This is a republication of the investigation by Kostas Koukoumakas and Corina Petridi, produced and published by BIRN. It is published in Greece by Efimerida Ton Syntakton in Greek and by Reporters United in Greek and in English.
Edited by Georgia Nakou
A longer version of this article was published by Investigate Europe. You can read more about Investigate Europe’s Secrets of the Council investigation here. The Greek version of the story was published by Efimerida ton Syntakton and Reporters United.
“Every citizen shall have the right to participate in the democratic life of the Union. Decisions shall be taken as openly and as closely as possible to the citizen.” (Article 10, 3. Treaty on the European Union, 7 February 1992)
“It is virtually impossible for a citizen to know how a European law came into being and what the position of his or her country’s government was on that law”. (Emilly O’Reilly, European Ombudsman, French Senate, 28 May 2020)
“Blame Brussels.” This familiar response from politicians can be heard all over Europe, with policy-makers — from Sweden to Poland, from Germany to Greece — shifting responsibility for unpopular or controversial legislation to a faceless decision-making body stifled by bureaucracy. The UK found so much to “Blame Brussels” for, that in 2016, the country made the decision to leave the EU altogether.
When pointing their accusing finger at “the EU” what many people don‘t realise is that the politicians are actually pointing at themselves. The Council of the EU, the EU’s main legislative body, is comprised of representatives from the now 27 Member States. This means that the decisions of the Council are decisions not of the EU but of national governments, who can either support them, or sabotage them.
The EU has three separate legislative bodies:
- The European Commission, which proposes legislation.
- The European Parliament, which votes on the Commission’s proposals.
- The Council of the EU, representing the national governments of the member states, which has the final say on adopting or rejecting legislation.
In the Council of the EU:
- while member state ministers cast the votes, it is not elected politicians, but national government officials, who draft and negotiate the legislation. The culture and the procedures are those of confidential diplomacy, not transparent democracy;
- diplomatic secrecy hinders decision-making and public discourse, so dozens of legislative proposals get stuck for years without citizens ever knowing about it;
- those responsible almost never have to publicly justify their actions, allowing lobbyists to exert influence behind the backs of voters.
All this is done in a powerful apparatus which — unlike the Parliament or the EU Commission — is largely unknown to many EU citizens. The Council becomes visible when ministers meet under Europe’s colourful flags to exchange views in front of the cameras or to give their formal blessings to decisions that were made long ago.
But the actual negotiation of the legislative texts takes place in more than 150 committees and working groups, bringing together officials from national representations and ministries in the capitals. Their work is coordinated by the 27 EU ambassadors, the Council of Permanent Representatives (or “Coreper” in EU jargon), in its weekly meeting. All in all, there are some 4,000 meetings every year, taking place in the three Council buildings directly opposite the headquarters of the European Commission, behind closed doors and without public minutes.
Limité – default secrecy
The Council’s default position is one of secrecy. There is “an almost automatic stamping of ‘limité’ on the documents,” according to European Ombudsman Emily O’Reilly, who spoke with Investigate Europe about the lack of transparency. ‘Limité’ marks a document as being for internal distribution only, and is not a classification level, although it is often perceived as such.
Changing this “default secrecy”, as well as regularly recording the positions taken by Member States in the legislative negotiations were the main recommendations from the European Ombudsman.
Call for more Transparency
“The Council of the EU — through practices that inhibit the scrutiny of draft EU legislation — undermines citizens’ right to hold their elected representatives to account.” This was the conclusion of Emily O’Reilly’s detailed 2018 inquiry into the lack of transparency in the Council.
As O’Reilly explained to Investigate Europe, “If you don’t know that your country was directly involved in making a decision about something which may not be popular back home, then it can be easy for government ministers to deflect attention from their active participation and acceptance of a particular law and talk about the famous faceless bureaucrat.”
The report echoed criticisms made a year earlier by the Association of the EU Committees of the National Parliaments (Cosac). “If our citizens don’t have access to what is going on in their government, how can they possibly cast an informed vote?” asked the Dutch Cosac-delegation, which authored the paper, ‘Opening up closed doors: Making the EU more transparent for its citizens‘, calling for greater legislative transparency in the Council.
The European Parliament and the European Court of Justice, along with civil society organisations such as Transparency International, have joined this call for more openness. But in spite of broad support for full legislative transparency, national governments (for it is the national governments that can make this change) have yet to improve the openness of Council processes.
They did not even respond to the letters from O’Reilly and Cosac, nor to the resolution of the European Parliament, thus demonstrating both the weakness and arrogance of the legislators who hide behind the veil of diplomacy. Only a year into the investigation from Investigate Europe, the Council gave some answers to our questions.
National governments are also reluctant to comment. Investigate Europe contacted Greek Prime Minister Kyriakos Mitsotakis’s office several times asking for a comment on the issue of lack of transparency in the Council, however our questions were not answered.
What the Greek parties say
Investigate Europe contacted the political parties represented in the Greek Parliament with questions regarding the lack of transparency in the Council. New Democracy and KIN.AL. (Movement for Change, a successor to PASOK, the Socialist Party that governed the country for long periods from the 80’s until 2012) did not respond, but we received the following responses from SYRIZA, KKE (Greek Communist Party), Greek Solution (right-wing, eurosceptic party) and DiEM25, Yanis Varoufakis’s party.
“We support measures that can contribute to the democratisation of European institutions, in order to address the existing gaps in transparency and accountability. For example, studies show that the democratic deficit of the EU can be reduced or corrected with the use of new digital governance tools.”
(Yiannis Bournous, SYRIZA MP and shadow deputy minister for Foreign Affairs)
“Decision-taking behind closed doors is not a deviation from the so-called democratic functioning of the EU, and does not apply only to the Council but to all of its institutions. It is the rule, which flows from the nature of the EU as an imperialist intergovernmental union of monopolies. KKE demands the implementation of compulsory full transparency of all meetings of the Council of Ministers in any of its configurations, as well as the European Council, the ‘trilogues, and the keeping and publication of minutes.”
(Lefteris Nikolaou-Alavanos, KKE MEP)
“Perhaps the most important [European] Union institution with an expanded role and policy-making powers holds its meetings behind closed doors and is run by bureaucrats, while it is buffeted by the political will of the powerful few member states, functioning as a means to serve their national interests.” (Kyriakos Velopoulos, President of Greek Solution)
“You are addressing your question to the politician who was derided more than anyone for highlighting the lack of transparency with which decisions are taken behind closed doors in the name of European citizens. We remind you that our movement, DiEM25, started Euroleaks precisely for this purpose, to enable citizens to hear with their own ears the disgraceful decision-making process, to break the silos of non-transparency which undermine any hope of democratising the EU. The keeping of minutes is the least that is required. We would even propose live streaming.” (Yanis Varoufakis, Secretary of DiEM25)
‘Stuck’ in Council
The Council argues that transparency would make it harder for national governments to reach agreement on difficult decisions. In reality, the facts point to the opposite conclusion.
The European Parliament’s legislative database shows the status of legislative files as they progress towards becoming law. As of October, there were 30 draft laws that have not made any progress in three or more years, and have become ‘stuck in Council’, despite being approved by the European Commission and the European Parliament. Member States have been unable to reach a compromise that would allow them to progress.
There is no time frame on which the Council is obliged to make a decision on proposed legislation, and presidencies only put proposals to a vote when they can expect a qualified majority: at least 65% of the represented population and 15 Member States. At the same time, a vote on behalf of 35% of the population or 13 governments is sufficient to block new laws.
Because citizens, journalists and lobbyists don’t know which governments are blocking an issue, they can‘t influence it. There is hardly any pressure on the governments that make up the blocking minority.
At the same time, big lobby groups have the capacity to gather information about what happens in the Council beyond what is available in public documents. And, as sources have told IE, for big lobby groups that want to stop or water-down proposals that they don’t like, the blocking minority is the perfect instrument.
“The secrecy in the Council means that there is little or no pressure on individual EU governments, which allow them to put off difficult decisions,” says Emily O’Reilly, citing the recent example of a French environmental NGO which was denied access to the Member States’ positions on an issue regarding pesticides and bees. It was one more EU decision that had been stuck for several years.
Of the proposals which have been ‘stuck’ for years, Investigate Europe has singled out a few for further examination, some of which will be published by Reporters United as separate features.
Case study: Country by Country Reporting on tax
Multinationals such as Google, Facebook, Amazon, Apple, Lafarge, BASF, Daimler and Fiat-Chrysler register their profits in countries such as Ireland, Netherlands or the Cayman Islands, where corporate tax rates are relatively low. They do this despite most of their turnover coming from elsewhere. Although perfectly legal, the EU Commission says such aggressive tax planning costs EU countries up to €70 bn a year in lost tax revenue.
For four years, EU governments have been negotiating a draft directive — public Country-by-Country Reporting (pCbCR) — to make this tax avoidance more visible by distinguishing which activities relate to a specific country.
After making swift progress (adoption of the proposal by the European Commission in 2016, and approval by the European Parliament in 2017), the draft directive arrived in the Council, where it was blocked by several states. Its progress ground to a halt.
It was reported early on that Germany was the leader of the blocking minority, because the German Minister of Economics had sided with the transnational companies arguing that they would lose competitiveness due to the forced publication of alleged business secrets. But for years, the other members of this “blocking alliance” were unknown.
That only changed in October 2019, when German Green MEP Sven Giegold managed to get hold of information that had until then (and in line with Council practices) been a well-kept secret: a list of the countries that were blocking the law.
Some of the names came as no surprise: Ireland, Luxembourg, Hungary, the Czech Republic, Malta and Cyprus have rules that attract multinational companies looking to shrink their tax bill. What was a surprise was the appearance of Sweden and Portugal, two countries with Social Democratic governments that had publicly promised to fight tax avoidance.
Investigate Europe wrote about the list in November 2019. Sweden defended its position by arguing that laws about tax transparency should be adopted in the same way as tax law — with unanimity. However, Investigate Europe has proof that the Swedish finance minister had opposed pCbCR before the actual legal proposal had commenced — even before countries found out about the voting procedure.
It was only after Investigate Europe questioned Portugal’s position that the government changed its policy. Until then, there had been no national debate about the issue, as the Portuguese government’s position in the Council was not known
The reaction from Lisbon was less clear. In a short written statement sent in response to questions from IE, the Portuguese Ministry of Foreign Affairs said: “In the context of this discussion, Portugal has taken a stance of attentive observation of the arguments of member states and the Commission, and there has been no position taken so far, nor any matter to which it has been opposed.”
But in practice, this “attentive observation” resulted in opposing the draft law in the Council negotiations. This had been going on for over two years, while at the same time, the Portuguese government had been publicly proclaiming that “the increasing sophistication and globalisation of tax evasion and avoidance mechanisms make greater European and international cooperation indispensable.”
Furthermore, the Portuguese Government had promised parliamentarians “to fight for greater tax justice on a European scale, combating the erosion of tax bases between different states, tax evasion and unfair competition”.
For Ana Gomes, a former Portuguese Socialist MEP, this was a “total contradiction between what was said in the government’s programme and the country’s position in the Council. Either there’s total political insensitivity, or it’s worse… This shows how a fundamental political issue is dealt with by leaving the worst powers to decide.”
According to German MEP Sven Giegold, Portugal too seemed to advocate unanimous approval of the CbCR directive — an unrealistic goal, given the position of countries such as Ireland and Luxembourg. “With its legal concerns, the Portuguese government is protecting tax evaders,” he stated. “The concerns expressed about the legal basis are in fact killing the Commission proposal.
According to Giegold, the unanimity of EU Member States for public tax transparency for large companies will never be achieved, and is not necessary. “For banks, the EU has already introduced public tax transparency on a country-by-country basis under the qualified majority voting procedure. This transparency has been working for years and has not given rise to any legal problems,” he said.
It was only after Investigate Europe questioned Portugal’s position that the government changed its policy and the legal doubts were overcome. Until then, there had been no national debate about the issue, as the Portuguese government’s position in the Council was not known.
In November 2019, Portugal voted alongside the countries in favour of the directive, but the directive did not pass, and is still “stuck in the Council”, because after a call from his German colleague the Croatian economics minister made a last-minute change of position and voted against the proposal.
“To the question of principle, there is also a problem of method, since this whole process of (not) taking a position by the Portuguese government and aligning with the arguments of the countries opposing the directive has occurred in an opaque manner,” said Portuguese MP Mariana Mortágua.
This was the point previously made in Emily O’Reilly’s official report that proposed that “the Council should systematically record the identities of Member States expressing positions in preparatory bodies.” Portugal does not share this view. In its blocking of the CbCR directive, it is not known who decided the country’s position, why, or for what purpose.
According to a survey done by IE, there was a qualified majority for the tax transparency proposal since the beginning of 2020, because parliament passed a resolution forcing the government to vote in favour. And yet, it was not adopted all the year 2020 because at first the Croatian and then the German government, during their position as holder of the Presidency, refused to put the vote on the agenda of the competent ministers’ meeting. The postponement of the decision violated the principle that Council Presidency should act as a neutral mediator between the EU states: if there is support in favour of a legislative proposal, there is an obligation to put it to the vote. But the German government chose to disregard this
Following the investigation by Investigate Europe, there has been progress on the CbCR directive on corporate tax transparency. During the Portuguese presidency in the Council, a clear qualified majority was reached on the proposal for CbCR at the meeting of EU Competitiveness Ministers on 25 February 2021, and on 8 March 2021 it was announced that a decision was reached by the European Parliament’s Committees on Legal (JURI) and Economic and Monetary Affairs (ECON) to enter into interinstitutional negotiations.
The push for transparency
When European leaders launched the modern EU with the Lisbon treaty 13 years ago, they promised to democratise the Union. Citizens were to be given an explicit opportunity to participate. “Decisions will be taken as openly and as closely as possible to the citizen,” they wrote in the text of the treaty. “To promote good governance and ensure the participation of civil society, the Union institutions shall act as openly as possible,” they added. The Parliament and the Commission have largely adhered to this principle.
However, national governments are still unwilling to apply this to their own legislative activities.
Michael Roth, Germany’s Minister of State for Europe at the Federal Foreign Office, and by default, the representative of the previous Council presidency, considers the secrecy justified. While the German Government was committed to “making more of the work in the Council public”, he told Investigate Europe at the time that he saw “little room for manoeuvre” for the demand by Ombudsman O’Reilly and the EU Parliament to make the positions of the individual governments public at an early stage. “This concerns the preparatory meetings in the working groups and the Council of Permanent Representatives, which are not open to the public.” There, he said, “confidentiality is needed to have a protected space for the difficult search for compromises. Roth told us he believed that the allegation about the EU’s secretive legislation was “a distortion of Europe, which is highly dangerous and plays into the hands of nationalists and populists.”
O’Reilly and her supporters in the EU Parliament see it as the opposite. The Ombudsman warns that negotiating “behind closed doors runs the risk of alienating citizens and feeding negative feelings against the EU”. Because national representatives keep all negotiations secret until the law is passed, citizens experience EU politics as a fait accompli, where their voice cannot be heard because they do not even know what is going on. In contrast, O’Reilly claims “the legitimate right of citizens to influence”. Therefore, she says, the Council must provide information at “an appropriate time” before everything has happened. Even then, there would be enough room for confidential negotiations.
In order to achieve this, the Ombudsman is counting on a “cultural change” that, she believes, has already begun. And the critics of secrecy in the Council, such as O’Reilly and her allies in the European Parliament and civil society, have a powerful ally: the European Court of Justice (ECJ).
In 2018, the ECJ heard a complaint brought by Emilio De Capitani, former head of the secretariat in the EU Parliament’s Legal Affairs Committee, with the help of Otto Brouwer, a Dutch legal expert who has for many years represented activists and parliamentarians pro bono in their dispute over transparency in the EU.
De Capitani argued that the Council’s positions should be published during the negotiations with the Parliament. The judges upheld this complaint – and their reasoning reads like a leaflet by civil rights activists. “It is precisely openness in the legislative process that contributes to conferring greater legitimacy on the institutions in the eyes of EU citizens and increasing their confidence in them by allowing divergences between various points of view to be openly debated,” the judges wrote. “Indeed, the possibility for citizens to be informed about the bases of legislative activity is a prerequisite for the effective exercise of their democratic rights,” they clarified, adding the dire warning: “it is in fact the lack of information and debate which is capable of giving rise to doubts in the minds of citizens, not only as regards the lawfulness of an isolated act, but also as regards the legitimacy of the decision-making process as a whole.”
It is all the more surprising that this and other judgements have not changed the practice of Europe’s most powerful legislator so far. The Council’s practice of secrecy “contradicts existing case law”, said Miguel Poaires Maduro, the former Advocate General of the ECJ, in an interview with Investigate Europe. “The institution behaves like a defiant child”, mocks Brouwer. The answer could, therefore, only be to “continue to go to court” in order to “name and shame those responsible”. In the end, he predicts, “the judges will lose patience”.
Investigate Europe is a team of journalists from nine countries who jointly research topics of European relevance and publish the results across Europe. Harald Schumann (Germany), Sigrid Melchior (Sweden), Cécile Andzejewski (France), Thodoris Chondrogiannos (Greece), Wojciech Ciesla (Poland), Ingeborg Eliassen (Norway), Juliet Ferguson (UK), Maria Maggiore (Italy), Paulo Pena (Portugal) and Elisa Simantke (Germany) worked on the research.