Leo Hoffman-Axthelm of Transparency International: ‘The Council is not fulfilling the transparency requirements set out by the Treaties’

Could you give us some information about the upcoming survey from Transparency International on the Council’s lack of transparency?

We tried to underline the shortcomings of the Council regarding the lack of transparency and accountability in the decision- making process of this institution. We just tried to base ourselves on the Treaty of the European Union, on the Treaty of Functioning of the European Union, on the existing legislation about transparency of the legislative process on the EU level, and, of course, all the relevant case law from the European Court of Justice. By using all of these elements of the legal frame, we show that the Council is not properly implementing obligations to be transparent in the legislative process.

You don’t just point to the need to create new legislation to make the Council more transparent, but also to the fact that the institution is not implementing the existing legal framework.

Yes, to an extent this is absolutely right. Actually, the transparency requirements are very high at the EU level, especially when it comes to legislative procedure, but in practice, it doesn’t really work. You have to be careful with how you frame that, given that the Council is accountable to the ECJ of the EU, so if the Council really breaks the law, then, of course, the ECJ would have to stop the Council from doing so. But in practice, the Council has found various ways to get around the judgments of the ECJ, for example by not producing documents where they write down the identity of the member states making specific suggestions and opinions.

And so, by not documenting this kind of information ­, the Council makes it impossible to disclose this kind of information, so they get around the requirements for transparency by refusing to produce the information.

Could you share examples from your research that demonstrate this lack of transparency?

Surely one of them is the proposal for Country-by-Country Reporting, which will require large multinational companies to publish information on where they make their profits and where they pay tax. This is about a proposal for a new directive made by the Commission in 2016, and since then, it has basically been sitting on the desk of the Council and has not been moved at all.

There’s no agreement between the Council about the common approach on this law, and that means two things. First, we don’t know which countries are blocking the agreement on this law, given that the Council simply does not publish information about individual governments advocating on the EU level. So basically the law is there, but not moving at all and we don’t know whether the [any] government is in favour or against it. And that’s a problem because citizens cannot punish the Council; they can be only in favour of or against their government. So it’s just not enough to know what the Council is doing, you have to know what your own national government is doing.

The second thing is that by having this opaque procedure, the Council can block any legislative proposal from moving forward indefinitely. Citizens cannot put pressure on the Council because we simply don’t know which governments are responsible for this.

This procedure applies to every law that is negotiated in the Council. Just some weeks ago, they found a compromise on the Rule of Law conditionality for the EU budget and so any law, no matter if it is contentious or not, the Council will have to negotiate a common position ­that all the 27 member states must agree on. The only information you will find at the end is if your government was in favour of the whole compromise reached, but you will not find out if the government was in favour of or against specific aspects, articles or paragraphs of the agreement.

In this specific case, did the Council break any law or interpret the legal frame in any way, thus avoiding more transparency?

The legal frame says you have to be transparent about the legislative process; the Council has to meet in public whenever it considers draft legislation, and the Court has decided that citizens are entitled to know the position of their governments on these laws. The fact that the Council is not recording the identity of the governments and not disclosing the documents is at least in violation of the spirit of the legislation. But of course, you have to sue the Council in front of the ECJ of the EU in order to come to the conclusion that they are breaking the law. At the end of the day, it’s the Court that has to decide if the Council is breaking the law. But it’s pretty clear that they are not fulfilling the transparency requirements set out by the Treaties.

How is the Council responding to calls for more transparency and accountability?

The one thing they say is, “well, this is not the Council, this is actually the preparatory bodies, it’s just the ambassadors and the technocrats under the level of the ministers, only the ministers are the Council”. But I think that this is a game of smoke and mirrors where you just claim you are not the Council but have technocrats doing the work. The vast majority of all legislation is adopted at the technocratic level. The preparatory bodies are the ones doing all the compromises and agreeing on the legal texts. So the ministers, at the end, have just to vote. But claiming that all the work done prior to the decision on preparatory levels is not part of the Council —­ I think it’s a bad excuse.

Which EU institutions have supported more transparency on the EU level? What are the legal arguments of the Court for more transparency in the Council?

The European Parliament tried to push for more transparency in the Council, and the European Ombudsman also repeatedly made investigations on the Council’s lack of transparency. It actually accused the Council of maladministration, which is the sharpest criticism the EU Ombudsman has made. The Council tried to justify the existing status quo saying they need to do things in secret in order to find space for compromise. But I think that if you just look at the current problem of the Council on agreeing on draft legislation, I think this is not true, because if you have functioning democratic accountability —­ if you have the knowledge of what your government is blocking in the Council —­ then you can put way more pressure on the governments, and that can overcome the blocking and the stalemate. So I think increased democratic accountability would actually make the Council more functional. I don’t think that the existing status quo helps governments find space for compromise.

If we know what’s going on in the Council, the pressure from the EU citizens could be higher. If this were the case, do you think we would have already had a compromise on the proposal for Country-by-Country Reporting?

Absolutely. This is because no one wants to be seen as the one blocking taxation on multinational countries. I think it would be difficult to justify an opposite view. The Council is just used to working in secret. They come from a mindset of bilateral diplomacy, and so it’s more like gentlemen’s’ agreements and doing everything secretly. But this is a completely different culture and it really has to change.

Could you give us some examples of the Court’s rulings regarding the necessity for more transparency in the decision-making process of the Council?

There are many examples but let’s talk about the major two we used in our study. One is the Emilio De Capitani v European Parliament case from 2018. That’s a decision regarding the need to publish trialogue documents. It’s about the lack of transparency in the negotiations between the Council and the Parliament — a clear example of the necessity to disclose documents regarding negotiations. And the other decision, regarding the identity of member states, is from 2013 and it’s the Access Info v Council case.

What are the main arguments of these two decisions?

In the 2013 case, the Council had been redacting ­the identity of member states from documents summarising the negotiations in the Council. The Court of Justice said the Council is not allowed to black out the names of the governments, because citizens obviously have the right to know what their government is saying in their name. Unfortunately, the outcome was that the Council changed its policy on Member States’ identities, so that in most cases, they now no longer write down the name of the Member States in order to avoid disclosing their positions. So they will disclose the document, but it will be useless, as it doesn’t say if it’s the Greek or the German government saying or blocking something.

And what about the Emilio De Capitani v European Parliament case?

This case was about documents regarding the negotiations between the European Parliament and the Council, the so-called trialogue negotiations. The Parliament did not want to give out documents after requests, but the Court decided that we have a right to see these documents even before the legislative procedure is completed. They decided so because they looked at the same Treaties’ articles and concluded that yes, the legislative process must be transparent and therefore, you have to have transparent negotiations between the Parliament and the Council. Following this judgment, the Parliament now discloses all the trialogue negotiation documents, when they have been asked for it. So if you do an Access to Information Request to the Parliament, you will get the trialogue negotiating documents. And the Council gives the majority of these documents if you do a request. But of course, these documents should be published automatically. It is absurd if legislative transparency means you have to ask for each document separately when citizens are entitled to this information.

According to you, how does this lack of accountability and transparency affect the lives of the EU citizens? And what’s your opinion on the so-called “blame game” — the fact that governments make decisions behind closed doors and then blame the EU for their decisions even as the Council is practically made up of national governments?
We always tried to make crystal clear that when we talk about the Council, we do not talk about the EU — we talk about the national governments. Most people may assume that the Council is a European institution. But at the end of the day, it’s the governments. That’s why I prefer saying national governments and not Council. In terms of practical consequences for the citizens, I think that the example of the taxation on multinational companies shows how the lack of transparency affects them. This is because big companies avoid paying taxes by going to low tax jurisdictions, so basically, they are stealing money from the public, from you, from me, from the governments. And of course, the citizens pay higher income tax and bear the consequences.

I think that higher transparency in the legislative process would force the Council to work more in the public interest instead of helping multinational companies. They would make sure there’s transparency in the way they pay their taxes and that would, of course, help citizens everywhere.

If you look at the Volkswagen emissions scandal, in all of these things, part of the result comes from the strong lobbying by specific industries, which are very important in specific member states. And of course, the German government would be concerned about jobs in its country. Carmakers are an important lobby —there’s a strong car industry in Italy, France, Germany, Spain. It’s everywhere in Europe. But this cannot mean that the legislation on regulating car emissions should only help the car sector. It should also help the citizens, to make sure that the air is clean and the fight against climate change is effective. So I think that more transparency would help reconcile these conflicts that you always have in society. In a way, it’s fairer and more reasonable.

And then, of course, you should not forget the importance of the legitimacy of the EU institution or the trust the citizens have in government, which over time is eroded by this finger-pointing and by blaming the EU for the fact that the national governments decide in a non-transparent way. We see that with Brexit, we see it with demagogues and populists getting support everywhere. We should always try to protect the legitimacy of the EU institutions by making them better rather than try to scorn short-term political goals by hiding behind the Council and criticising the EU.

Why do you think the Council remains so “stubborn” against transparency reform despite voices calling for reform?
If the Council were more directly accountable to citizens, they would have to face criticism, they would have to ask themselves how they could improve in delivering to their people and not fail them. But the fact that the Council is not accountable — the fact that you can only hold national governments accountable one by one in their national context, means that if you really want to put pressure on the Council, you have to create 27 coordinated campaigns in 27 countries and really put the issue of the Council in the agenda in all of them. And that’s been too difficult so far, and that’s too convenient for the governments. The way the Council avoids being accountable is by fragmenting its accountability in 27 political discourses in 27 member states.