It Still Flies

In these pages two weeks ago I concluded an article on the European Union with the observation that “so far it flies,” quoting from one of the books under review, Redrawing the Map of Europe by Michael Emerson. Barely had those words been printed than the Union—or a main part of it at any rate, the European Commission—hit an air pocket. In the early hours of March 16 all twenty commissioners, who together make up the Union’s permanent policymaking body, and who head its civil service, resigned en masse. Where the center of Europe ought to have been, there was suddenly a great big hole. It was plugged temporarily by the commissioners’ continuing to serve as “caretakers” until national governments, who appoint them, could choose a fresh set. At a summit meeting in Berlin on March 24, leaders of the Union’s fifteen governments agreed to invite Romano Prodi, a former prime minister of Italy, to take over as the next Commission president and to form a new Commission as soon as possible.

There was no precedent for these events. But then the history of the European Union goes back a mere forty years and there is no precedent for a lot of the things that happen in Brussels. Some people may have foreseen this latest upset. I manifestly did not. And it was clear from the thunderstruck face of Jacques Santer, the Commission’s president since 1995, that he was equally amazed at the course events had taken, despite being nominally their master.

The brief explanation is that the commissioners resigned because they had exposed themselves to the verdict of a committee appointed by the European Parliament in January to investigate “fraud, mismanagement and nepotism” in the Commission (to quote from the committee’s terms of reference). This ad hoc group of five investigators—all past or present senior public servants, from Sweden, Holland, Belgium, France, and Spain—published a report on March 15 accusing the commissioners of supervising their agencies, staff, and spending programs so loosely that in some areas corruption was endemic. It gave six examples. They included a program launched in 1989 to stimulate European tourism, which had lost more than 10 percent of its $50 million budget to theft. A job-training program was so riddled with petty frauds that the investigators needed twenty close-typed pages to describe them all.

All this made for entertaining reading. Britain’s Europe-hating newspapers splashed the grisly details across their front pages as proof positive that the European Union was indeed a conspiracy of corrupt continentals in which Britain should have no part. Yet, on more considered reading, the resignation of the entire Commission was not self-evidently the necessary response to the bare facts contained in the report. Other factors were at work.

Fraud and waste have been a problem for decades at the margins of the EU’s budget, which amounts to almost $100 billion a year. Each year the Union’s auditors produce a gloomy report showing how several billion dollars are missing. Since roughly half the budget is earmarked for farm subsidies, the typical source of fraud, as I pointed out in my original article, is the overstatement of crop yields or acreage. This has tended to be accepted as a scarcely avoidable cost of the enterprise—what store managers would call “shrinkage.” Each year the European Parliament grumbles about the Commission’s lax financial management when it is asked to “discharge” (approve) the EU accounts. But, as a rule, it votes to approve them.

In January this year the Parliament was debating a discharge for the 1996 accounts. The mood was unusually animated because a whistle blower in the Commission’s audit services had supplied some members of Parliament with a fat dossier of supplementary allegations. These got close attention because the approach of parliamentary elections in June has made members of the Parliament more than usually keen to attract publicity, and because Mr. Santer was responding to the Parliament’s questions with an extraordinarily ill-judged disdain. Several party groups proposed using the Parliament’s sole, crude, and potent weapon for rebuking the Commission: this was a vote of censure which, if passed, would dismiss the commissioners en masse. Censure had often been threatened in years gone by; it had never succeeded. But to head off the risk on this occasion, Mr. Santer agreed to the committee of inquiry, a tactical error of historic proportions.

Some of the report that emerged was the sort of anodyne stuff to which Mr. Santer was presumably resigned. Most of the problems on which the investigators fixed dated back five and even ten years to the previous Commission headed by Jacques Delors. As everyone knew, the Santer Commission had allowed bad habits to persist or made only ineffectual efforts at changing them. None of the “scandalous” material was a surprise to insiders: on the contrary, it came mainly from the files of the EU’s audit and antifraud units. The investigators’ willingness to criticize commissioners directly was a dramatic new element, but only one commissioner was seriously rebuked. This was Edith Cresson, a former prime minister of France, who oversaw science and education. The report accused her of appointing an old friend, a dentist, to a fictitious advisory job for which the friend was paid about $4,500 a month from EU funds. She was also the commissioner responsible for the fraud-riddled training program. The investigators blamed her poor supervision of it, but found no evidence that she had profited personally.

Thus far there was a strong case for Ms. Cresson’s resignation—and, at the limit, for that of Mr. Santer too, as the man with whom the buck stopped. Ms. Cresson’s scalp was the one that angry members of the European Parliament really wanted: they thought her arrogant and feckless. But Mr. Santer and Ms. Cresson both disputed the fairness of the report when they saw it. Neither was prepared to go quietly.

There was, moreover, a lethal sting in the tail of the report. The investigators declared, somewhat arbitrarily, that the commissioners as a group had shown “a loss of control…over the Administration that they are supposedly running.” They said that a code of “collective responsibility” was leading in practice to a refusal of personal responsibility. When publication of the report put these damning phrases into the public domain, followed by a refusal from Mr. Santer and Ms. Cresson to absorb the blame, it was only a matter of time until parliamentary leaders moved a censure vote which had every chance of succeeding. Rather than waiting to be sacked by the Parliament, all twenty commissioners, the blameless along with the tainted, chose to tender their collective resignation.

The drama has been commonly read as a high triumph for the Parliament, and as a devastating blow for the Commission as an institution. It may be the first of those things; it need not be the second. The Parliament has had its moment of glory. But it is still a crude, unruly institution with only one big political power—that of censuring the entire Commission—which it cannot use too often or else it will bring down the whole of the EU machinery around its ears. The Parliament is directly elected (unlike the commissioners) and hence may have a potentially much larger moral and even political authority. It will gain more power over legislation, and a veto over the choice of Commission president, when a new EU treaty, the Amsterdam treaty, comes into force later this year. But the present reality is that the Parliament remains a very long way yet from having the expertise and sophistication needed to function as anything more than a weak check on the way that Europe is managed. That said, if the past fortnight’s events lead voters to take the Parliament more seriously, to hold it to higher standards, and so to make it a more constructive force, then that is a long-term trend to be applauded unreservedly.

The more immediate consequence of the recent crisis, however, will be a resolve on the part of the national governments to secure a European Commission which is more efficient, more politically astute, and far better at its public relations than the Santer Commission was. This will mean, in large measure, choosing a Commission president with proven ability at handling real power. (Mr. Santer had been a prime minister, admittedly, but only of tiny Luxembourg and its 416,000 population. He got the job because Britain was in a sharply Euroskeptical mood under its previous prime minister, John Major, and wanted a weak Commission. Major vetoed a much stronger candidate, the Belgian prime minister Jean-Luc Dehaene.) It will also mean choosing a Commission willing to learn from the Santer Commission’s mistakes.

The next Commission will be expected to proclaim and even pursue a zero-tolerance policy against corruption; to make a show of openness in its workings; to declare its accountability to the public; and to try to explain itself better to that same audience. It will also be expected to befriend the Parliament, instead of provoking it as Mr. Santer was prone to do.

Governments will want the next Commission to be strong, because the shock of the Santer Commission’s collapse has reminded them just how far their national interests have come to depend on the good functioning of the European institutions. Among other things the European Commission manages Europe’s foreign trade, farm industries, and antitrust law, and handles development programs worth up to 3 percent of the poorer countries’ GDP. The new common currency, the euro, survived the crisis little-scathed because the foreign exchange markets proved willing to credit the political independence of the new European Central Bank, and to presume that the problems of the Commission would have no impact there; but even so, the euro will be best served by a stable political hinterland.

The current European leaders will also be ready to help the next Commission when necessary (in eliminating fraud, say, or enforcing trade rules) much more readily than they ever were inclined to help Mr. Santer. They will do so because the next Commission will be their creation, their responsibility—whereas the Santer Commission was merely a partner they inherited from the past. Only two of the EU’s fifteen current leaders (Mr. Dehaene and Poul Rasmussen of Denmark) were already in power in July 1994 when Mr. Santer was chosen for the presidency.

And, not least, the new commissioners may arrive at the moment when a change in the vocation of the Commission becomes apparent. The economic integration of Europe, culminating this year in the introduction of the single currency, has abolished any clear division between national politics and EU politics. The result is that national governments have discovered themselves in less and less need of a separate, specialized, “supranational” body, the European Commission, to take the lead in Union policymaking. They have acquired the taste and expertise for doing that themselves. They, not the Commission, have been doing the big thinking lately about tax harmonization across Europe, about pan-European economic policy in the wake of the single currency, about a common foreign and defense policy. The sudden collapse of the Santer Commission’s political authority may well encourage the view that the Commission should now assume something much closer to the role of a classic civil service, shedding much of its claim to make policy. It should be strong in administering Europe’s rules, and policies, and budget programs. But the political center of the Union will shift away from the Commission toward the Council of Ministers, where representatives of the fifteen national governments meet.

This, if it happens, will be good for democracy. It will mean that European policy is reclaimed by elected politicians. And it will also be good for European integration. European voters still identify politically with their national governments much more than they do with any of the European institutions; and national governments have too much invested in the European project to give it anything less than their best efforts at this delicate stage. A shift in power away from the Commission and toward national governments acting collectively may thus be the evolutionary step needed to keep European integration moving forward. The Santer Commission may have crashed to the ground—but Europe, yes, it does still fly.

—March 25, 1999