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A structural majority of the Eurozone in the single market?

Next year, the power balance in the EU decision-making on the single market and other related subjects shifts substantially, as the decision-making procedure in the Council is changed to a system based on the double majority of states and population. From the perspective of game theory, I was curious: With four of the six largest EU member states (Germany, France, Italy, Spain in order of population size) within the Eurozone, would the combined voting power of the Eurozone change, e.g. when voting on single market issues? And how much support would countries like the UK or Poland need to get to organise a blocking minority against the Eurozone? The answer is suprising and politically relevant for the future discussion on the relationship between Euro and non-Euro member states of the EU:

First, let us look at the current power relations in qualitative majority decision-making in the Council. We currently have 17 Eurozone member states (plus Latvia joining in 2014), which have 213 (217) of the 260 votes necessary to carry a decision. Even if there were an agreement of the Eurozone member states, they would still need to win support of other member states such as the UK (29 votes) and Poland (27 votes). However, the Lisbon Treaty changes the system from one based of politically weighted votes to a majority of 55 percent of EU member states (e.g. 15) representing 65 percent of the EU’s population. So, how much support does the Eurozone need to win to get a qualified majority? To my surprise, – counting both Croatia as the 28th EU member and Latvia as the 18th Eurozone member – a decision in the Council could soon be taken like this:

18 Eurozone member states, i.e. easily more than the required 15, representing 65,92 % of the EU-28 population.

Graph 1: Voting power by the Eurozone before and after 1. November 2014

Source: Own creation.

There is no further need to calculate any blocking minorities against the Eurozone – there simply aren’t any. Technically, until October 2017 an protocol to the Treaty of Lisbon still allows evoking the old decision-making system (the so called Ioannina compromise), but that is of course only a buffer for some time. This calculation should bring some serious worries to policy makers in Warsaw or London. Already the United Kingdom is the member state that is being most often outvoted in the Council. A permanent opposition to the Eurozone is thus not feasible. There is therefore serious reason for the British fear of being marginalised in the single market, as already expressed in the balance of competences review, which warns of the possibility of the Eurozone ‘dominating’ the single market.

That being said, in my point of view the best answer to this challenge is to forge alliance both within the Council and within the other EU institutions. First of all, even if the Council decides by qualified majority, especially in the single market legislation can generally only be passed together with the European Parliament via the ordinary legislative procedure. Secondly, a return to the old system of weigthed votes (even if possible) would only be a temporary solution. Latvias entry shows that despite the debt crisis, the Eurozone has kept on expanding. Even in the old voting system the Eurozone would eventually reach the qualified majority, e.g. if Poland, Lithuania and Rumania were to join, who are all still aiming at joining the Euro by 2020.

Finally, and most important of all, the Eurozone is far from a homogeneous club in terms of economic interests. Again and again over the course of the European debt crisis we have seen the major Eurozone countries clash on their priorities to overcome the crisis and stimulate economic growth. In most economic questions, the dividing line will therefore not be between Euro- and non-Euro member states, but between different economic priorities. It is here that the non-Eurozone countries will need to find allies.



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