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Andrew Glencross (University of Aberdeen): The Eurozone Crisis and the Two Tensions in EU Democratic Governance

The Eurozone Crisis and the Two Tensions in EU Democratic Governance

The quality of democratic governance in the EU has long been a vexing topic, with accusations that the EU has a fundamental democratic deficit contradicted by arguments – notably those of Andrew Moravcsik – seeking to absolve EU governance of such blame. However, this split in the scholarly literature masks two tensions within the EU’s democratic practices, both at the EU and the national level, revealed by the response to the Eurozone crisis.

These tensions arise because of multiple claims of democratic accountability and legitimacy wielded by different actors within the EU system e.g. national politicians, supranational institutions etc. In this context of competing claims to legitimacy and multiple avenues for holding the EU accountable Fritz Scharpf’s conceptual framework identifying two forms of democratic legitimacy is very useful. As defined by Scharpf, policies and policy-making can be legitimate by virtue of the benefits they produce resulting in “output legitimacy”. According to this logic, decisions are legitimate not because citizens have had a role in shaping them but ‘because they effectively promote the common welfare of the constituency in question’. This contrasts with “input legitimacy” stemming from preferences expressed via political participation, namely citizens actually voting for parties with specific policies.

The ECB and The Tension between Output and Input Legitimacy

Hence one fundamental tension within EU democratic governance is that between bearers of output legitimacy and rival claims to legitimacy articulated by political actors that hold an electoral mandate. In the Eurozone crisis, this cleavage is evident in calls by politicians from Mediterranean countries for the European Central Bank to buy government debt to help lower interest payments and thereby smooth the way for socio-economic reforms. This division can also be understood, according to Giandomenico Majone, as that between majoritarian institutions (e.g. parliamentary bodies) and non-majoritarian institutions (e.g. courts or specialized agencies). In the EU, national majoritarian institutions have delegated certain policy competences to expert, non-partisan institutions such as the Commission or the ECB, on a fiduciary basis. That is, a fiduciary or trustee acts not as an agent – doing the bidding of the delegating body – but as an independent body responsible for making sure the principals stick to their treaty commitments.

The tension that exists between delegating institutions and the trustees to which they have delegated certain policy competences is not just a question of rivalry between majoritarian and non-majoritarian bodies. In addition to their separate mandates (electoral versus delegated) these different institutions have separate time horizons. Political bodies are inevitably affected by time inconsistency i.e. their preferences are dynamic, based on changing voter inputs. In this context, the EU’s apolitical, non-majoritarian bodies are designed to avoid time inconsistency by being purposefully detached from short-term electoral exigencies. This separation allows trustees to take decisions necessary for long-term policy success, thereby generating a credible and binding order that national governments cannot overturn for the sake of short-term gains.

This clash of different time horizons is again evident in the conflict pitting the ECB’s monetary orthodoxy (which sees debt-buying as inflationary) with political calls for massive bond-buying intervention. Bearers of output legitimacy, such as the ECB, necessarily have long time horizons likely to clash with the short-term interests of national governments. Of course, supranational apolitical bodies are not completely aloof from public sentiment and the broader political climate. For instance, the ECB has a strong interest as Francisco Torres puts it, in “finding ways to be perceived … as acting effectively on behalf of the interest of European or Eurozone citizens”. Consequently, it should not be such a surprise that an institution steeped in output legitimacy should respond to demands stemming from input legitimacy. In the Eurozone sovereign debt crisis, the result of this pressure was that the ECB’s implementation of Outright Monetary Transactions (OMT), an unprecedented scheme for massive bond-buying. With an output legitimacy eye on the long-term, however, the counterpart of OMT is that it comes with conditions attached: member states have to implement plans for fiscal rigour.

National Constraints on Input Legitimacy: Towards a Hierarchy of Democratic Legitimacy?

Yet there is another fundamental tension within EU democratic governance, beyond that between elected and unelected components of the complex EU institutional architecture. Within member states themselves there is a growing tension between political elites and ordinary voters, which in turn is destabilizing attitudes towards integration amongst national elites. This trend contrasts with the situation at the start of the European integration process, when questions about how it should be organized and what policies should be pursued were kept largely separate from national politics.

It is the spread of EU competences that has increased the salience of the integration dimension in national politics. This added saliency has challenged both elite consensus and citizens’ permissiveness towards accepting greater integration. This trend, as well as that of increased media coverage, began with the 1992 Maastricht Treaty, which was hugely contentious in many countries. Since this time, mainstream political parties have been forced to reconsider their stance on integration, often revealing internal divisions on a subject they for good reason tried to avoid debating.

Overall, mainstream parties are increasingly divided over what stance they should take on integration as they are confronted by fringe parties able to mobilize eurosceptic opinion, especially in European parliamentary elections where UKIP or the Danish People’s Party thrive. Electorates thus increasingly question the need for further conferral of competences to the EU. The result is that parties and leaders are subject to what Lisbet Hooghe and Gary Marks call a “constraining dissensus”, whereby what they can do at the EU-level is increasingly scrutinised and challenged in national politics. This “dissensus” operates as a domestic constraint on the kind of deals elites can make to solve EU policy problems, thereby adding an extra complication to the tension between elected and unelected institutions.

However, the major threat posed by the constraining dissensus articulated within member states is not just that of rejecting output legitimacy – rule for the people, whether by unelected institutions or diplomatic deals made by EU political elites. More importantly, the growing domestic constraints on how integration is debated in national politics are linked to a rejection or at least a de-legitimation of input legitimacy articulated by actors from other countries. For instance, the German parliament or constitutional court is happy to have the final say on the legality of the EU bailout fund at the same time as the German government pressured the Greek government not to hold a referendum on the terms of the EU bailout. Similarly, whilst the French government chafes at meeting the deficit-reduction criteria of the Stability and Growth Pact it enthusiastically supported the replacement of Silvio Berlusconi by a technocratic government in Italy, precisely for the sake of better implementing austerity measures.

Hitherto, EU democratic governance has accommodated the existence of more than a single democratic political and thus the messy co-existence of multiple accountability claims made in the name of different definitions of the people. In this context, the growth of a constraining dissensus starts to raise the question of where the “hierarchy of democratic legitimacy” resides, namely within a member state or not. That is, which community should have the final say based on its own democratically-expressed preferences? Expressed in these polarized terms, input legitimacy risks becoming an exclusively national concept rather than one shared with EU-level inputs, such as the European Parliament or the citizens’ initiative, as well as with combinations of EU peoples as when parliaments act together to invoke the yellow or orange card subsidiarity procedures.

Hence the Eurozone crisis provides an opportunity to see not just the tension between output and input legitimacy but also how far input legitimacy is articulated as a purely national phenomenon. The evolution of the ECB’s policy shows the ability to respond to concerns from actors invested with input legitimacy. Nevertheless, there are signs that input legitimacy itself is understood in national rather than in compounded, European terms. Such a definition, which implies a hierarchy in the source of democratic legitimacy, is bound to complicate future steps towards further integration.

 

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