Thursday, October 07, 2010

Illusionary democracy?

We've looked at this issue before, but the Swedish Parliament, the Riksdag, yesterday supported its finance committee in protesting against the Commission's proposed amendments to the Deposit Guarantee Schemes Directive, which would oblige member states to transfer money to another member state's deposit scheme, if that scheme had run out of money. The Riksdag said this would create a moral hazard, as some countries could be tempted to under-fund their schemes, knowing that someone else would ultimately pick up the bill. The German Bundesrat has also objected to the proposal and today the lower house in Germany, the Bundestag, will give its opinion on whether it will formally object to the amended Directive.

This is the first time that national parliaments have tried to use their new 'powers' entailed in the Lisbon Treaty. The Treaty gives parliaments the right to oblige the Commission to re-consider - but not scrap - a proposal, if a third of national parliaments object to the proposed legislation on subsidiarity grounds, within an eight week window. As even Andrew Duff - the liberal MEP who has been a staunch defender of the Lisbon Treaty - has admitted, the Lisbon provision on national parliaments was never intended to be used in practice as it's very difficult to get nine parliaments to debate and then object to a piece of legislation within such a narrow time period as eight weeks.

And the task of getting nine parliaments on board looks very tricky indeed. The deadline for national parliaments to object to the Deposit Guarantee Schemes Directive is 25 October, and according to the "Interparliamentary EU information Exchange" so far only six parliaments have even begun scrutinising the proposal. Typically, the eight week period comes smack in the middle of parliamentary recesses in most countries, making the task even more difficult (although the Commission generously discounted August from the period).

It's hard not to see this provision as mere illusionary democracy, which the EU elite inserted into the Lisbon Treaty to be able to make the case that 'everyone wins'. But still, it's good that national parliaments are giving it a shot.

Surely, the UK Parliament should object too, given that the reservations concern moral hazard, transfer of funds between member states and subsidiarity?

1 comment:

mathew said...

Thanks for investigating this procedure. I checked IPEX and find now that 19 parliaments have partially or completely scrutinised this proposal, with 2 (UK, Sweden) objecting on grounds of subsidiarity.

As I point out in my post, this would seem to indicate that 8 weeks is probably enough, given that some parliaments may scrutinise a proposal and not upload anything to IPEX.

However, this is based on the assumption that what we see on IPEX today is the situation as of October 25. I don't know if this is a correct assumption to make - can an IPEX dossier be updated after the subsidiarity deadline has passed?

- Mathew

PS It's a bummer that one cannot subscribe by email to comments to a particular post on this blog. Will try and remember to check back...