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larly, no referendum on new bonds is needed as long as the principle of a balanced budget is fixed as
in Art. 39 of the draft constitution. If there are changes in both constitutional provisions, for whatever
reason, specific fiscal referenda on tax changes and the issuing of new bonds should be introduced in
the EU constitution. The majority requirement should then be the same as for the mandatory consti-
tutional referendum.
With respect to EU spending, the draft constitution does not contain any specific provisions. Indi-
rectly, however, spending is pre-determined by the assignment of tasks to the EU level. The current
EU budget, though following the principle of unity, can be (politically) divided in different funds, the
agricultural and the structural funds. Again, the mandatory constitutional referendum suffices as long
as the assignment of new responsibilities is as closely attached to spending as it currently is at the EU
level. If, again for whatever reason, the EU should adopt more competencies and power and thus
also have increased spending needs, a fiscal referendum for new spending projects would however
be useful. In that case, we propose to have an optional and a mandatory fiscal referendum on new
spending projects with different spending thresholds. The thresholds could be in absolute or relative
terms. Moreover, the spending threshold should also differ whether it is a non-recurring project or
recurring expenditure. Due to the fact, however, that there is no need for such a referendum at the
moment, it does not make sense to specify exactly these four different thresholds. The majority re-
quirement could be a simple majority of EU citizens. It must be noted that such a fiscal referendum is
useful if the EU would develop to a more powerful Union. Because constitutional provisions are cre-
ated for a longer time horizon, a fiscal referendum may thus already be considered to be included to-
day. We believe however that the current financial structure of the EU and the constitutional provi-
sions thought about according to the draft constitution of the Convention do not necessarily need to
be restricted additionally by a fiscal referendum. Given the current state of the discussion, a manda-
tory constitutional referendum as well as a constitutional and statutory and general initiatives appear
to be sufficient to bind EU policy outcomes to the preferences of EU citizens.
5 Summary and Concluding Remarks
In this paper, the introduction of direct democratic decision-making in all EU decisions is considered
when it is feasible without prohibitively increasing decision-making costs. After clarifying that each
constitution is a contract joining the citizens of a state and requires as such the explicit agreement of
(at least a majority of) citizens, the pros and cons of direct democracy from a theoretical and empiri-
cal perspective are discussed. That citizens have better possibilities to control representatives in di-
rect than in representatives democracies provides one of the strongest arguments for the introduction
of direct democracy in the European Constitution. The control argument cannot be invalidated by the
consideration of interest group or scale arguments. That citizens may vote expressively is no argu-
ment against direct democracy as well. It can rather be expected that expressive voting leads citizens
to express moral sentiments instead of narrow self-interests at the ballots. Seen from this perspective,
referenda and initiatives may be an institutionalised way to shape the emergence of a European
demos. If this happens to be the case, it is another argument for the introduction of referenda and ini-
tiatives at the EU level. A final strong argument for direct democracy in this paper is obtained from
the comparative empirical evidence on economic policy outcomes in direct and representative demo-