The EU Institutions before and after Nice

Franck Emmert,
Professor, Dean of the Law School,
Concordia International University

When European integration, which is nowadays presenting itself as the European Union, started in the 1950s, four institutions were foreseen by the founding treaties: a Parliamentary Assembly, a Council, a Commission, and a Court of Justice.¹ Since then, some changes in name have occurred. The Assembly is now the European Parliament and the Council and the Commission have added the European Union to their names. And, of course, the growth of the Community of 6 into the Union of 15² has also brought corresponding growth in the size of the institutions. Other than that, however, the fundamental structures of these institutions have remained the same.

To this very day, the votes in the Council are allocated not in proportion to the population but by political compromise. To this very day, the number of seats per Member State in the Parliament, although allocated by direct elections, corresponds only vaguely to the size of the population, meaning that the size of the individual electoral districts varies considerably. To this very day, the "large" Member States - looking at the size of their population - nominate two Commissioners and the "small" ones one. And to this very day, there is one judge sitting on the Court of Justice per each Member State.³ The decision-making procedures were enhanced in a number of ways - for example by introducing (qualified) majority voting in the Council for many subject areas⁴ - but the institutions themselves have never been fundamentally reformed.

The fact that a Union can work with 15 Member States, using institutional designs originally developed for 6 Member States, can show one of two things: Either they are so good that they stood the test of time and can simply not be improved upon. Or their reform is formally or politically so difficult that it just has not happened, in spite of what may be pressing needs.

It is the purpose of the present article to show that the truth lies somewhere in the middle. On the one hand, the institutional design has indeed enabled the Union to function and to function well. With some relatively minor modifications along the way, the institutions have been able to do their job over almost 50 years and in very rapidly evolving surroundings. On the other hand, there are certain issues which are cause for concern and which will become more pressing as the Union is getting ready to grow beyond 15 and maybe beyond 20. The intergovernmental conference, which culminated in the Nice Summit and the Treaty of Nice, was organized for the better part precisely to do this: to get the Union ready for enlargement by re-designing its institutions and decision-making procedures.

At the time of this writing, it is yet unclear whether the Treaty of Nice will enter into force without substantial modifications. As is commonly known, the Irish rejected the Treaty in a referendum on 7 June 2001. Nevertheless, it is worth asking the question whether this Treaty would fulfil the hopes placed upon it, i.e. whether it would actually get the institutions and decision-making procedures ready for a Union with a membership of up to 27.

Arguably, the next enlargement will not only be a bigger quantitative step than any other that the Union has taken before. What is probably more important is the qualitative difference. In the past, the Union has opened its doors to fellow countries in Western Europe who largely shared its own post-World War II experience, who were reasonably similar in political and social structures, and who had already achieved a certain level of prosperity. The countries now knocking on the doors in Brussels are quite different, however. Their post-World War II experience was dominated by their more or less voluntary association with the Soviet Union. Their economic structures were determined by state plans rather than markets. Their citizens were not used to active participation in social and political life, to questioning the policies and choices of their leaders, to disagreeing with their teachers, and to finding their own way and place in life. And the prosperity thus far achieved is a prosperity of the few, excluding the many from sharing in it. Of course, much has already changed in the last ten years. But much more has yet to change, in particular in the smaller towns and rural areas, in the sunset industries, and in the heads of the people. Old habits die hard, as the proverb says. Therefore, CEECs may get as many beautiful new buildings and roads and computers as necessary, and they will still not be Western democracies where leadership is based on merit and the rule of law is self-evident. Some things will need generations to change.⁵

This makes it all the more important to prepare the European Union well for the next enlargement. European integration was originally conceived to reconcile arch-enemies and to spread peace and prosperity. These original goals have lost nothing of their importance and appeal. Only the territorial coverage has expanded. In the second half of the 20th century, it had become possible to overcome the legacy of two World Wars, to reconcile France and Germany, and to provide for the longest period of peace ever enjoyed in the Western part of the European continent. In the first half of the 21st century, it will be necessary to overcome the legacy of the Cold War, to reconcile East and West, and to spread the peace and prosperity enjoyed in the West to all of Europe. It cannot be the goal to divide an existing cake into smaller pieces to accommodate more family members around the table. This was and is being done in Germany and has pushed the social consensus within that country to point break.⁶ In order to share the achievements of the West with the East, it will be necessary to bake a bigger cake. And for that it will be necessary to draw on the economic, social, cultural, and, above all, intellectual resources of both sides. It will be necessary to get the candidate countries ready for accession to the EU, just as the EU has to get ready to accommodate them. And - as an aside - only a strong and prosperous EU will be a good partner for Russia, a stabilizing neighbour and interesting trading partner.

The issues related to the growth of the Union bear differently on the different institutions. In the Commission, the issue is primarily one of finding sensible portfolios for an ever increasing number of Commissioners, as the large Member States hesitate the give up their second posts and the small ones do not want to forego their representation altogether.⁷ For the purposes of the present article, the reform of the Commission is a marginal issue.

At the European Court of Justice, the problems of growth are much more complicated. The ever increasing work-load and the ensuing delays are just the most apparent ones. However, it would be beyond the scope of this paper to deal with the reforms necessary or possible at the Court in any detail.⁸

Rather, the present article shall focus on the question of distribution of power in the Parliament and Council, i.e. the number of seats allocated to the different countries in the Parliament and the number of votes given to them when their representatives in the Council vote by qualified majority.

In the Council, voting can be by one of four procedures⁹ and it depends essentially on the subject of the vote, which one of them comes to be utilized.¹⁰ First of all, certain important questions still require unanimity. As can be seen from Article 205 (3), this does not require a positive vote from every one of the 15 Member States but rather no veto by any one of them. Wherever this procedure applies, even the smallest of the Member States can outweigh the combined will of all others.

Secondly, the Council can vote by simple majority of its members (see Article 205 (1)). Decisions according to this procedure can be adopted when they are supported by at least 8 of the 15 members. All Member States, regardless of their size, are equal in this procedure.

Thirdly, there is so-called qualified majority voting, where the votes of the Member States are weighted according to the scheme outlined in Article 205 (2) of the Treaty. These weightings have been determined by political decisions, rather than by any mathematical method based on the size of the populations. As will be shown, they give a strategic advantage to the smaller Member States.¹¹

Finally, the Council, in practice, takes many decisions by consensus. This means that actually no vote is taken at all. At the end of the discussions, the presidency simply ensures that no Member State is against the decision and no further discussion is requested.

When analyzing the common practice in the Council, we find that nowadays more than 60% of all decisions could be taken by qualified majority, rather than unanimity. However, de facto some 85% of all decisions are taken by consensus.¹² Psychologically, the difference between unanimity and consensus is important, however. Where the Member State representatives are discussing an issue that requires a decision by unanimity, any one of them de facto has a veto right. Thus, the entire negotiations are conducted in the shadow of the veto.¹³ The many who want the decision to be adopted have to cater for the needs and interests of the few. By contrast, if a decision can be taken by majority, the negotiations may still lead to a decision by consensus but they are conducted differently, namely in the shadow of a vote. The few who do not want a decision have to seek a mutually agreeable compromise. Otherwise the many can call for a vote.

When analyzing the power of the different Member States, it is sensible to focus on the procedure of qualified majority voting. There is a clear trend to submit more and more issues to this procedure and even in if decisions are taken by consensus, we can safely assume that a lot of hypothetical vote counting is going on in the different delegations to see to what extent it is necessary to accommodate the interests of others in order to get the desired result.

When comparing population size and allocated votes according to Article 205 (2), we find a considerable advantage for the smaller Member States. At present, the smallest Member State, Luxembourg, with a population of 420,000, is holding two votes in the Council. The largest Member State, Germany, with a population of 82 million, i.e. 200 times larger, is holding only ten votes. The vote of the representative of Luxembourg, therefore, weighs 40 times more than the vote of his German colleague, if the size of the population which is represented is taken into account.

As it happens, a strategic over-representation of the smaller Member States is quite a typical feature of federal systems. If we look at the US-American Senate, each State of the Federation sends two senators there, regardless of its population size. Consequently, the smallest State, Vermont, with its 590,000 inhabitants, is 55 times better represented in the Senate than the largest State, California, with its 33 million inhabitants. Similarly, the smallest Swiss Canton of Uri is represented 33 times better in the Swiss Bundesrat than the largest Canton Zurich. And in Germany, the smallest Land Bremen is represented 13.6 times better than the largest Land Nordrhein-Westfalen.

No problem in the European Union then? Well, not quite so easy. First of all, all of those federal systems cited above have a bi-cameral system of government. Decisions are taken not only in the federal chamber but require also approval of the parliament. And while this is increasingly also true for the European Union, there is an important difference about its Parliament. While in all other federal systems the Parliaments are composed strictly according to population size, in order to preserve the fundamental equality of votes, this is not the case in the European Parliament. If we look how the different Member States are represented according to Article 190 ECT, we find again a systematic over-representation of the small Member States. A delegate from Germany represents a population of about 830,000, while a delegate from Luxembourg only represents a population of about 75,000. To say it differently, if a member of staff of one of the EU institutions in Luxembourg chooses to live in Luxembourg, her voting power in European elections is twelve times higher than if she chooses to live 20 km down the road in Germany.

The inequality of votes in European Parliament elections has already been the object of litigation all the way to the German Constitutional Court. However, the Court wisely decided not to interfere,¹⁴ since there is no such thing as a simple solution to the matter. If the electoral districts would be re-drawn to be of equal size, that size could not be smaller than Luxembourg, lest the Grand-Duchy were to receive not even one seat in the European Parliament. Consequently, 420,000 would be the size of the standard electoral district and this would mean that Germany alone would receive almost 200 seats in the European Parliament, more than all of the small Member States taken together.

The good news in respect to the European Parliament, on the other hand, is the fact that the MEPs are rarely, if ever, voting according to their nationality. Since they are independent and not subject to instructions from their governments at home - an important contrast to the Council - their voting is determined by their political orientation and not by their citizenship. ¹⁵

The second problem with the distribution of votes in the Council, consequently, is of more serious concern. This is the problem that the big Member States are faced with ever more small Member States. Of 13 candidates currently knocking on the doors of the Union, there is only one with a large population - Turkey - and one with a medium-sized population - Poland. All others are small, when it comes to their population, and consequently would benefit from the systematic over-representation in the Council and Parliament.

At the same time, the budget of the EU is largely based on Member State contributions which, in turn, largely depend on the size of the national GDPs. This means that the large Member States, with their large GDPs, contribute the bulk of the money used by the EU on all Member States.

In the perspective of enlargement, this could lead ultimately to a situation, where the small Member States, thanks to their over-representation in the institutions, can take decisions against the will of the under-represented large Member States. The large Member States could find themselves in a situation where they are told what to do and even have to pay for it!

This scenario is not purely academic. Before the accession of Austria, Finland, and Sweden - wealthy countries with strong traditions of democracy and market economy - the British government strongly rejected any dilution of its powers to prevent a decision from being taken in the Council in the qualified majority voting procedure. Only the so-called Ioannina compromise - named after the town on Corfu where the respective European Council took place - enabled the enlargement to move ahead. And, of course, the very fact that an entire intergovernmental conference focused on these issues and resulted in the reform package embodied in the Nice Treaty, is further evidence.

The final question to be addressed, therefore, is the question whether or not the Nice Treaty resolved the issues outlined above. The expectations before and during the intergovernmental conference certainly ran high. And the actual results are quite meager. In particular among academics, there was widespread disappointment after the Nice summit. However, the heads of State and government of the 15 Member States did achieve a compromise concerning new distributions of votes in the Council and seats in the Parliament and they were able to agree on the votes and seats for all of the present candidates, up to a total membership of 27. The figures may not be beautiful or logical or 100% fair but they were acceptable to all old Member States and to all candidates. From a purely pragmatic perspective, therefore, the intergovernmental conference achieved precisely the result is was conducted for. It could have done more by making additional improvements to the system. But, at least, it did the necessary minimum.

So, what are the new rules going to be? The picture has become much more complicated, because the votes for all countries, not only the candidates, have changed. Under the old system, with an allocation of votes in the Council to the new Member States at the same level of comparable old Member States, there would have been a total of 134 votes with 27 Member States (compared to 87 with the present 15 Member States). However, under the agreed new system, there will be 344 votes with 27 Member States. Thus, it is better to compare the percentage of all votes with the percentage of the entire population in order to get an overview of those countries that have rather more voting power than would be suggested by their population size and those that have rather less. The complete picture can be seen from the following table: Representation and Voting Rights Before and After Nice.

As is immediately visible, the actual changes in the voting powers, i.e. the shift away from the small Member States to more power being held by the large Member States is literally only cosmetic. The same is true for the new distribution of seats in the European Parliament, by the way. This raises the question, whether Nice has resolved anything at all.

What is important to note, however, is the introduction of an additional rule, which could be called a double majority requirement. According to Article 3 of the Protocol on the Enlargement of the European Union, which was annexed to the Treaty of Nice, a paragraph (4) will be added to the present Article 205 ECT. This fourth paragraph was phrased as follows:

"4. When a decision is to be adopted by the Council by a qualified majority, a member of the Council may request verification that the Member States constituting the qualified majority represent at least 62% of the total population of the Union. If that condition is shown not to have been met, the decision in question shall not be adopted."

The percentage to be required for the double majority text was an issue of hot debate during the intergovernmental conference. In the end, a figure at the high end of the negotiations, 62%, was adopted. This is a very clear signal that the large Member States were successful in building an emergency break into the system. Probably, this break will rarely be used. But psychologically, the small Member States will now be negotiating in the shadow of the double majority test. If a specific decision is supported only by small Member States, the large ones will have an instrument to prevent its adoption, even if technically the small ones would have enough votes to push ahead with it.

In concluding, we can say that the Treat of Nice achieved the necessary breakthrough concerning the distribution of powers in the Council and seats in the Parliament. Only practice will show whether all players can be satisfied with this compromise. In any case, this will not be the last word on the issue, as there are a number of countries beyond 27 at the doorstep, such as Croatia, Serbia and Montenegro, Bosnia Herzegovina, and probably one day Switzerland and Norway again. European integration is not going to get boring any day soon!

¹ Cf. Article 4 of the original European Economic Community Treaty of 25 March 1957. The precursor, the European Coal and Steel Community, had the same four institutions, except that the Commission was still called "High Authority"; cf. Article 7 of the ECSC Treaty of 18 April 1951.
² The six founding Member States Belgium, France, Germany, Italy, Luxembourg, and the Netherlands, were joined in 1973 by Denmark, Ireland, and the United Kingdom. The second enlargement added Greece in 1981. Portugal and Spain joined in 1986. Finally, the accession of Austria, Finland, and Sweden in 1995 brought the membership up to 15.
³ True, there is also a Court of First Instance, with another 15 judges. However, it has only a limited jurisdiction and there is an appeal procedure against its judgments to the Court of Justice proper.
⁴ The European Union is based upon the principle of enumerated powers (cf. Article 5 (1) and 7 (1) ECT). According to this principle, the Union can adopt binding measures only in those areas where the Member States have explicitly transferred the necessary powers to the Union. Where the Treaty does not contain a legal basis, the Union has no power to act. The decision-making procedures are outlined in Articles 251 and 252 ECT; the subject areas to which they apply are dispersed in the form of various legal bases throughout the Treaty, see for example Articles 47 or 95 (1)2, which refer to the procedure in Article 251. By contrast, other areas of decision-making still require unanimity, as demonstrated for example in Article 94, another legal basis.
⁵ This certainly does not mean that all is well in the West and all is bad in the East. However, having worked and lived for years in Central and Eastern Europe, I can testify that progress is sometimes stunning; yet widespread and deeply entrenched inertia and Soviet-style command-and-control thinking is just as fascinating.
⁶ A popular joke may illustrate this point: Before (re-)unification, Germans like to say that they were one people in two states. Now the saying goes that they are two peoples in one state.
⁷ The public attention given to this topic is astonishing and explainable only by the fact that it is a relatively straightforward issue which can be understood by everyone and easily communicated via the media. If rationality reigned, this would be a none-issue, since, according to Article 213 ECT, the Commissioners are required to perform their duties in complete independence, in the sole interest of the Community. They are explicitly prohibited from seeking or accepting any instructions from their own or any other Member State; correspondingly, the Member States are committed to refraining from seeking to influence or instruct the Commissioners. In borrowing a phrase coined for the judges on the European Court of Justice by its former President, Sir Stuart Mackenzie, for all it matters, the Commission could consist of thirteen Russians.
⁸ For that purpose see Emmert, Der Europäische Gerichtshof als Garant der Rechtsgemeinschaft, doctoral dissertation at the University of Maastricht, 1998.
⁹ See Article 205 ECT. For thorough analysis of the Council see e.g. Westlake, The Council of the European Union, London, 1995.
¹⁰ The legal bases mentioned above, in note 4, are laying down the rules about participation of Parliament in decision-making, as well as those about the voting procedures in the Council.
¹¹ For more detailed analysis see Emmert/Bossaert, Die Stellung der Kleinstaaten in der Europäischen Union, in Cottier/Kopse (eds), Der Beitritt der Schweiz zur Europäischen Union, Zürich 1998, at pp. 113-137.
¹² For detailed analysis see Emmert, Evaluation de l'activité législative de la CE, in Institut Suisse de droit comparé (ed.), Conséquences institutionelles d'une adhésion а l'Union européenne, Zürich 1999, pp. 263-305.
¹³ To the best of my knowledge, the illustration of negotiating in the shadow of a veto vs. negotiating in the shadow of a vote was first coined by Joseph Weiler, The Transformation of Europe, 100 Yale Law Journal, 1991, pp. 2403-2483 (at pp. 2460-2461).
¹⁴ Decision of 31 May 1995, 2 BvR 635/95, as reproduced in EuGRZ 1995, p. 566.
¹⁵ For more information on the European Parliament see Corbett/Jacobs/Shackleton, The European Parliament, 4th ed., London 1995.