Comment

The European Parliament’s oversight powers in economic governance

This comment was published on TransCrisis.eu on July 31. 2017

The EU’s response to the European debt crisis has given rise to executive-dominated politics and a weakening of directly elected institutions, such as national parliaments and the European Parliament (EP). The increase in executive powers has led scholars to criticise the EU for moving towards executive federalism and a state of exception, undermining representative democracy.

The EP has largely been absent in key decision-making moments during the crisis, not least because the EU’s crisis response represents a patchwork of intergovernmental agreements adopted outside the EU’s legal framework, coordination efforts, and secondary EU legislation. Even on crisis legislation where the EP has enjoyed co-decision powers, its role has been constrained to agreeing to increase the discretion of executive bodies instead of playing a central role in the execution of that authority. For instance, within the strengthened excessive deficit procedure of the Six-Pack, the EP cannot determine the area of national competence to be controlled by the EU or the requirements and conditions under which they could be enforced. The EP has however not been an idle bystander to its limited role in economic governance.

The EP has gained formal oversight powers…

Some scholars argue that the EP’s limited role in influencing the substance of crisis legislation has partly been compensated by giving it more oversight powers. One example often pointed to is the introduction of the economic dialogue in the Six-Pack and Two-Pack, despite initial reluctance from the Council. The economic dialogue allows the EP to invite the President of the Council, the Commission, the President of the European Council, or the President of the Eurogroup to report on, and explain their decisions taken in the context of the reinforced Stability and Growth Pact and the European Semester. It also makes it possible to invite individual member states, breaching EU rules, to explain themselves.

These new oversight provisions – albeit voluntary in nature –indicate a greater emphasis on input legitimacy in Economic and Monetary Union (EMU), than before the crisis.

Research shows that the EP was successful in gaining more oversight powers because it used a wide repertoire of negotiating strategies. Among others, these include: (1) exerting public/normative pressure on other institutions (by arguing that deepened integration requires representation); (2) creating issue linkages between files negotiated at the same time (using its veto powers on one file to exert influence on another file for which its formal consent is not needed), and (3) playing on the urgency of solving the crisis and the difference in time horizons between the EP and the Council to threaten to delay decisions if its views are not accommodated.

…But how are the oversight powers used in practice?

One thing is to acquire new formal oversight powers in the legal text, another matter is how actively and diligently these provisions are used in practice.

My research on the economic dialogue with member states shows that only a fraction of member states qualifying for a hearing (i.e. in breach with reinforced Stability and Growth Pact) actually appear before Parliament’s economic and monetary committee (ECON). For instance in 2016, 10 countries were ‘eligible’ for being invited to a hearing, but only 3 hearings actually took place. Since the economic dialogue came into being in 2012, the ECON committee has held 15 hearings with finance ministers. This relatively low number may reflect both a low acceptance rate of invitations to hearings and/or limited resources and interests of the EP to hold more hearings.

Once appearing before the ECON committee, there is a clear pattern in the engagement levels of MEPs, in terms of the number of MEPs taking the floor. An analysis of 12 of the hearings with finance ministers that have taken place between 2012 and 2016 shows that MEPs are more active in taking the floor when the minister under scrutiny comes from a large member state and his/her country has received financial assistance from the EU.

Furthermore, MEPs from Eurozone countries proportionally asks more questions than MEPs from outside the Eurozone. There is also a clear national dimension to the engagement-levels. MEPs from the same country as the finance minister ask more questions than MEPs from other countries. On average, 61% of MEPs asked questions when they were from the same country but only 33 % of MEPs asked a question that are from a different country to the one being scrutinized. However, there is no significant difference between national MEPs from opposition parties versus those from governing parties. This suggests that there are differences in engagement levels depending on key characteristics of the country under scrutiny and the MEPs taking the floor.

The relatively low level of member states appearing before ECON compared with the number of ‘eligible’ countries brings to the conclusion that there is scope for making a more active use of the economic dialogue with member states to serve the purpose of a more democratically accountable European Union.