Exploring the business end of a constitution

Date: 16/09/04

Businesses across Europe should come out fighting in support of a constitution that will improve competitiveness, believes Andrew Duff

EUROPEAN business has given the new constitution a less than wholehearted welcome. At one level, there are companies whose affiliations are less European than American and whose reactions reflect that of US neo-conservatives who imagine the Convention was a clever anti-US machination. More sensibly, certain trade associations and employer organizations have tried to keep tabs on, and influence, the constituent process. Others have taken refuge in the belief that, unlike the single currency, constitutional questions do not matter much to business.

As governments and parliaments across the Union now embark upon the tricky campaign to ratify the constitution, it is high time that European business sat up, took notice and engaged itself in the wide public debate that needs to take place if the constitution is to attain the legitimacy it deserves.

The key question that needs answering by advocates of the constitution is what it does to improve the quality of regulation affecting commerce. Much attention has been paid to the enhanced role of national parliaments in verifying the correct application of the principle of subsidiarity.

However, whereas the constitution merely permits the intervention of national parliaments in the early stages of the EU legislative process, it lays down new specific obligations as to the role and function of the European Commission.

In this respect, the Convention consolidated the parallel discussions about improving the EU's regulatory environment. Under the constitution, the Commission, in drafting new law, will have to consider the regional and local dimension. It will have to assess the financial, regulatory and environmental impact of its proposals and justify itself on all these grounds more fully and systematically. The executive's success in this is a more important factor in ensuring compliance with the principles of subsidiarity and proportionality than is the role of national parliaments.

The constitution also carries a new category of secondary legislation, called the "delegated regulation". This enables the Council of Ministers and European Parliament to leave to the Commission elements of legislation that do not comprise essential political choices. Both branches of the legislature will have to monitor the executive's use of the delegated regulation and, if necessary, call back the delegated law.

This will allow ministers and MEPs to concentrate on the politics of lawmaking, without becoming engrossed in minute technical details.

Although the constitution does not go as far as many of us would like in separating the executive from the legislature, one step forward is the reform of comitology procedures; the mechanism for managing the implementation by member states of EU law will be set out in a new law, jointly agreed by the Council and Parliament.

The constitution promises better legal certainty and stronger compliance. In a modest, but for business significant, widening of the scope of judicial review, companies will be able to seek redress in the EU courts against regulations that directly and adversely concern them.

These and other constitutional reforms, such as the extension of qualified majority voting in the Council, are of huge importance for Europe's business. Making a success of the constitution will improve competitiveness. Business should come out fighting for the constitution.

• UK MEP Andrew Duff is the spokesman on constitutional affairs for the Alliance of Liberals and Democrats for Europe.

Where there are rules there are power struggles - and the text of the constitutional treaty makes this situation worse, argues Pervenche Beres

THE EU's constitutional treaty is a reflection of the socio-economic relations between the members it hopes to unite. That is not a particularly original thought, but from it we see that the real question is not whether the proposed text is too liberal but how far we have come in building Europe, how that has been achieved, why it is currently a problem, particularly among the left-wing electorate, and how to remedy this problem.

It is historically false to think that a constitution merely lays out how institutions should work and defines the tools that will put in place those policies decided in accordance with the outcome of an election.

As Marx might have said, where there are rules there are power struggles. This situation is made worse with the text we have produced - because it puts institutional and political relations into one document, any revision of which requires unanimity. That is why the constitutional treaty prohibits state aid and any barrier to free movement, but maintains the unanimity rule in the fields of taxation or social policy.

Historically, Europe has been built on the belief that its reconstruction and the return to economic growth depends on bringing down frontiers, the free movement of goods, services and people - and the power to move in this direction has been entrusted to the European Commission. The initial assumption has been further exaggerated by globalization. The constitutional treaty's target to achieve "fair and free competition" has merely been copied from the [1957] Treaty of Rome. But some people appear to think they discovered it in drawing up the new treaty.

The way in which this concept has been disproportionately used since the EU was created, via regulations and the collective management of European public funds, means we can say that Europe today is essentially liberal. This is the basis for the constitutional project and this is what a growing number of European citizens, largely from the left, are now protesting against.

The drafting of a text subject to ratification makes this imbalance even more visible. Until now, when European citizens had to voice an opinion on new texts, either directly or via representatives, they only had to consider improvements or amendments to an original treaty. This time, because we are talking about one constitution that brings together existing texts, they will have to revalidate the entire project, even though they are becoming more and more critical of the way in which it has been drafted.

The situation is made worse by the rule concerning policy amendments. The problem is not whether a treaty is amended by unanimity or not, but that with 25 voices, any reform or revision of the constitution will be virtually impossible.

This is worrying.

It is not the constitution that is liberal but the foundations of the EU that are unbalanced. That is why the stage- by-stage consultation proposed by French former prime minister Laurent Fabius is so important. If the future constitution is to be applied in conditions where the goal to create a "social market economy" is not just lip service, the Stability and Growth Pact must become a tool to help the Lisbon Strategy. But it is not just about competitiveness, despite what the liberals think. The EU's budget to run from 2007-13 must fund the Union's solidarity, but also research and training. In short, spend for the future.

• French Socialist MEP Pervenche Beres is chairwoman of the European Parliament's economic and monetary affairs committee.

Two MEPs' (Andrew Duff and Pervenche Beres) opinion on whether the Constitutional Treaty for Europe is good or bad for competitiveness.