Open Europe Blog

It has been coming down the road for some time but what we once called the “Lisbon Treaty’s ticking time bomb” has finally gone off. The eurozone will now have a ‘Qualified Majority’ in the EU Council, meaning that any UK attempts at forming last minute blocking minorities will now be that bit harder.

Eurozone gains a majority in the Council (old rules left, new rules right)

What are the new rules? 
There are two key differences (contained within Article 16 (4) here) whose effect can be seen on the diagram above:

  • The first is the lowering of the winning vote threshold to 65% as seen by the red arrow. 
  • The second major change is that the voting weights will now be recalculated each year according to a state’s population, as calculated by Eurostat, giving greater weight to larger states (the majority of which are in the eurozone).
  • There is one important caveat – as a concession to Poland, at any point until 31 March 2017 a state can request a specific vote is done by the old rules (on the left above) even though the new rules are now the norm.

How damaging could this voting change potentially be?
It goes without saying that the eurozone is not a cohesive block, and interests within the EU cut across the eurozone / non eurozone divide. However, that being said, given increased coordination within the eurozone due to the crisis there is a real danger that, where the eurozone has a collective interest, pre-meetings between eurozone states will become the final decision making body in the EU and could allow a eurozone ‘caucus’ to emerge. If that happened the UK would be placed in an invidious position.

The danger is real but not all is lost, on some issues the UK could still remain within a ‘Qualified Majority’. For example, a block of economically liberal net contributors – dubbed the Northern Alliance – of Germany, The UK, The Netherlands, Sweden, Finland and Denmark would still (just) have a blocking minority of 36%. This alliance could use its influence on issues such as the EU Budget (as it has done before) and the US/EU free trade negotiations (and could well play an important role in helping to keep the TTIP alive).

There is also a positive sign that the non-Euro state’s legitimate interests are being recognised. Open Europe has long proposed a system of “Double majority Voting” whereby EU laws have to gain a majority of ‘Ins’ as well as ‘Outs’, in order to prevent eurozone caucusing. Such a mechanism was recently adopted by the European Banking Authority. Furthermore, there is a wider acceptance of the need to offer those outside the eurozone, such as the UK, safeguards on certain issues – as demonstrated by the recent article by the British and German finance ministers in the FT.

The change in the voting weights and procedure is a subtle but important shift. It certainly opens the door for eurozone caucusing and makes it harder to get over the already high hurdle of forming a blocking minority on issues which do not sit well with certain member states. That said, awareness of the threat has grown along with acceptance that a new balance needs to be found between eurozone ins and outs. This should help mitigate the impact but it will still be important to watch how this develops.

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