Next Generation EU: How Creative Responses Can Empower Parliaments in the Crisis-Driven Era of the Executive

On 19 October, 12 network members of the Open European Dialogue (OED) from Italy, Germany, Greece, Portugal, Luxembourg, and Spain, joined a call initiated by their colleague Damian Boeselager, Member of the European Parliament. The participants engaged in a discussion that was framed by the question: how can parliamentarians make sure that they are not sidelined in the process of designing, disbursing, and evaluating Europe’s answer to the Covid-19 crisis?

Intergovernmental Crisis Response

Participants voiced the concern that the Next Generation EU package, a deal between EU member states to mutualize debt in order to finance large grants and cheaper loans necessary for rebuilding the economy of Europe after the Covid-19 crisis, has been a largely intergovernmental affair thus far. While the European Commission was the first institution to issue a proposal for joint action, it was the member states that determined the details, changed the proportions of loans and grants, and decided on the mechanisms to ensure compliance with the rules of the recovery instrument.

Sidelined Parliaments

The European Parliament (EP) has been consulted and passed a resolution on the proposal. It also formed part of the trialogue negotiations with the European Council and Commission, but apart from issuing its opinion on the planned legal act, it has little influence on the distribution, use, and controls of money flows.

Similarly, national parliaments have no legally binding role in the disbursement of the EU funding, even though it is their governments that decide to pool resources, commit to repaying long-term loans, receive and distribute the largest stimulus package in European history — and answer to the Commission in cases of suspected corruption. Practically, national parliaments will in many countries have to ratify the approval of the Next Generation EU program as such; in some countries, they were involved in drafting the spending plans that their governments have to submit to the Commission when applying for funds; but thereafter, they have little formal influence on what the money is used for and how.

This is particularly problematic for parliamentarians, as they typically derive most of their hard power from controlling the budget and being able to monitor their governments’ spending.

Solutions Are Not Easy to Find, But Available

On the OED120 call, three possible strategies were outlined by participants to prevent the sidelining of parliaments.

Integrating Next Generation EU money in national spending plans grants parliament full budgetary control over them.

A German participant commented that in their country, parliament will have the usual full control over the spending of the Next Generation EU funds as they are part of the government’s overall spending plan to mitigate the crisis. However, this practice also evoked critical responses among the participants as it subsumes the EU’s effort to reshape the economy in the longer term under national economic recovery goals, which might lead to conflicts.

Pushing for formalized EP control over spending.

According to one participant, members of the European Parliament are trying to establish that alongside the Commission, the Parliament must be included in the reviews of national spending plans and even be able to proactively intervene if money is misused. Their argument holds that the sums in question are European resources over which the Parliament exerts control.

Publicizing parliamentary support for the Commission’s and EP’s intentions to not only check for corruption, but the rule of law when disbursing funds.

Member state governments were pressured to re-adopt provisions making the independence of the judiciary a prerequisite for disbursing EU funds to a member state, a proposition which was previously backed by the Commission and EP but much less so by governments in the Council. A participating member of parliament was instrumental in creating a network of national parliamentarians supporting the EP and Commission demands. She advertised her network on the call and won additional support. The outcome of this effort, combined with those of many others, was the review of the Council position.

These are only a glimpse of the creative initiatives that parliaments may come up with to assert their own powers in these times of executive decision-making. In this sense, the OED120 grew beyond its function as a space for exploration to become a marketplace of ideas for parliamentarians under pressure.