Hans-Werner Sinn

Nationalökonomie & Finanzwissenschaft

Ifo Viewpoint

Ifo Viewpoint No. 20: Chaos in Nice

Munich
20 December 2000

A constitutional assembly can only properly function behind a "veil of uncertainty", with its members not knowing how they themselves will be affected by the individual regulations. If one attempts to write a constitution with the veil of uncertainty already having been lifted, it is no longer possible to reach any general or non-partisan decisions unless the members display statesmanship and do not take their own situations into account. This was perceived by the philosopher John Rawls, and this also follows from Immanuel Kant's categorical imperative. The undignified haggling over voting rights that took place in Nice made mockery of the fundamental principles of constitutional theory. The organisers of the conference knew all too well from which decisions they themselves would profit; they were far too anxious about their own benefits.

Before the Nice summit, many hoped that the European Commission's suggestion of implementing a double majority would be considered. This proposal called for majority decisions consisting of both a simple majority of countries as well as a majority of the people they represent. A number of smaller countries with small populations would have had the same blocking majority as the few large countries with large shares of EU inhabitants. This would have brought about a situation similar to a two-chamber system in which the one chamber represents the population and the other the countries. The smaller member states would be protected and the inhabitants of the large states would also be treated equally.

This proposal was blocked by France with the argument that this would give too much weight to the population criterion and hence to Germany. Instead, the Nice summit host succeeded in pushing through its own concept, resulting in a barely intelligible two-phase voting system full of "twisted" and arbitrary numbers. The member states were allocated numbers of votes that rise disproportionately to population size based on no apparent regularity. Two countries, Germany and Romania, are expected to put up with considerable vote deductions, completely inconsistent with the other allocations, thus turning their inhabitants into second-class EU citizens. Two others, Spain and Portugal, received very generous treatment. Moreover, differing percentage blocking minorities were decided that make no sense, however hard one tries.

With regard to blocking minorities, there is still no clarity one week after the conclusion of the treaty. It is clear that the blocking minority according to the population criterion is 38%, but the size of the blocking minority in terms of the votes criterion is still unsolved. Not only have leading newspapers given contradictory reports on this point; even the official English version of the treaty offers a potpourri of possible numbers in the event of EU enlargement. In Annex II of the Treaty of Nice (Declaration on the Enlargement of the European Union ...) a majority of 258 votes is required for decisions, which, with 345 total votes, implies a blocking minority of 88: In Annex III (Declaration on the Qualified Majority Threshold ...) 73.4% is given for a qualified majority, which implies a blocking minority of 92 votes, and shortly thereafter the number given is 91 votes. Only for the present EU is the voting criteria with a blocking minority of 68 votes or 28.7% clearly established; the rest is unclear. Pure chaos must have prevailed at the Nice summit.

Whatever the participants intended, a blocking minority based on the population principle has been stronger degraded, if a considerably higher value (38%) has been set for it than for a blocking minority based on the votes criterion, which depending on EU size and treaty interpretation lies somewhere between 28.7% and 25.5%. Because of the arbitrary spread in the percentage rates, there are only few country constellations in which an effective blocking minority can be built up on the basis of the population criterion. In almost most cases the blocking minority based on the votes criterion takes priority before the blocking minority based on the population criterion. Germany with the largest population in the EU was given an optical concession that alludes to the double majority proposal made by the Commission but which in reality is meaningless.

The European Union has emerged out of numerous compromises, which have often made little sense to critical observers. Those patched together in Nice place everything that has come before in the shadows. The petty tug-of-war over voting rights has yielded no general rules that meet the demands of common sense, not to mention the principles formulated by Rawls or Kant.

Hans-Werner Sinn
President of the Ifo Institute