With Russia still in Ukraine
in 2025, the E.U. faced pressure to enact more laws and regulations at the
federal, yes, federal level to reap the benefits of collective, coordinated
action. Although the fear that Russia might invade one or more of the eastern E.U.
states was probably unrealistic, given that Russia was still mired in Ukraine,
the crisis of an invasion so close to the E.U. could legitimately serve as a “wake-up
call” for the federal and state officials in the E.U. to get their federal
system of dual sovereignty in order. The ability of state governments to successfully
evade the state deficit and debt limits in the federal Stability and Growth
Pact and the flipside of the Commission’s weakness can be read as indicative
that more work is needed to get to a viable federal system. The states have
been able to weaken the limitations successively over years, including by leveraging
the fear of invasion by Russia as a call for more defense spending at the state
rather than at the federal level.
By 1 May 2025, several E.U.
states had notified the European Council of their intent “to make use of an
exemption allowing them to go over budgetary limits in order to boost military
spending. The Commission, the E.U.’s executive branch, had proposed earlier
that year that E.U. state governments “could use an emergency clause to spend
up to 1.5% of their GDP on defence investments over the next four years without
breaching rules on public deficits and debt” at the state level.[i]
The Stability and Growth Pact (SGP) mandates that any state’s government budget
deficit be kept below 3% of GDP and government debt below 60% of GDP. The regulations
are based on Articles 121 and 126 of the Functioning of the European Union
basic (i.e., constitutional) law. The weakening of the strictures on states in
violation has been the norm rather than the exception. In 2024, for example, the
Commission suspended the debt limit out of concern that economic growth would
be compromised by state governments raising taxes or cutting spending to reduce
their respective total debt to below 60% of GDP. That such reasoning could be
used at any time undermines the contention that 2024 uniquely justified
the Commission’s caution.
I submit that in actuality,
the Commission’s officials were coming to the realization after years of state
violations that enforcement of the federal regulations was too difficult for
such a weak federation. In other words, the state governments still had not
delegated enough authority to the Commission that it could hold the states
accountable on matters of exclusive federal competencies.
As for shared competencies (i.e., policy domains of authority), the lack of respect of several states for the federal regulations on deficits and debt suggest that the Commission has its work cut out for it in negotiating with state governments on cooperation on shared policies so federal and state policies on a given matter will not work at cross-purposes.
As for the competencies retained by the states, agreeing to shift at least some of them to the federal level (as enumerated federal powers) is needed so there is a check-and-balance between the states and the union. In other words, that state governments have gotten away with serially violating the Stability and Growth Pact suggests that the Commission does not have enough leverage even to enforce federal regulations on states. The overall balance of governmental sovereignty between the union and the states is itself problematic, or at least sub-optimal.
1. Rory Sullivan, “Sixteen
EU Countries to Trigger Clause Increasing Defence Spending,” Euronews.com, 1
May 2025.
