After an ongoing battle with his fellow politicians and European Union (EU) leaders alike, Czech President Vaclav Klaus finally approved the EU Reform Treaty yesterday. Eurosceptic Klaus, who has on a few occasions compared the EU with the former Soviet Union, regularly expressed his disapproval of the text. Nevertheless, following the positive outcome of the Irish referendum on the treaty in October, and yesterday's pro-treaty verdict by the Czech Constitutional Court, Klaus had no other option but to give in. Typically for Klaus, he refused to surrender quietly, accusing the court of being "biased", and warning that the Czech Republic had now lost its sovereignty. The Czech Republic was the last EU member state to ratify the treaty; it is now set to enter into force on 1 December.

Pros and Cons of Treaty

The EU Reform Treaty, also commonly referred to as the Lisbon Treaty, divides opinions in the bloc. It is designed to improve the functioning of the EU as it widens in size and deepens in scope. Supporters regard it as a milestone in the EU's history. The treaty is highly necessary, as the bloc—launched in 1951—almost doubled in size from 15 to 27 states in just 12 years (1995–2007). In particular, the big-bang enlargement of 2004, which saw a group of ex-communist countries join, including the Czech Republic, prompted calls for a revised blueprint for the EU. Supporters argue that the treaty will give the EU greater influence in the world stage and bring it closer to EU citizens with the increased co-decision powers of the only directly elected EU institution, the EU parliament. Indeed, the Council of Ministers—the second in command among institutions staffed with EU government officials—would have to make more room for EU parliament committees on a number of issues in key areas such as the budget, and Justice and Home Affairs. The treaty also strengthens EU citizens' rights by offering more room for citizens' petitions to the European Commission. The binding nature of the EU Charter of Fundamental Rights, which sets out the rights of EU citizens across the bloc in civil, political, and social affairs, offers defendants greater scope to challenge state bodies in courts successfully. The text will have to be respected by all EU institutions and governments, although those with opt-outs will have a slightly subdued obligation to follow the text.

The current treaty is an overhauled version of the equally controversial EU Constitution, which was rejected in referendums in France and the Netherlands in 2005. As many opponents argue, there are no major differences between the Reform Treaty and the EU Constitution. Opponents are also worried about the implications of the EU Charter on Fundamental Rights: Such was the worry about sovereignty on specific laws that the senior members of the British, Irish, Polish, and Czech governments all called for protocols—or opt-outs—to be added to the text. However, the main criticism remains the balance of power between the member states and EU institutions. As Klaus has emphasised on many occasions, the EU is increasingly resembling a centralised super-state that undermines the sovereignty of the member states and their jurisdictions. In particular, he criticises the gradual undermining of veto powers in the Council of Ministers by the introduction of more qualified majority voting, a measure that will accelerate decision-taking but also lower the decision-making powers of each member state.

Good for Business

For all its shortcomings, the treaty is good news for foreign investment. Recent EU joiners often laud the effect of joining the EU on their businesses. The removal of import tariffs and border checks has considerably improved business operation. The treaty aims to further eliminate remaining restrictions. The treaty proposes new incentives for integrating EU member states into the world economy, notably through progressive abolition of international trade restrictions. It also increases the scope for benefits to sectors such as eco-tourism, renewable energy, and research, which are all of high importance to the EU. In addition, the treaty reinforces the EU's commitment to regional development by increasing the scope for improved regional infrastructure and high-tech communication to reach far-flung areas. Better EU trademarks and designs should further improve the clout of entrepreneurs and inventors, making the EU a hub for research and development, if all goes to plan.

Outlook and Implications

The EU Reform Treaty is not a magic formula for resolving all the outstanding problems of the EU. Nor is it likely to create a "super-state", as member states remain in the driving seat on all key affairs. What it will do, though, is increase the scope for protest by EU citizens and other EU institutions, notably the EU parliament. The overall idea of the EU is only 17 years old, being introduced by the Maastricht Treaty in 1992; it is indeed very young compared with models that the treaty's opponents often revert to, such as the United States of America.

The ratification of the treaty is now complete. All eyes now turn on the appointments for two high-profile posts that are created by the treaty: the European Council President and the High Representative for Foreign Policy. Finding the right people might be tricky, given political bickering. The two positions are fairly new and therefore need to be filled by highly experienced candidates in order to get off to a great start. The EU is set to start discussions on suitable candidates soon; current Dutch prime minister Jan Peter Balkenende, Belgian prime minister Herman van Rompuy, and Luxembourgian prime minister Jean-Claude Juncker are all likely to be fielded for the post of European Council President in the preliminary stage. As for the post of High Representative, British foreign affairs minister David Miliband is a likely favourite, despite the United Kingdom's overall image as comparatively Eurosceptic.

Klaus's ratification has finally resolved the deadlock over one of the EU's most controversial and bold texts; yet the possibilities it offers could resurface tensions that have been suppressed between the EU institutions and governments while the treaty's survival was still hanging by a thread.

Global Insight (Reino Unido)