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posted on 15 May 2016

How Referenda Threaten The EU

from STRATFOR

Europe seems to be in a referendum frenzy these days. In early May, the Hungarian government confirmed its decision to hold a referendum on the European Commission's plan to distribute asylum seekers among member states. In April, Dutch citizens voted against the European Union Association Agreement with Ukraine in a referendum organized by a Euroskeptic organization.

In June, the United Kingdom will hold a crucial vote on whether to leave the European Union altogether. The three votes have a common denominator: EU citizens are essentially being asked to decide on issues connected to the process of Continental integration.

Considering the European Union's political and economic predicament, referenda are a very attractive tool to win the loyalty of voters. The democratic legitimacy of the European Union is being questioned, and moderate governments and their Euroskeptic opposition alike are turning to the voters for their own political gain. In the coming years, referenda will be proposed by three main sources - national governments, opposition groups and civil society organizations - and they will touch upon a broad range of EU-related questions.

An Interesting Paradox

The European Union has a tempestuous history with referenda. European governments have made many crucial decisions affecting national sovereignty without consulting the populace. The founding members of the European Economic Community (the European Union's predecessor) did not hold referenda when the supranational organization was created in 1957. Four decades later, the initial members of the eurozone did not ask voters their opinion before creating the currency union. Only Denmark and Sweden held referenda on whether to enter the eurozone, and people voted not to join it. The United Kingdom, in turn, negotiated an opt-out with its EU peers.

When nations have consulted their citizens, the results have many times tended against European integration. The Irish initially voted against the treaties of Nice (2001) and Lisbon (2008), which transferred more power from the national government to EU institutions. In both cases, Dublin negotiated concessions from the European Union before holding second referenda, which resulted in favorable votes for the treaties. In Denmark the treaty of Maastricht, which created the European Union, required a second referendum to pass in 1993 after people voted against it a year earlier. Perhaps the most notorious EU referenda were held in France and the Netherlands in 2005, when people voted against a plan to establish an EU constitution. Such strong popular rejection in two founding EU members caused the bloc to abort the project.

Whether the European Union is democratically legitimate has been a matter of debate for decades. Aware that transferring national sovereignty to unelected technocrats in Brussels could alienate voters, national governments decided to enhance the role of the EU Parliament, the only international organization whose members are elected by universal suffrage. The idea was that, by giving the European Parliament a greater participation in the Continent's decision-making process, the European Union would become more democratic.

But Europe's economic and political crises have exacerbated the debate over the bloc's democratic legitimacy, and governments are becoming increasingly nationalistic in response. With its impending referendum on whether to stay in the union, the United Kingdom is the most extreme example of this trend. But other countries are likely to make similar demands in the future. The referendum issue poses an interesting paradox: Asking voters to weigh in on European issues seems to be the most democratic way to reform the European Union - an arguably undemocratic institution. But as is usually the case, things are not as simple as they initially seem, and the practice could in fact weaken the bloc beyond repair.

Layers of Complexity

On the surface, referenda are the most formidable tool of democracy, giving voters a direct say on political, economic and social issues. They allow people to re-engage with the political process and give governments a popular mandate for major decisions that require a broad consensus. This explains why referenda are often used to reform constitutions or to make decisions on socially and politically sensitive issues (such as abortion or the death penalty).

But critics of referenda argue that they force voters to make decisions on complex issues about which they may not have complete knowledge. Referenda tend to create the illusion that complex issues can be presented in simple terms; the vote is often reduced to a binary "yes" or "no" answer. Referenda are also intimately linked to domestic political situations. Many citizens and political parties tend to see referenda as a vote on the government rather than on the issue under discussion, and the outcome is often determined by the economic situation or the popularity of the government at the time.

The European supranational government creates an additional layer of complexity. EU-related issues tend to be harder for voters to understand than national issues, and voters tend to more closely identify with and care about national rather than supranational issues. This means that voters often decide on EU referenda according to domestic political and economic conditions. Many of the French votes against the European Constitution, for example, were actually a vote against former President Jacques Chirac. The same happens with elections for the EU parliament; most political parties tend to campaign on domestic issues rather than on European issues. Thus, European Parliament election results are widely perceived as a barometer of the popularity of national governments.

EU-related referenda are also complex because of their impact on decision-making in Europe. Treaties need to be ratified by all member states before they become take effect, which means that in those countries where referenda are needed to ratify a treaty (such as in Ireland and Denmark), the entire process could be stalled because of the decision of voters in a single country. This creates enormous uncertainty about the feasibility of passing treaties, but it also gives countries temporary albeit notable leverage to negotiate concessions when voters vote no. Denmark, for example, received several exemptions from EU requirements after people initially voted against the Maastricht Treaty.

A Powerful Negotiating Tool

To a large extent, the current spate of referenda in Europe is a result of the upcoming British vote. London proved that referenda can be used to extract concessions from Brussels, but it also that the process of Continental integration can be frozen or even reversed with a popular vote. In the coming years, governments will probably use referenda (or, more likely, the threat of referenda) to demand concessions from the European Union, to justify domestic decisions, or to increase their own popularity. The net result of this situation will be to further distance EU member states from the centralized core in Brussels.

Naturally, not every country is in the same position to make demands. In 2015 the Greek government used a referendum against austerity to pressure its lenders to soften the terms of its bailout agreement with little success. In Hungary's case, the government will use popular opposition to the relocation scheme to justify its rejection of the plan in Brussels and to improve its popularity at home. But Hungary's position will be stronger if it coordinates its actions with other like-minded countries in the region. Larger EU members may feel more tempted than their smaller peers to threaten referenda, since they can inflict more damage on the European Union.

Euroskeptic political parties will also use referenda as a part of their electoral campaigns. The leader of the nationalist Freedom Party of Austria recently said Austria should be "governed via referenda" as Switzerland is. France's National Front has promised to hold a vote on the country's EU membership if it wins the presidential election in 2017. Italy's Five Star Movement has said it would hold a referendum on the country's membership in the eurozone if elected. Considering that France and Italy are the second- and third-largest economies in the eurozone, respectively, such referenda could finally doom the European Union. Promising to put EU-related issues to a vote helps these parties to soften their image, because a referendum looks less threatening (and more democratic) than the promise of unilateral action. Finally, interest groups or nongovernmental organizations may try to push their agendas in a similar way. But their options are more limited; only a handful of EU members have mechanisms that allow for citizens to organize referenda.

In Italy, referenda organized by citizens are binding, but only if voter turnout is above 50 percent. Most of the citizen-backed referenda in the past two decades were declared void because of low voter turnout. In the Netherlands, the threshold for voter turnout is much lower (30 percent), but the referenda organized by the public are not binding. However, even non-binding votes can put governments in awkward situations. The Dutch government is currently looking for ways to honor its promise to respect the result of a referendum in which people asked The Hague not to sign an association agreement between the European Union and Ukraine. Countries such as Croatia, Lithuania and Hungary also have mechanisms that enable citizens to propose a referendum.

Some countries have other mechanisms of direct democracy. In Austria and Finland, for example, people can force their parliaments to discuss a certain topic if they collect enough signatures. In late April, the Finnish parliament held a debate on the country's membership in the eurozone after a group of citizens collected signatures to force the topic. While the debate was not binding, citizens sent their government a clear signal that they are worried about the effect of the common currency on the Finnish economy. These discussions can be particularly awkward when, like in Finland, a Euroskeptic party is actually a member of the government and has to find a balance between its political manifesto and its coalition commitments.

The Upcoming Votes

There are plenty of issues in Europe that could be decided by a referendum in the coming years. Though a new EU treaty is very unlikely in the current political environment, any attempts to modify the bloc's legal framework would trigger an avalanche of referenda across the Continent. Euroskeptic political parties and organizations in Southern Europe, as well as more moderate governments, could threaten to put their membership in the European Union or the eurozone to a vote so as to demand concessions from Brussels on varied topics, including fiscal targets and debt restructuring. Euroskeptic forces in Northern Europe could push for referenda to resist measures that undermine their national wealth.

Separatist movements in places such as Catalonia, Scotland and Flanders will continue to push forreferenda for more autonomy or for outright independence. Regional or municipal governments can resist EU plans to allocate asylum seekers in their territories by putting the issue to a vote. Cyprus' Greek south and its Turkish north are once again negotiating to reunify the island, but any agreement will have to be ratified by both sides in a referendum. (In 2004, Greek Cypriots rejected a U.N.-backed plan in a referendum.)

Referenda can also affect international affairs beyond the European Union. Popular pressure could force governments in several EU nations to hold a referendum on trade agreements such as the Trans-Atlantic Trade and Investment Partnership. Countries like Finland and Sweden are unlikely to join NATO without a referendum, and Austria and Ireland are not planning to join the military alliance any time soon, but if they did, a referendum would be difficult to avoid.

These votes will probably be held against the backdrop of growing nationalism and fear of globalization. They will almost certainly be influenced by the political and economic situation at the time of the vote and will be subject to populist manipulation from both the organizers and their opponents (something true of most elections). The alleged attempts to solve the European Union's crisis of representation could therefore contribute to the bloc's weakening.

"How Referenda Threaten the EU is republished with permission of Stratfor."

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