DP2623 EU Reforms for Tomorrow's Europe
|Author(s):||Richard Baldwin, Erik Berglof, Francesco Giavazzi, Mika Widgrén|
|Publication Date:||November 2000|
|Keyword(s):||Accession, ECB, EMU, Enlargement, European Union, IGC, Institutional Reform, Political Economy, Qualified Majority Voting|
|JEL(s):||D70, D71, E58, E61, F15, F36|
|Programme Areas:||International Macroeconomics, International Trade and Regional Economics, Transition Economics|
|Link to this Page:||cepr.org/active/publications/discussion_papers/dp.php?dpno=2623|
This Paper contributes ideas and analysis to the ongoing EU reform debate. It consists of three distinct parts: voting in the Council of Ministers, restructuring the ECB's Governing Council, and the setting of enlargement 'examination' dates. The IGC currently focuses on Council voting, Commission composition, closer co-operation and the range of issues to be covered by qualified majority voting. Part 1 of our paper evaluates Council voting reform proposals with quantitative tools from voting game theory. We find that only the 'dual simple majority' plan maintains decision-making efficiency and democratic legitimacy in an EU 27. We believe, however, that the impact of enlargement on the ECB's Governing Council merits also discussion in Nice. We demonstrate that an expanded Governing Council with its current structure would be unwieldy and plagued by decision-making difficulties that would prevent it from making hard choices at the right time. Financial markets could react negatively to the possibility of a dysfunctional ECB; the Nice summit should request the ECB to propose some solutions. Finally, we argue that undertaking these reforms before enlargement should be a priority, not a precondition. Specifically, the EU should now commit to firm accession 'exam' dates and signing dates (for those who pass); this should be done both for the earliest enlargement and for subsequent waves since this would stimulate incumbents and candidates to undertake the necessary reforms while ensuring that the first enlargement does not delay the second.