Lisbon Treaty and the road ahead

So it turns out that the Lisbon Treaty really is going to come into force (here, here and here), probably by the end of December or January, latest in February of 2010. That's nice! It means that the decision making in the EU will be simplified, that the European Parliament will have a stronger voice in that decision making, thus reinforcing (albeit only marginally the EU electorate would say) the democratic legitimacy of the EU. This will be done by decreasing the threshold for the approval of directives (EU legislation approved by the European parliament and by the European Council, tantamount to ordering countries to pass legislation that achieves a certain end, leaving it to the countries to find out what the most appropriate way is). Countries will be given a de jure opportunity to leave the EU and individual citizens of the EU will be able to present petitions to the European Union, for the proposal of new legislation. The EU will get 1 representative for foreign policy (and security BTW...) with rather wide ranging powers, although he will not be the boggey man that Eurosceptics would make him/her out to be. He will be no where near the president of the USA, but more like his secretaries of state or defence. Nonetheless there will be nothing resembling an imperial presidency of the EU, along USA lines. Indeed, the role of the permanent president of the council of the EU is still very much unspecified and there seems to only be some consensus that his or her influence will be shaped by whoever becomes the first permanent (only 2 and half years mandate renewable only once). Thus if a Blair type becomes the first president, he will try to shape it into some wide ranging position. If however a Juncker type would take over it would be a more discrete political role, building consensus and setting the agenda, which would be a good idea. As a matter of fact all that this treaty really does is to give more coherence to European institutions, and decrease the noise around the voice of Europe (by simplifying decision making and defining the division of labour within the EU better, once we'll know what the president does). Member states are still able to make a fuss, to posture and more importantly, to defend their constituents' interest.However, and until the next generation of EU treaties comes along, they will not be able to freeze European integration; at least not without a far reaching support for their position. Hopefully, by providing this new framework for decision making it will allow the EU to be a more determined government. Hopefully by decreasing the threshold for legislating it will make the EU more responsive to political concerns. "Hopefully", because there's a ton of things to take care of and the end of this constitutional soap opera eliminates a most distracting excuse. As Barber puts it, now is the time to turn to the daily business. Here is a prior discussion and beneath are some ideas: Fiscal policy - The SGP (stability and growth pact which regulates the size of deficits <=3%) is likely to be a rather deficient tool, although only the recovery from this economic crisis will tell. How can the EU sort its fiscal policy out? It needs to decrease fiscal deficits, while allowing for a system where in the face of economic contraction, it allows for deficits to rise in order to permit tax smoothing. The present SGP permits such a thing to happen, but it has three problems and one advantage: first, it is likely to be too lax, there are too many excuses for running a deficit. Secondly, it is a system where the states police themselves. For anyone who knows human nature and anyone who's studied delegation (eg: to central banks) or principal agent problems, it is obvious that humans very easily tend to follow an atomistic, myopic short termist behaviour, and as a whole or as a group we should not be trusted to regulate ourselves, as there will always be an incentive to break promises ex post. Moreover due to alliances in the EcoFin committee it has created an environment where legislation is not applied equally and where smaller countries endure and larger countries do what they please. Finally, the present arrangement of the SGP does not have much in the way of (European) parliamentary supervision. This may be right (given that national budgets are scrutinised by their respective national parliaments) or not (given the fact that there are externalities and spillover effects from one country's budget to the next), however somebody ought to seat down the economic thinking heads and figure out what could be done to make this process better and then someone ought to seat down the political thinking heads and ask them to figure out what the best course of action in order to approve that preferred process. The advantage that the SGP has is that it is flexible (enormously so). At the moment this has been good. Keynesian economics are very useful during a crisis. However, once the economy picks up it will be interesting to see whether the EcoFin committee will be able or even willing to coerce member states to decrease their deficits. A concluding remark on fiscal policy should say that in the present context of recovery economics it is better to run a little too high deficits than to run too little ones. Pollution - I know little about this, other than that if we don't decrease carbon emissions we'll cook ourselves to death like frogs and that if we don't find a sustainable and reliable way to diversify our sources of enegy, Russia will eventually reprivatise it's industries along national lines and we won't be able to do anything about it except pay the natural gas bill at the end of the year. (this is a very far fetched scenario until Russia develops anything close to a sustainable form of economic growth and development based on anything else than exports of raw materials) Foreign policy - Will the HRUFAS be able to create a better more coherent and far reaching foreign policy for the EU? Will there be a coherent approach to USA, Latin America, China, India, and (most doubtfully) to Russia? Will some countries prefer to abandon their diplomatic missions abroad and delegate this task to the EEAS? Or will it become more and more apparent that the national diplomatic missions are fundamental lobbies for the maintenance of contracts and export agreements from smaller European nations to non EU states. Will this mean that the nations will further decrease their diplomatic missions and specialise them in their trade targets? On another topic, how loud will the HRUFAS be in the defence of Human Rights? Security and Defence policy - What will happen to European military and security cooperation? One of the biggest problems is that different EU states have different weapons and military gear. This means that in the unlikely even that we go to war, French and British pilots will not be able to fly each others planes, or operate eachothers tanks. It decreases the size of the market and thus the economies of scale that can be derived from it. This is caused by the fact that military industries are still considered to be strategic national industries and that despite their security cooperation, European states still want to be able to develop armament independently of the USA and of each other. The biggest military contractors are german, british and belgian companies which face some competition from Belgium (I think) and Sweden ( or scandinavian conglomerate). Moreover, the majority of these industries have a monopoly-monopsony type of relationship with their national governments. Will we finally get a proper European procurement? Only if one way or another, these industries are given some protection, ie only if the EU and the national industries are able to come to an agreement where profits are not threatened and job losses are minimised, while countries still feel comfortable and safe in their defence. There is thus a triangle of interests, which must be protected in order for military integration to happen: National security - profits to investors in the arms industry - workers in this industry. What will the HRUFAS do? We shall see...