Republicanism during the EU’s Ninth Legislative Term Taking Stock with the White Paper on the Future of Europee
Armin von Bogdandy & Michael Ioannidis 1
I Thesis and argument
As we write, the European Union’s ninth legislative term is drawing to a close. What is the Union like at this time of political change? To take stock, we turn to the Commission’s 2017 White Paper on the Future of Europe, which presents five scenarios for the development of the EU by 2025. They range from a return to the basics of the Single Market (Scenario 2) to a much deeper federation (Scenario 5).2 Although the Commission does not explicitly endorse any of these scenarios, the structure of the White Paper (placing Scenario 5 as the last scenario), its framing (such as the role of the Ventotene Manifesto) and its vocabulary (such as the European ‘We’) suggest that it is aiming for further federalisation.
By this standard, the Commission can be satisfied. In terms of the White Paper, the EU is in Scenario 5, perhaps even in a ‘Scenario 5+’, because important integration steps go beyond the expected horizon of 2017. We substantiate this thesis by reflecting on the White Paper in the light of two concepts that we believe shed light to the federal aspiration of the European Union, European society (II.) and the new republican dynamics (III.), and focusing especially with regard to Economic and Monetary Union (IV.).
II Traces of European society
70 years of ever closer union may not have produced a European federal state, a European nation or a European people, but they have led to a European society, which has become much denser in the ninth term. There are good reasons – theoretical, empirical and legal – why we can, indeed should, speak of a European society today.3
1. Armin von Bogdandy is director at the Max Planck Institute for Comparative Public Law, Michael Ioannidis is Lead Legal Counsel at the European Central Bank; the usual disclaimers apply.
2. European Commission, White Paper on the Future of Europe. Reflections and scenarios for the EU27 by 2025, COM(2017)2025, 1 March 2017; page numbers in the text refer to this document.
3. In detail William Outhwaite, European Society, Cambridge, Wiley, 2008; Stefanie Börner and Sören Carlson, Europasoziologie, Baden-Baden, Nomos, 2023; Armin von Bogdandy, The Emergence of European Society through Public Law: A Hegelian and Anti-Schmittian Approach, Heidelberg, Oxford, OUP, 2024.
70 years of ever closer union may not have produced a European federal state, a European nation or a European people, but they have led to a European society, which has become much denser in the ninth term
The concept of ‘European society’ captures empirical observations of the intensification and persistence of social interactions in the space defined by Union law. For ease of understanding: European society is simply a better concept for understanding the 70 years of Europeanisation and integration of national societies, with a marked acceleration in the ninth term, not least because of the crisis it has had to cope with.
European society is a legal concept with constitutional dignity, enshrined in Article 2 TEU by the Treaty of Lisbon. As the White Paper shows (pp. 10, 24, 26), this concept is part of political communication; it has also found its way into the case law of the Court of Justice4 and into legal scholarship.5 Like Article 2 TEU, the White Paper understands ‘European society’ to be more than just civil society (p. 3). ‘Civil society’ refers only to the sphere of private engagement for the common good. The concept of society is much broader: as in Article 16 of the Declaration of the Rights of Man and of the Citizen of 1789 or Article 8 para. 2 of the European Convention on Human Rights, in Émile Durkheim or Max Weber, it includes political institutions, in Article 2 TEU those of the European Union and its Member States. European society is not antithetical to public authority but encompasses it.
The concept of European society provides a better understanding of the challenges facing the Union. By using the term European society, it becomes clear that most of today’s challenges are no longer specific to the Member States, but affect all European citizens as members of a society. Furthermore, the concept promotes a better understanding of the conflicts that concern the Union: these are no longer just conflicts between Member States, but also conflicts within a society. It is not enough to view the conflict over the Union’s fiscal and economic policy
By using the term European society, it becomes clear that most of today’s challenges are no longer specific to the Member States, but affect all European citizens as members of a society
4. Judgment of the General Court of 27 July 2022, RT France v Council (Case T-125/22, EU:T:2022:483, paragraphs 55, 88, 193 and ff.).
5. Cf. only Stelio Mangiameli, Article 2, in: Hermann-Josef Blanke and Stelio Mangiameli (ed.), The Treaty on European Union (TEU): A Commentary, Berlin, Springer, 2013, Article 2 TEU, para. 5 f. and 35-41; Loïc Azoulai, ‘The law of European society’, Common Market Law Review 59, Special Issue, 2022, pp. 203-214.
only as a conflict between responsible (or stingy) Member States in the North and Keynesian (or financially irresponsible) ones in the South; the conflict over immigration only as a conflict between Member States at the external borders and those within; the conflict over the democratic rule of law (an astonishing omission from the White Paper) only as a conflict between liberal western Member States and illiberal eastern ones. These are always conflicts found between different political and ideological camps which are present in almost all Member States.
A key development in the ninth term was the Union’s response to authoritarian developments in Poland and Hungary. The Union’s mobilisation led to communicative processes that have deepened European society. 6
III Evidence of the Republican Dynamic
Republican federalism is the second basic frame of our assessment. Indeed, the White Paper’s key reference is the Ventotene Manifesto, which aims for a federal republican Europe (p. 6).7 This manifesto builds on Kant and the Federalist Papers.
Most of the federalist positions that today conceive of the Union as a democratic and solidarity-based polity have a republican orientation. It is a federalism that unites republics in a common republic. Its proponents include the Italian socialist Giuliano Amato, the French liberal Valéry Giscard d’Estaing, and the Belgian Christian Socialist European federalist Jean-Luc Dehaene, who as Presidium of the Constitutional Convention drafted Article 2 TEU. This spirit can also be found in the Conference on the Future of Europe, with its quest for more European solidarity, more participation by European citizens and more joint decision-making.8 It is also obvious in the Commission’s Legal Service’s 2022 publication ‘70 Years of EU Law’, with the republican-alluding subtitle ‘A Union for its Citizens’.9
We see a specifically republican development during the ninth term in the importance gained by Article 2 TEU, which we read as a republican manifesto providing for the European constitutional core (or identity). Today, the values and principles of Article 2 TEU are omnipresent in legal, political and everyday discourse. This significance of the values was not yet foreseeable in 2017. The values appear in the 2017 White Paper only in passing and in rather empty phrases. This is all the more remarkable as Viktor Orban’s authoritarian drift had already begun in 2010. The White Paper’s failure to mention this existential challenge shows how difficult it has been for European politics to respond to it and place it in one of the scenarios for the future of the EU.
6. Alexander Somek and Elisabeth Paar, ‘Europe’s Political Constitution’, European Law Open 2, 2023, pp. 1-27.
7. Altiero Spinelli and Ernesto Rossi, ‘Per un’Europa libera e unita. Progetto di un manifesto’, in: idem (ed.), Il Manifesto di Ventotene, Napoli, Guida, 1982, pp. 9-30 (22 ff.). On European republicanism, Armin von Bogdandy, ‘The European Renaissance of Republicanism. On the Future of EU Law in Light of Article 2 TEU’, Max Planck Institute for Comparative Public Law & International Law (MPIL) Research Paper No. 2024-02, Available at SSRN.
8. Conference on the Future of Europe, Report on the Final Outcome, Brussels, 2022.
9. European Commission (ed.), 70 Years of EU Law. A Union for its Citizens, Luxembourg: Publication Office of the European Union 2022.
In the face of this political deadlock, the Court of Justice delivered judgments whose transformative impact was compared by its President to van Gend en Loos and Costa v ENEL10: it began in 2018, one year after the publication of the White Paper, with the judgment in the ASJP case.11 This line of jurisprudence culminated in the judgments of 16 February 2022, perhaps the most important during the IX legislative period: The values enshrined in Article 2 TEU ‘define the very identity of the European Union as a common legal order’, according to the plenary.12 The ninth term has thus seen the functional constitutionalism of the Court of Justice, which focuses on the effectiveness of the EU, develop into a principled constitutionalism in line with the constitutional traditions of most Member States. This operationalisation is not an isolated path of the Court of Justice, but is supported by all institutions. The European Council and the Union legislature of the ninth term have confirmed the case law and moulded it into legal acts that were unimaginable in 2017.13
Why are these republican developments? In comparative law terms, they are an application of what the French and Italian (and US) constitutions qualify as a defence of the republican form of government. Moreover, there is a republican undertone in the substance of the relevant decisions: all EU institutions define the rule of law in terms of the separation of powers, representative democracy, transparent legislation and the protection of fundamental rights, i.e. not in terms of the formal concept of the rule of law. The emphasis on the separation of powers and independent institutions in particular is a key republican objection to those who use the electoral mandate as their strongest trump card.
Moreover, the growing importance of solidarity underpins a republican interpretation of integration in the ninth legislative period. The White Paper already emphasises this principle more than any other, since the quotation from Robert Schuman with which the Commission opens its comments is about solidarity (p. 4).14 The Court of Justice confirms this republican interpretation with the role it assigns to the principle of solidarity in the second sentence of Article 2 TEU. 15 It is no coincidence that Koen Lenaerts and Stanislas Adam emphasise the federalising significance of solidarity.16
10. Koen Lenaerts, ‘Upholding the Rule of Law through Judicial Dialogue’, Speech at King’s College London (21 March 2019), [min: 19:23].
11. Judgment of the Court of Justice of 27 February 2018, Associação Sindical dos Juízes Portugueses (C-64/16, EU:C:2018:117, paragraphs 30, 32, 35).
12. Judgment of the Court of Justice of 16 February 2022, Hungary v Parliament and Council (C-156/21, EU:C:2021:974, paragraphs 127, 232 and ff.); judgment of the Court of Justice 16 February 2022, Poland v Parliament and Council (C-157/21, EU:C:2022:98, paragraphs 145, 264 and ff.).
13. See recitals 3 and 5 of Regulation (EU) 2020/2092 of the European Parliament and of the Council of 16 December 2020 on a general regime of conditionality for the protection of the Union budget, OJ 2020 L 433I, p. 1.
14. The importance of solidarity for republicanism derives in particular from the French tradition, see Claude Nicolet, L’idée républicaine en France: Essai d‘histoire critique (1789-1924), Paris, Gallimard, 1994.
15. Judgment of the Court of Justice, Hungary v Parliament and Council, paragraph 129. (fn.12).
16. Koen Lenaerts and Stanislas Adam, ‘La solidarité, valeur commune aux états membres et principe fédératif de l’Union européenne’, Cahiers de droit européen 57, 2021, pp. 307-417, 314 and ff.
IV A Republican EMU
1 Criteria
If we look at what the White Paper calls for in the fifth scenario, we see that much has been achieved in the ninth term. The Union has built up a huge administration for refugees. This is reflected in the increased powers of Frontex and the European Asylum Agency (EUAA, formerly EASO) and their significantly increased financial resources. Frontex’s budget has increased from €254 million in 2016 to €829 million in 2023, 17 while the EUAA’s budget has increased from around €19 million in 2016 to around €180 million in 2023.18 Moreover, the Union has been able to meet almost all the challenges posed by the British withdrawal within the constitutional framework of the Union, demonstrating a capacity for action that has probably surprised all observers.
A key issue in the assessment of the White Paper is whether the European Economic and Monetary Union (EMU) has evolved in line with the fifth scenario.19 The benchmark for the White Paper is the 2015 Report ‘Completing Europe’s Economic and Monetary Union’ by Commission President Juncker, President of the Euro Summit Tusk, President of the Eurogroup Dijsselbloem, President of the European Central Bank Draghi and Martin Schulz as President of the European Parliament (hence the Five Presidents’ Report),20 which the White Paper integrates into its Scenario 5 (pp. 17-18). Scenario 5 thus calls for a strengthening of EMU through substantial steps not only in the economic union, but also in the fiscal union, financial union and political union.21
The Union has been able to meet almost all the challenges posed by the British withdrawal within the constitutional framework of the Union, demonstrating a capacity for action that has probably surprised all observers
17. Statista, Budget of the European Border and Coast Guard Agency (Frontex) for the years 2005 to 2024, (30/05/2024), available here
18. EUAA, Statement of Revenues and Expenditures 2016, (30 May 2024), available here; Statement of Revenues and Expenditures 2023, (23 May 2024) available here
19. The rhetoric of solidarity is remarkable, White Paper, p. 9 f.
20. European Commission, Completing Europe’s Economic and Monetary Union, 22 June 2015.
21. More detail in Frank Schorkopf, ‘Zukunftsorientierung oder Realitätsleugnung? Der Präsidentenbericht zur Reform der Europäischen Union, Zeitschrift für Staats- und Europawissenschaften’, ZSE 13, 2015, pp. 356-373.
The Five Presidents’ Report called for the strengthening of the economic union through dedicated competitiveness authorities, more effective procedures for tackling macroeconomic imbalances (MIPs) and binding convergence benchmarks for employment and social performance, which is why the European Semester is designed to improve policy coordination and surveillance and better integrate the economic, fiscal and social dimensions. A new European Fiscal Board (EFB), a shock absorption mechanism and a strengthening of the European Stability Mechanism (ESM) are intended to take the fiscal union forward. On the financial union, the report calls for a backstop for the Single Resolution Fund (SRF) and a European Deposit Insurance Scheme (EDIS) to complete the banking and capital markets union. The political union should be strengthened through better parliamentary oversight, a eurozone treasury and the integration of international legal structures (in particular the ESM) into EU law.
In order to make a meaningful assessment of whether developments are in line with the Five Presidents’ Report (and thus Scenario 5 of the White Paper), it is first necessary to move away from the idea of a ‘genuine’ and ‘complete’ Economic and Monetary Union. These concepts imply that it is clear what a ‘genuine’ and ‘complete’ EMU would mean for European society. But there is no such thing. There is no a priori yardstick for determining the ‘right’ regulatory and institutional framework for an economic and monetary union. What is ‘right’ is a matter of political choice. Therefore, we do not assess a slavish one-to-one implementation of the proposals contained in the 2015 report, but rather an overall assessment in the light of the problems identified in the report. The advantage of this approach is that it avoids a mechanical ‘tick-the-box’ assessment that would underestimate EMU developments. Of course, important demands remain unfulfilled, such as a European deposit guarantee scheme, which is important for the banking union. At the same time, innovations introduced during the ninth term implement Scenario 5 and go even beyond the 2015 horizon.
2 The Development of the EMU
By 2020, EMU had taken only hesitant steps in line with the Five Presidents’ Report. Efforts have been made to improve the efficiency of the procedures for dealing with macroeconomic imbalances (MIPs),22 and the European Fiscal Board (EFB) was established in 2016 to improve fiscal surveillance and advice23.
In 2019, the Eurogroup agreed on an important reform of the ESM, which was endorsed by the Euro Summit.24 It included a backstop for the single resolution fund, streamlined decisionmaking processes and new financial assistance instruments. Ratification of the reform by the Italian parliament is, however, still pending. In any case, the ESM would remain an international organisation and therefore ‘not fully integrated into the EU Treaties’ (p. 18). Nevertheless , an ESM formally outside the Treaties is less critical today than in 2015 and 2017 because the Court of Justice has partially integrated it into EU law. It already ruled in the Pringle case that EU measures must be conditioned by the ESM, which the Commission must ensure.25 In Ledra Advertising, the second landmark ruling on the ESM, the Court extended fundamental rights to the ESM: EU institutions that ‘borrowed’ by the ESM26 are also bound by the Charter.27 If the Commission fails to ensure that loan agreements under the ESM are compatible with EU law, it can be held liable under Article 340(2) TFEU.28
An ESM formally outside the Treaties is less critical today than in 2015 and 2017 because the Court of Justice has partially integrated it into EU law
22. Beatrice Pierluigi and David Sondermann, ‘Macroeconomic imbalances in the euro area: where do we stand?’, ECB Occasional Paper Series, 2018.
23. Commission Decision (EU) 2015/1937 of 21 October 2015 on the establishment of an independent advisory European Fiscal Board, OJ 2015 L 282, p. 37-40.
24. Euro Summit, main results 13 December 2019.
25. Article 13(4) ESM Treaty and judg ment of the Court of Justice (plenary) of 27 November 2012, Pringle (C-370/12, EU:C:2012:756, paragraphs 112-113).
26. The Commission, the ECB and the Court of Justice are entrusted with ESM functions outside the (formal) EU legal order. The Court of Justice has recognised that this is compatible with EU law. See the judgment of the Court of Justice, Pringle, paragraphs 153 et seq.
27. Judgment of the Court of Justice of 20 September 2016, Ledra Advertising v Commission and ECB (C-8/15 P to C-10/15 P, EU:C:2016:701, paragraphs 67 and 59); judgment of the General Court of 13 July 2018, Chrysostomides, K. & Co. and Others v Council and Others (T-680/13, EU:T:2018:486, paragraphs 93 and 96).
28. Judgment of the General Court, Chrysostomides, K. & Co. and Others v Council and Others, paragraph 96.
The banking union has also made progress, for example with the deepening of the Single Supervisory Mechanism (SSM). Nevertheless, important responsibilities for crisis management remain at the national level, and even where crisis management responsibilities have been centralised – as in the area of resolution – there is a strong incentive not to use the EU resolution option. The euro area banking system remains fragmented and many banks continue to buy mainly sovereign bonds of their own country, perpetuating the sovereign-bank vicious circle.29
The same goes for the Capital Markets Union. On the one hand, progress has been made, including the 2020 Action Plan, which aims to diversify funding sources and promote cross-border investment. On the other hand, there is no doubt that capital markets are poorly integrated, which means that we can only speak of a Capital Markets Union to a certain extent. 30
Importantly, until 2020 there was no shock absorption mechanism, no Union fiscal capacity, in place, a significant gap in the architecture of the EMU. Already in 2017, in the light of the Five Presidents’ report, the Commission had presented a roadmap for a European stabilisation mechanism to quickly mobilise resources for Member States. The sole objective at that time was to cushion asymmetric shocks. The Commission was also keen to minimise moral hazard.31 In 2018, it made corresponding legislative proposals to set up a reform support programme32 and a European investment stabilisation function.33 The Commission’s proposal was based on Article 175(3) TFEU, which aims at economic, social and territorial cohesion. This was met with considerable resistance in the Council. Nevertheless, the Euro Summit authorised the Eurogroup to develop a ‘Budgetary Instrument for Convergence and Competitiveness for the Eurozone’ (BICC),34 which should be part of the EU budget from 2021.35 While the Reform Assistance Programme and the European Investment Stabilisation Function were based on Article 175(3) TFEU, the BICC proposal was based on Article 136(1)(b) TFEU in conjunction with Article 121(6) TFEU.
The picture changed towards a breakthrough in Scenario 5 in the wake of the COVID crisis, in particular thanks to the introduction of a Union fiscal capacity. The year 2020 marked a significant step, combined with a course correction, due to several crises, in particular the COVID-19 pandemic, but also climate change, challenges to
29. David Howarth and Amy Verdun, ‘Economic and Monetary Union at twenty: a stocktaking of a tumultuous second decade: introduction’, Journal of European Integration 42, 2020, pp. 287-293.
30. Eurogroup, Statement of the Eurogroup in inclusive format on the future of Capital Markets Union, Statements and remarks, 11 March 2024; ECB Governing Council, Statement by the ECB Governing Council on advancing the Capital Markets Union, 7 March 2024; Christine Lagarde, A Kantian shift for the capital markets union, Speech at the European Banking Congress, 17 November 2023.
31. European Commission, Questions and Answers: Commission sets out roadmap for deepening Europe’s economic and monetary union, December 2017.
32. Proposal for a Regulation of the European Parliament and of the Council establishing the Reform Support Programme, COM(2018) 391 final, 2018/0213(COD).
33. Proposal for a Regulation of the European Parliament and of the Council establishing a European Investment Stabilisation Function COM/2018/387 final - 2018/0212 (COD).
34. Euro Summit (14 December 2018) - Declaration, EURO 503/18, margin no. 4.
35. Proposal for a Regulation of the European Parliament and of the Council on a governance framework for the budgetary instrument for convergence and competitiveness for the euro area, 24 July 2019 COM(2019) 354 final, 2019/0161 (COD).
the rule of law and geopolitical tensions. These crises required a conceptual evolution, indeed a reorientation of EMU, away from thinking in terms of moral hazard, asymmetric shocks, competitiveness and convergence towards thinking in terms of trust, solidarity, productivity and overcoming common challenges. Since 2012, the European Central Bank has already played a crucial role in minimising divergences in borrowing costs with new instruments. The NextGenerationEU (NGEU) project builds on this legislatively: a fiscal mechanism of the Union is to tackle common challenges with comprehensive fiscal measures. The focus is no longer on coping with asymmetric shocks, but on launching a genuine common economic policy. Solidarity replaces moral hazard and responsibility as the central concept.36
The Court of Justice has constitutionally confirmed and developed this solidarity dimension in the rule of law conditionality cases
As the Eurogroup declaration of 9 April 2020 shows, European solidarity gained a new role in the EMU.37 Commission President von der Leyen described SURE, the instrument for granting concessionary loans to EU Member States to support their shorttime working schemes, as ‘real European solidarity in action’.38 SURE was based on Article 122 TFEU and, unlike the euro crisis aid packages, was subject to only a few conditionalities. Article 122 TFEU is also the legal basis for the basic component of the NGEU.39
The choice of Article 122 TFEU as the protagonist of the post2020 EMU is a political and conceptual step that is fundamental for Scenario 5 of the White Paper. 40 Article 136(3) TFEU, the basis of the previous crisis support, aims at avoiding moral hazard and emphasises national responsibility. Article 175(3) TFEU, which underpins the proposed reform support programme and the investment stabilisation function, and which has been chosen as the legal basis for the RFF, already focuses on cohesion. Article 122 TEU is even more clearly committed to the solidarity principle in the second sentence of Article 2 TEU, so that this legal basis is best suited to a solidary republicanism.
36. Michael Ioannidis, ‘Between Responsibility and Solidarity: COVID-19 and the Future of the European Economic Order’, Zeitschrift für ausländisches öffentliches Recht und Völkerrecht 80, 2020, pp. 1-11.
37. See here.
38. Speech by President von der Leyen on the economic recovery plan and resilience at the Fundação Champalimaud, 29 September 2020.
39. Council Regulation (EU) 2020/2094 of 14 December 2020 establishing a European Union Recovery Instrument to support the recovery in the aftermath of the COVID-19 crisis, OJ L 433I, 22.12.2020, p. 23-27.
40. On the question of the legal basis Alberto de Gregorio Merino, ‘Follow the Money, Follow the Values’, in: Ruth Weber (Hrsg.), The Financial Constitution of European Integration: Follow the Money?, Oxford: Hart Publishing, 2023, pp. 113-130.
The Court of Justice has constitutionally confirmed and developed this solidarity dimension in the rule of law conditionality cases. In contrast to the Pringle judgment, which was committed to the principle of conditionality in order to avoid moral hazard, the focus is now on mutual trust and solidarity.41 The Court of Justice thus combines macroeconomic constitutional law with the republican manifesto of Article 2 TEU. It positions the Union budget as an instrument of solidarity and demands the conditions for mutual trust between Member States in the lawful and responsible use of these budgetary resources.42 This links transfers to compliance with Article 2 TEU and allows for instruments of ‘horizontal conditionality’ that counteract deficits in the rule of law.
3 The new republican solidarity in the EMU
Some are critical of this recourse to the principle of solidarity,43 and indeed the republican path is neither legally nor politically self-evident. This is particularly true when comparing this path with the alternatives of an economic liberal or an intergovernmental (pluralist) understanding44 of the EMU and the Union. The EMU measures introduced by 2020 were compatible with all understandings, indeed they could be seen to be more in line with an economically liberal or intergovernmental understanding. The importance of responsibility, moral hazard and rule-orientation corresponded to the (economic) liberal understanding, while the transactional aspect, as clearly expressed in the Memoranda of Understanding and the contractual form of financial assistance, corresponded to the intergovernmental understanding. The focus was on the best possible aggregation and accommodation of divergent interests (donor and recipient countries) and the creation of a balance for the euro.
Of course, the measures from 2020 onwards build on previous steps. For example, during the eurozone crisis, the Union was already moving towards what we consider to be a republican EMU. Solidarity has been a major theme since 2009. From 2020 onwards, however, this dynamic is strengthened in a way that even goes beyond Scenario 5.
What is the impetus of republican approaches as opposed to economic liberal and intergovernmental approaches? The point of convergence of republican approaches is a conception of the common good that goes beyond the mere consolidation of competing positions and the protection of existing rules. For the EMU, this means taking collective decisions on what is in the public interest, i.e. in the common interest of all citizens of the Union in the area of macroeconomics. European republicanism puts Union citizens at the centre, as equal and free citizens, while conflicts are not to be understood, nor dealt with, as conflicts between Member States, but as conflicts within a society.
41. Judgment of the Court of Justice, Hungary v Parliament and Council, paragraph 129; judgment of the Court of Justice, Poland v Parliament and Council, paragraph 157. (fn. 12).
42. Ibid., Hungary v Parliament and Council, paragraph 129; Poland v Parliament and Council, paragraph 147.
43. Päivi Leino-Sandberg and Matthias Ruffert, ‘Next Generation EU and its Constitutional Ramifications: A Critical Assessment’, Common Market Law Review 59, 2022, pp. 433-472 (444-448) .
44. On the distinction, see David Held, Models of Democracy, Cambridge: Polity Press, 2006, p. 158.
European republicanism puts Union citizens at the centre, as equal and free citizens, while conflicts are not to be understood, nor dealt with, as conflicts between Member States, but as conflicts within a society
Developments from 2020 onwards therefore require a new way of thinking about the EMU.45 In the past, the prevailing view was that the role of the EU institutions, in particular the Commission and the ECB, was essentially to implement the macroeconomic rules laid down in the Treaties. Now, an understanding of the macroeconomic constitution is gaining ground, according to which the Union must develop its own macroeconomic policy, raise the necessary financial resources and spend them according to the principles of solidarity and mutual trust. On this point, the federal dynamic of the last five years goes beyond the federal scenario identified in the 2017 White Paper as Scenario 5.
The most important element still missing in this scenario is direct taxation by the Union (over and above customs duties). The Union’s additional spending capacity after 2020 is mainly based on loans that, according to the current arrangements, will ultimately need to be repaid by, basically, the Member States. This is more in line with an intergovernmental approach than a republican one, which would involve repayment through the Union’s own taxes. Accordingly, there is currently an intense debate that will certainly continue in the tenth legislative term.
V Outlook
During the ninth legislature, not all but many of the elements of the 2017 White Paper for Scenario 5 have been brought about. Importantly, during this period, the role of values has been radically strengthened and fiscal integration has surpassed what was imagined in 2017. Both developments reinforce the republican dimension of a Union and the idea of a European society, which we see as important elements for approaching the essence of Scenario 5.
45. On this debate, Markus K. Brunnermeier, Harold James and Jean-Pierre Landau, The Euro and the Battle of Ideas, Princeton, Oxford: Princeton University Press, 2016, p. 85 ff.
This does not mean that all is well: There are obvious shortcomings, for example in the future role of unanimity. Indeed, a shortcoming of the White Paper is its silence on voting methods, as well as on institutions, procedures and legitimacy issues. Any reflection on EU policy is deficient if it ignores the legal setting. The justification that ‘form follows function’ (p. 15) shows an instrumentalist understanding of law that does not do justice to its role in European society.
The path of the EU’s tenth legislative term should follow the republicanism of its ninth term, which offers a coherent and principled approach to the development of European society. This includes the follow-up of the reform of the Union as decided by the European Council of 14 and 15 December.46
46. European Council, European Council Meeting (14 and 15 December 2023) - Conclusions (General Secreatriat of the Council 2023), p. 6.