1. Transforming the European Union: The treaties & the institutions
Transform! Europe
Navigating the Left’s Strategies
vis-à-vis Europe in Times
of Multiple Crises
Vienna
Transforming the European Union:
The treaties & the institutions
17 October 2017
10:50-12:20

2. Changing the Treaties to Democratize Economic Governance
John Weeks
Progressive Economists Group
London

3. What are
we trying to save?

4. A European Union in which economic policies are determined democratically
so national governments & the European Union can implement policies in the interests of the vast majority of citizens.

5. What do we have?

6. non-democratic procedures.
A European Union in which neoliberal economic polices are treaty-embedded
& implemented through
non-democratic procedures.

7. Authors: Jeremy Smith & John Weeks

8. Rosa Luxemburg Foundation
March 2017
with the support of the
Rosa Luxemburg Foundation
For their advice and contributions we thank
Antonella Stirati and Engelbert Stockhammer.

9. Major points Ideological bias in treaties
Our study provides article-by-article changes
Unsound design of economic rules
Rules for the wrong reasons
Undemocratic application & enforcement
Existing rules technically wrong
Examples: Public debt & fiscal deficit
De facto flexibility vs Different Rules

10. Problems of Economic Governance
1. EU purpose, amend TEU, Article 3.3
2. Requirement to join euro zone
3. Governance & mission of ECB
4. “State aid” & industrial policy
5. “Maastricht rules”
debt, deficit, inflation
6. Internal trade imbalances
7. Capital mobiliy
8. “4th Freedom”, open bidding on state services
9. Tax harmonization

11. Public debt: treaty flaws
Wrong measure (gross, net, net of publicly held debt)
Wrong analysis (public debt simultaneously private asset)
Wrong problem (danger is private debt)

12. General government gross & net debt, 20 EU member countries 2015, % of GDP

13. General government gross, net & net non-government debt 9 EU countries 2015, % of GDP

14. Fiscal Balance: Treaty flaws
Wrong measure (primary not overall)
Wrong analysis
fiscal deficit is not a problem, it is solution to sound economic management

15. Overall & primary fiscal balances for 20 EU member countries 2015, % of GDP

16. De facto flexibility vs Different Rules
Problem not the rules/treaties
Everyone breaks them/“work around” argument
Changing treaties too difficult to be practical
Problem is the rules/treaties
Country size – the powerful & weak
Problem of asymmetry
Current rules do not address real problems of economic political integration
“Hostages to fortune”

17. To reform the European Union
Re-write the treaties

18. a social democratic Britain
Policy proposals for
a social democratic Britain