being undemocratic, and make an issue of the fact that it has no right to take decisions at variance with the preferences of elected governments. Blaming the Commission is often a useful strategy even when it does what governments want. Governments, after all, are past masters at avoiding blame, and the Commission provides a handy let-out. Imagine a government that wants to divest itself of an expensive nationalised industry while avoiding the electoral costs of privatisation. Enter the EU. State aid to industry is, under certain conditions, illegal under EC law. Consequently, the Commission can (with or without the tacit encouragement of the government concerned) forbid the payment to the industry of government subsidies. Not only does the government get the outcome it desires: it can also condemn the Commission for destroying a prized national asset. And if the industry has parliamentary supporters, the news is better still because parliaments – at both European and national level – have no right to vote on Commission state-aid rulings.
For all their criticisms of the Commission’s lack of accountability, therefore, national governments are not that keen to change things. The idea of a President of the Commission with a democratic mandate would appal them. The recent alliance between the European Parliament and national governments over the Santer debacle promises to be short-lived: the European Parliament wants an efficient Commission – the member states prefer a tame one.
No less important are the attempts members make to influence the Commission from within. The textbook view is that the Commission is the impartial defender of the ‘common European interest’, doing what it can to further the integration process. But who sits on the Commission? Nationals of the member states. At the apex of its structure, the Commissioners themselves are political appointees, chosen by national governments to serve for a five-year period. On taking up office, they give a ‘solemn undertaking neither to seek nor take instructions from any government or any other body’. Yet they maintain close links with their home governments throughout their time in office. Certainly it makes sense for the Commission to be in close contact with the governments to whom it will be proposing legislation and whose implementation of that legislation it will monitor. At the same time the practice of staffing the Commission according to national quotas means that its members may simply act as national representatives. Evidence suggests that Commissioners rarely vote against the interests of their country on high-profile issues. Note the mixture of hilarity and horror that greeted French suggestions that a Frenchman should hold the competition policy portfolio in the new Prodi Commission. (And Leon Brittan needed no instructions from London to act as a champion of the free market.) Nationalist tendencies among Commissioners are encouraged by their political advisers (cabinet), most of whom tend to come from the home country and may even have served as senior officials there. It isn’t unusual for them to put pressure on the Directorate General, in an attempt to ensure that their own national interest will be taken into account.
Politicisation also affects senior administrative posts – the A1, A2 and A3 grades in particular. Unofficial national quotas regulate the allocation of these jobs, and tradition dictates which nationalities handle which areas: the French have held the senior position in agriculture since 1958, and a German has traditionally occupied the post of director general in charge of competition policy.
During the early years, when member states jealously guarded their prerogatives to appoint Commissioners and senior administrators, not much attention was paid to the composition of the lower levels of the Commission. De Gaulle’s Foreign Minister, Maurice Couve de Murville, asked by his chef de cabinet how the administration could possibly find three hundred officials to make up the French complement, replied: ‘Send the most stupid.’ Since the single market initiative, attitudes have changed. In an EU where the Council decides on legislative proposals on a majority vote, member states are realising that the more influence they can wield at all levels within the Commission, the more influence they will have on the legislative outcome. Junior officials are crucial in this regard because Commission proposals tend to stick quite closely to the original draft – which it is their task to draw up. Life is much easier for national governments if these officials can be trusted to produce an acceptable proposal, which means that governments are more and more interested in placing ‘their’ people at all levels of the hierarchy. Young officials are being encouraged to sit the examination to become a Commission administrator, and short-term secondees are being sent to work in the Commission as a way of increasing the national presence there.
As a consequence, national fiefdoms have developed within the Commission. The Mediterranean states dominate the Directorates General charged with running the structural funds. DG4, which deals with competition policy, is known to be a largely Anglo-German affair. It’s not a happy state of affairs. Senior managers are fed up with Commissioners’ cabinets and national governments interfering in their work, and officials concerned to secure promotion on their return home are less likely to worry about answering to senior management within the Commission.
Neil Kinnock, now its vice-president, has recently announced a series of initiatives intended to deal with these problems. Limits are to be placed on the number of compatriots that Commissioners can employ in their cabinets. Jobs are to be allocated – or are ideally to be allocated – according to merit rather than national quotas. But it’s far from certain that Kinnock will succeed. For one thing, the member states, while applauding his suggestions in public, have been quick to attempt, in private, to ensure that their quotas are maintained. And the rapidity with which the notions of a French Competition Commissioner or a British Director General for Agriculture were rejected makes it clear that nationality will remain a crucial determinant of staffing policy.
If Kinnock is unsuccessful, the future for the Commission looks bleak. Its chronic image problem, along with a lack of resources and too much interference from member states, will undermine its effectiveness still further, until eventually it is no longer trusted as an impartial regulator. Widespread suspicion as to its honesty and efficiency will stymie attempts to move integration forwards.
This might well be a cause for satisfaction in Britain. But the ultimate paradox is that of all the EU member states, it’s Britain which stands to lose most if the Commission ceases to function. Successive British leaders have, it’s true, been irritated by the thought that the ‘Brussels bureaucracy’ might try to abrogate more powers to itself. Yet the Commission, especially since Delors, is neither as aggressive nor as uncompromisingly committed to driving integration forward, even against the wishes of member states, as it once was.
The most important aspect of European integration for Britain has been the single market. It was Margaret Thatcher who signed up for this and the European market has increasingly become the kind of marketplace the Tories and New Labour feel comfortable in. When 15 member states have to vote on legislation, it is difficult to find a majority in favour of any new measure, which means that the European market is singularly unencumbered by regulation – there are exceptions to this, such as the market-distorting, not to say absurd, Common Agricultural Policy. Nevertheless, the single market conforms more to the British view of economic policy than it does, say, to the French.
And Britain’s single greatest ally in creating this market has been, and will continue to be, the Commission. In order for our multinational corporations to benefit from the fact of their being more efficient than their European counterparts, the Commission must ensure that the latter do not receive unfair financial help from their governments. Equally, London relies on the Commission to ensure that British companies are granted free and fair access to their competitors’ markets. The Commission, in other words, is allowing Britain to export its economic success. Talk to officials in Whitehall, and they’ll tell you – in hushed tones – that the Commission is their ally. Talk to French officials, and they are more than likely to decry European integration as an ‘Anglo-Saxon plot’, designed to foist the free market on them.
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