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As the May European elections are approaching for the 28 member countries, it is time to revisit the famous or rather infamous “democratic deficit” in European Union decision-making.

Singing Power to the People in Ancient Greece

Singing Power to the People in Ancient Greece

How democracy works in the European Union has shifted considerably over the last four years, when the Greek crisis erupted at the same as the new Lisbon Treaty entered into force. The Treaty changed the governance of the EU and was hailed as progress for democracy. Rightly so: it gave the European Parliament major new powers as a legislator. And it reinforced the Parliament’s capacity to overlook policy implementation by the Commission.

But the 2010 crisis made sure that the political action went elsewhere. The countries of the Euro Area came together to create new finance mechanisms under the firm and joint control of their Treasurers. This replaced their initial response of giving bilateral support to Greece. The European Central Bank pumped money in the banks and filled its balance sheet with state debt. The action went to the executives, and when the countries needed one voice to speak on their behalf, they asked the Commission to be an agent working outside of EU law, as part of the Troika of the IMF, ECB and the countries of the Euro Area.

A crisis needs a quick response. And it is natural that the immediate action to fight the crisis had to rest on those with financial capacity, i.e. the central bank and the national treasuries. The European Parliament was left largely with the legislation to prevent a future crisis by becoming tougher on banks and financial markets.

This story is a paradoxical twist to the classic way in which the EU’s democratic deficit has been debated. Many used to claim that the formal accountability mechanisms in the EU work perfectly well: the ministers in the Council are controlled by their national Parliaments, and the Commission is controlled by the European Parliament which is elected every five years. As Yale’s Robert Dahl argued, the EU has all the nominally democratic structures in place. The weak point was the absence of a public debate on what the EU does or, in political science jargon, the absence of a European “demos”. Dahl argued already long time ago that in the EU markets and bargaining between leaders determine the outcome more than the democratic debate amongst the populace.

But with the crisis and the survival of the Euro at stake, people have woken up. They now discuss what European leaders are doing more than ever before. People in Germany pay more attention to politics in other countries, because of the contagion risk. A problem in Italy can become a problem for Germany’s currency. So on the account of popular awareness, the democratic deficit has actually shrunk.

Of course, the increased awareness goes together with increased distrust towards the EU institutions. Today’s news is bad. But tomorrow’s news may be better, on the condition that the Euro Area finds a way to design joint accountability mechanisms rather than purely national ones, and that the increased political awareness of people can be turned into a more positive direction. Contrary to what some EU decision makers claim today, the crisis of the Euro zone is not over, so there will be plenty of opportunities for doing just that.