Carlos Closa. The ratification of the new fiscal and macroeconomic governance treaties: changing EU constitutional rules IPP-CSIC/GGP-RSC-IUE

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1 The ratification of the new fiscal and macroeconomic governance treaties: changing EU constitutional rules Carlos Closa IPP-CSIC/GGP-RSC-IUE

2 Structure of the presentation THE FUNCTIONING OF EU RATIFICATION PROCESSES Closa, C. (2013) The politics of ratification of EU Treaties (Routledge) Theoretical views on ratification The importance of institutions: ratification under unanimity Strategies for achieving succesful ratificaton CHANGING RATIFICATION RULES IN TIME OF CRISIS New requirements and likeages between treaties Domestic procedures choices Effects of changing rules IN MODE OF PROGNOSIS: ON FUTURE EU RATIFICATION RULES

3 Theoretical views on ratification EU constitutionalization has advanced via Treaty revision which requires domestic ratification Theory on ratification: Two-level games logic (Putnam; 1988) Specifications: partial defection Imperfect information (on domestic ratifying actors preferences) (Iida, 1993; Mo, 1994; Iida, 1996; Haller and Holden, 1997; Thurner and Stoiber, 2001) Divided government

4 The importance of institutions Ratification theories fail to explain how level 1 institutions (rules and procedures) affect the outcome Institutions that affect ratification: focuss on domestic preferences succesful ratification of a treaty follows from the accumulation of domestic succesful outcomes This may work in the case of some Treaties (i.e. Amsterdam) However, the most important institutional requirement (the unanimity rule) does not play any role in explanations Constitutional political economy (Buchanan and Tulllock; ) Normative position: unanimity should be the constitutional rule However, unanimity renders agreement and ratification very difficult Despite these theoretical expectations, the EU has succesfully revised 9 treaties. Thesis: under unanimity, actors strategies for ratification are decisive for a favorable outcome beyond specific domestic preferences

5 Which are actors strategies? (Actors: those who have a role in ratification) Preliminary elimination of treaty elements that may activate domestic veto players Timing (sequencing among states processes) Framing (pro/against treaty ratification)

6 Three outcomes of ratification and actors strategies Succesful ratification (ECSC, EEC/EAEC, SEA and Amsterdam) A priori elimination of treaty issues that may activate domestic veto players Discretionary managament of domestic ratification procedures (plus assertive governmental leadership) Timing (domestic and in relation to other member states) Succesful ratification with partial failure (Maastricht, Nize and Lisbon) Prevalence of pro-ratification framing Creation of decisive sequence of pro-ratification events Failed ratifications (EDC, EU Constitution) Prevalence of the anti-ratification frame Creation of an alternative sequence of anti-ratification events

7 Some conclusions from the ratification processes ( ) Number of domestic actors intervening (with and without veto players has increased dramatically) Rules of revision have been locked-in (Catch 22 situation: revision of unanimity requires unanimity) Under unanimity and increasing domestic veto players, failure of ratification is increasingly likely and actors need to engineer pro-ratification strategies

8 Treaty Ratifyin g states Duration of ratificatio n (in months) Chambers 1 Referendum s Held/Called Court Cases Rulings/ Appeals Constitutional Reforms ECSC/ ECC, EAEC 6 15/ EDC (DE) SEA (IE) 2 Maastricht (IE, DK(2), FR) 5 5 (FR, ES, DE, LU, IE) Amsterdam (IE, DK) 1 4 (AT, FR, FI, IE) Nice (IE 2) 0 1 (IE) EU Constitution /10 3/5 3 3 (FR, FI, PT 4 ) Lisbon (FR, FI, IE)

9 CHANGING RATIFICATION RULES IN TIMES OF CRISIS Ratification requirements for the entering into force of the new treaties for economic and fiscal governance EFSF does not require domestic ratification since is constructed as a private law agreement among Member States Asymmetry among the other 3 instruments: Revision of article 136 ordinary ratification requirement (unanimity and remission to domestic constitutional procedures) TSCG: less than unanimity rule: 12 out 17 euro member states and no explicit reference to domestic constitutional procedures TESM: It does not refer to a minimum number of states but the size of their contributions to the Fund: 90% of the capital of the ESM (taking the shares, the minimum possible is 7 states out of 17).

10 The linkeages between treaties a. Revision of article 136 permits the ESM NB: Strictly speaking, the TESM does not require an authorisation from the EU. Its legality is independent and, as a matter of fact, it entered into force well beyond the ratification of revision of article 136 is completed. However: The European Council Decision 2011/199/UE authorises the creation of a stability mechanism among euro states The Irish Supreme Court (Pringle C-370/12) has asked the ECJ whether a Member State of the European Union whose currency is the euro is entitled to enter into and ratify and international agreement such as the ESM Treaty? Secondly, it has asked whether if the European Council Decision is held valid, is the entitlement of a Member State to enter into and ratify the TESM subject to the enter into force of that Decision b. Ratification of the TSCG is the condition for acceding to funding of the ESM c. Merging of the TSCG within the TFEU (ordinary revision procedure, unanimity)

11 Revision art. 136 TFEU TESM EFSF TSCG

12 Ratification: procedures Revision article 136 TFEU. Since the amendment does not increases the competences of the EU and it applies only to the Euro members, states with the most stringent ratification requirements (Denmark and Ireland) opted for the less stringent procedure. No referendums. In particular, Ireland did not require a constitutional reform as it is customary with any EU Treaty revision. Five states (Austria, Germany, Hungary, Luxembourg and Romania) required a 2/3 majority and a further 2; Czech Republic and Slovakia required a 3/5 majority. In general, veto player diminished in relation with former ratification processes, with 2 hurdles still pending: A ruling from the Polish Constitutional Court pertaining whether the ratification procedure in the Sejm should have required a 2/3 majority The assent from the Czech President Vaclav Klaus. The Czech Parliament completed ratification on 5th June. The TSCG. Two euro states (Cyprus and Malta) had considered ratification by means of an executive act (i.e. without a formal vote in Parliament). Cyprus ratified in this way but Malta s government backtracked and the House of Representatives will vote on the Treaty. Outside the euro zone, Poland also considered ratification by means of an executive act but it has also turned towards parliamentary ratification. Apart from Germany, which required a 2/3 majority, all other states proceeded by means of single majority. 2/3 also in Latvia, non euro The only case of a referendum: Ireland The TESM. Treated as an ordinary international treaty in most states. Majority requirements of 50%+1 in all cases but: 2/3 majority required in Germany and Luxembourg and 3/5 majority in Slovakia Five constitutional challenges: Estonia, Finland, France, Germany and Ireland in the later case, the challenge concerned directly the revision of art. 136) but no referendum.

13 Structure of veto players Ratiyfi ng states Entering into force requireme nt Interven ing chambe rs Const/Supr eme Court cases Constituti onal reform Referen dum Interve ning electio n Durati on Article 136 revision 27 Unanimity >20 TSCG 17/25 TESM out of 17 15/ > 9 90% capital ESM 13/

14 Ratification order Article 136 TSCG ESM States with a Ireland Greece Portugal States with a Spain States with hi Cyprus Slovenia Italy Average credi Belgium 14 4 Estonia Slovakia 8 7 AAA Austria France 2 1 Finland 7 6 Germany Luxembourg The Netherla Non euro TSCG signatories Bulgaria 18 Denmark 5 Yes Hungary 4 Latvia 6 Yes Lithuania 12 Yes Poland Romania 13 Yes Sweden 10 Non euro no TCzech Republic United Kingdom

15 IN MODE OF PROGNOSIS: ON FUTURE EU RATIFICATION RULES Having into account: 1. The increasing number of veto players in Member States and the growing difficulty to pass any Treaty revision under unanimity 1. In particular, the position of the UK (including the 2010 EU Referendum Act) 2. The discovery of revision combining: 1. Parallel international law instruments 2. The introduction and succesful working of less than unanimity requirement It may be more probable that new EU treaties proceed through this new procedure