SOAS Research Online

Abstract

Despite its commitment to democratic values, the European Union does not permit a full range of legitimate democratic choice in the economic sphere. Because so much of the EU’s economic policy is embedded in its Treaties, which can normally only be changed if all member states agree, there is a growing sense of frustration that the democratic will of Europe’s people cannot be expressed if on any point it differs from that set out in the Treaties. The Treaties impose a very specific – and highly contested – economic ideology, which has been described as “ordoliberal.” To address this problem, this study offers a short set of essential amendments which would make the terms of the EU Treaties more policy-neutral in the economic domain, and so enable the EU and Member States, within their respective remits, to define and implement economic policies that are democratically chosen and appropriate to the circumstances and needs of their citizens. We have not sought to change the basic structure of the Treaties or their foundational principles. For the purpose of this paper, therefore, we have taken as “given” the general framework of the internal market, and the “four freedoms” within that market (goods, services, workers, capital), but provide for some modest democratic discretionary space, e.g. in relation to state aid. We consider, however, that the internal market and the single currency are not ends in themselves, but must always be seen as means to the end, which is the prosperity and welfare of the peoples of Europe. Our proposed amendments are divided into ten categories, some of which are much more extensive than others, depending on the subject-matter. These cover: The economic, employment and social protection objectives; general economic policy provisions; the European Central Bank’s role and mandate; beneficial trade; managing capital mobility; rebalancing provisions on liberalisation; state aid discretion; taxation; industrial and investment policies; public services.