Global Alternatives 2024
The 2024 European Elections: Continuity and Changes

The next European elections will see the struggle for power increase, and the way in which European government is conceived will change. It is realistic to foresee a transition phase, in which the certainties of the past and the new visions being established will coexist, Dario Velo writes.

The EU will have elections in 2024. The campaigns have already begun, but the new ways in which they are developing make their contents and logic, which aspires to assert itself, difficult to understand.

The comparison between the US election campaigns, which are in full swing, and European campaigning is illuminating.

In the United States, two potential candidates are competing, supported by two opposing sides. At stake is the conquest of power, the control of federal powers to realise Democratic or Republican ambitions. Other objectives complete this strategic focus; the fundamental issue is the political control of power.

In Europe, we are going in the same direction, but the journey is still so long that it does not allow us to clearly define right now whether the plan is to repeat the American experience, mutatis mutandis.

The role played in the past by European elections

For many cycles, the European elections have represented the opportunity for a plebiscite in favour of European unification. Even before the vote, the agreement was already guaranteed that in the mid-term there would be a relay in the Presidency of the European Parliament between the two large coalitions, centre-left and centre-right. This relay was of fundamental importance for the European Parliament, endowed with limited powers, whose role could have developed, provided it was supported by a broad political front, de facto an agreement of “national unity” at the European level.

This phase is running out. The transfer of powers from the Member States to the unification process has reached a significant level, making the role played by the European Government increasingly important within the framework of the overall Government of the different institutional levels of the European Union.

The next European elections will see the struggle for power increase, and the way in which European government is conceived will change. It is realistic to foresee a transition phase, in which the certainties of the past and the new visions being established will coexist. Among issues in the focus of current pre-electoral debates, there are financial and fiscal ones.

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The European Central Bank and national sovereignty

It took three decades to reach the approval of the European Monetary Union, overcoming opposition considered insurmountable. The debate was particularly animated when it came to defining the statute of the European Central Bank. The opposing positions can be traced back to two symmetrical opinions.

A first position consisted in maintaining the role of the national central banks. This plan was believed to be faithful to the classic Keynesian approach and would have allowed the Central Banks to be used to cover national deficits in public spending. It corresponded to a confederal model. This position did not need to be clearly explained, drawing strength, according to those who supported it, from the evidence of the current order.

A different position, which will assert itself in the words of the statutes of the European Central Bank, hypothesised a reduction of the role of monetary policy by strengthening the role of real policies. This position was innovative and placed a mortgage on the overall European order.

To evaluate the debate destined to develop during the next European elections, the reasons why the choice of the current statute of the European Central Bank was imposed and at the same time the reasons that animated the opposing forces must be kept in mind. Forces not convinced of the validity of the choice made will likely try to introduce modifications whenever they identify a space for their initiative.

It is necessary to focus attention on the centrally important topic discussed at the time, to predict the contents of the future European electoral debate. Less important, although worthy of consideration, are the technical aspects.

The traditional structure of the national state assigns control of the Central Bank to the executive, in order to help finance public spending. This solution, brought to a European level, implies a European centralist option.

The subsidiary and federal option implies the autonomy of the Central Bank; the nature of the choice has a constitutional dimension, the European federal model. The subsidiary and federal option has resulted in a statute of the European Central Bank, qualified by the cardinal principle of monetary stability.

This principle was seen, by those with a traditional outlook as a conservative, deflationary choice, an obstacle to the adoption of expansionary inflationary policies. An approach that enhances the constitutional perspective as an interpretative criterion, however, offers a completely different point of view.

A subsidiary constitutional order requires that money must not be used to centralise power, as this would reduce the autonomy of regions and local powers, of member states, and of intermediate bodies. Monetary stability hinders the arbitrary movement of resources by those who control the Bank. The principle of subsidiarity requires that the governance mechanisms of the European Central Bank prevent the abuse of power.

The position against the autonomy of the European Central Bank has become a position shared by sovereigntists; ultimately the only real option that supports this position is exit from the Monetary Union to recover national sovereignty. The effect of this decision, where it is taken, is the weakening of the single market, to the point of its dissolution.

The creation of a currency not subservient to the power of the prince in the framework of the European unification process has called into question the traditional division of powers; the role of the prince was replaced by constitutional rules, developed in a democratic way. The democratic governance of money, based on constitutional rules, is part of the European project to build the European Union as the most advanced supranational entity in history.

The European currency, if conceived in this way, could have the consent of the member countries, as it would not lead to the centraliation of power at a European level. The alternative of austerity versus budget deficit divided interests; the search for a broad consensus on the part of the member countries was the sine qua non for transferring monetary sovereignty from the member states to the unification process.

Relating the characteristics of the Monetary Union with the crucial problems that had to be resolved allows us to understand the extent of the problems to be faced in the near future to justify a modification of the solutions adopted at the time.

Fiscal federalism, welfare state, investments and development

The Werner Plan envisaged the foundation of the European Economic and Monetary Union. The Monetary Union was created and was essential to guaranteeing the single market; however, the Economic Union was postponed.

The struggle for power which, as we have seen, will increasingly characterise the European elections, will see opposing positions on economic policies which together will define what kind of European Economic Union will attract the necessary consensus.

Contrasting positions that have characterised European treaties already concluded will recur; those who did not then obtain the necessary consensus will try to reopen the debate.

Aspects of the Economic Union that have not yet been addressed will be the subject of a constituent debate, either as a whole or gradually, election after election.

The main aspects that will predictably be the subject of the electoral debate and its subsequent developments are the definition of the model of fiscal federalism to be developed, the modifications deemed appropriate to the welfare state, the development strategies and the governance of investments.

All these aspects will be influenced by the international order; this makes it more difficult to predict which solutions will prevail.

The term fiscal federalism has a precise meaning: it is the distribution of functions and resources among the components of the European Union. Where vertical subsidiarity is considered, fiscal federalism describes this distribution between European, national, regional and local levels. Where horizontal subsidiarity is considered, this distribution also refers to public and private entities that contribute to carrying out activities of general interest.

The member countries of the Union are also profoundly distinguished by the level of fiscal federalism that characterises them internally. This is set to have a significant influence on the level of fiscal federalism that can be extended to a European level with their consent.

The same applies to the economic and social aspects that can be the field of application of fiscal federalism.

These differences require the search for a common denominator that is more easily acceptable to all member states. This objective is nothing other than the definition of the European Economic Union according to a model of shared fiscal federalism, attributable to the model of the European Union defined during the unification process and respectful of the fundamental values underlying the unification process itself.

In summary, in order to grasp some underlying trends that will need to be debated, it is possible to predict that:

  • Some countries and some political forces will support the need to strengthen the role of European institutions in promoting and governing investments and development;

  • It is foreseeable that some countries and some political forces will try to assert the autonomy of the member states in defining the welfare state model;

  • The subject of conflicting visions will be the constraint of balancing public accounts.

At the financial level, fiscal federalism will assert itself, supported by broad consensus depending on the destination of resources; the use of debt will divide the parties based on its use to support investments and development versus the welfare state; the economic dimension of defence is destined to influence the debate on these issues as a whole.

This schematisation is valid as a first approximation to orient thought, it is not valid for describing the complexity of the problems that will be discussed in the European and national electoral campaigns.

One hypothesis should be taken into consideration to conclude this summary: the creation of new organisations as a form of fiscal federalism could be an important step towards meeting peoples’ expectations. But how the actual policy confronts them, that remains to be seen.

European Elections: A Picture After the Battle
Jacques Sapir
The political upheavals brought about by these elections will be significant. If the main points of fracture are evident in Italy and the United Kingdom, the weakening of Emmanuel Macron, but also the current collapse of the centre-right and the extreme left suggests significant changes in France.
Views expressed are of individual Members and Contributors, rather than the Club's, unless explicitly stated otherwise.