Has Europe has arrived at its Hamiltonian moment? That may not be the right question. Assuming these kinds of comparisons make sense, Europeans might want to focus more on Madison – and particularly his Federalist 10. Madison leads off the essay arguing: ‘AMONG the numerous advantages promised by a well-constructed Union, none deserves to be more accurately developed than its tendency to break and control the violence of faction.’ Translated out of 18th Century political jargon, Madison insists on the virtues of political pluralism as opposed to the vices associated with fixed political interests and coalitions; he also makes the case for a constitutional arrangement that balances the distinctiveness of individual states with the need for harmony across the union. That insight demands attention as Europe seems ever more deeply divided over how to respond to the economic consequences of the COVID-19 pandemic.
The recent decision by the German Constitutional Court has triggered an avalanche of commentary about the primacy of European law and about the political independence of the European Central Bank. These are important issues for debate. I am persuaded by colleagues like R. Daniel Kelemen, for example, that you cannot have a ‘rule of law’ in Europe without a clear hierarchy of legal interpretation. Hence, while I can see the point being made by the German constitutional court about its obligations to uphold the constitutional rights of German citizens, I can also see why the European Court of Justice would insist on having the last word in any assessment of whether a European institution acted within its European mandate.
By contrast, the debate about the political independence of the ECB has taken a detour. The focus lies too narrowly on whether complying with the German court would or would not violate the ECB’s political independence given the wording of the Treaty on the functioning of the European Union and the Statute of the European System of Central Banks. That focus is too legal and in any event crabwalks back into the debate about the primacy of European law. The focus should lie on why the ECB is politically independent instead. Along the way, we should ask whether that independence is necessary for the ECB to forge an effective response to the current economic crisis.
A new ruling by Germany’s constitutional court, which is intended to protect the German people from a mistaken policy implemented at the European level, has placed Germany’s government and its parliament in an impossible situation.
The European Council decided during a summit organized to address the COVID-19 crisis on 23 April to confirm a European Commission program to support national insurance systems. They also approved a program by the European Investment Bank to support lending to small and medium-sized enterprises, and another by the European Stability Mechanism to make loans available to national governments to pay for health care expenses related to the pandemic. Finally, the Council asked the Commission to set out a roadmap for the creation of a ‘recovery fund, which is needed and urgent’. Supporters of the decision hailed it as an unprecedented leap toward a Europe of solidarity; critics decried it as vague and insignificant. They are both wrong and right at the same time.
The European Council will meet by video conference next Thursday. When it does, the three main items on the agenda will be to approve the recommendations made by the Eurogroup on 9 April, to push forward the conversation about a European Recovery Fund, and to restart and restructure the talks about the upcoming multi-annual financial framework. In English, that means the conversation will be about money. Like any conversation about money it will be difficult. The opportunities for misunderstanding are everywhere. Now is a good time to sort out some of the issues.
I am an American – an outsider – not a European. I have been studying and living in Europe for a while; I wrote my doctoral dissertation on Dutch politics; I spend more time now looking at politics in Italy. Alongside that political interest, I have spent much of the past thirty years looking at European monetary integration. Europe has taught me a lot, but there are still many things I find confusing. Top of the list right now is that the governments of the euro area would rather accept a higher shared risk in the ECB than they would face if they agreed to share risks through an institution specifically designed to raise credit in the markets. This strange choice about how to share risks matters because the risks the European face have never been greater.
During her first address to the Conservative Party as Prime Minister of the United Kingdom in October 2016, Theresa May made it clear that: ‘if you believe you are a citizen of the world, you’re a citizen of nowhere. You don’t understand what the word “citizenship” means.’ Moreover, this was not an off-the-cuff remark. As she explained at the top of the speech, May was setting out her governing philosophy. And central to that philosophy is what she called ‘the spirit of citizenship’, which she defined in terms of ‘the bonds and obligations that make … society work,’ ‘commitment to the men and women who live around you,’ and ‘recognising the social contract’ in a way that puts ‘local’ people ahead of people from ‘overseas’. That sort of thinking is attractive, but dangerous — now more than ever.