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23 The EU as a new political systemSimon Hix
Chapter contents
Introduction 574
Explanations of European integration 576
Understanding the EU as a political system 580
Vertical dimension: the EU as a regulatory state 583
Horizontal dimension: a hyper-consensus systemof government
589
Democratic politics: the missing link? 595
Conclusion 598
Reader's guideThis chapter analyses the development and
operation of the European Union (EU) asa political system. I start
by looking at the evolution of the EU and how the process
ofEuropean integration has traditionally been understood. The
chapter then discusseswhat it means to think of the EU as a
political system from the point of view ofcomparative politics. As
in other multi-level polities, there are two basic dimensionsof the
EU system: (1) the vertical dimensionthe allocation of
policy-making powerbetween the EU and the member-states; and (2)
the horizontal dimensionthedesign and operation of EU
decision-making. These two dimensions are consideredseparately
before we turn to the missing link in the EU system: the lack of
genuinedemocratic politics.
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574 Simon Hix
IntroductionIn the early twentieth century, Europe suffered
thetwo most destructive wars in human history, as thepinnacle of
centuries of bitter political and economicrivalries between the
states of Europe. At the be-ginning of the twenty-rst century, in
contrast, thestates of Eastern and Western Europe are united in
acontinental-scalepolitical system,where certainexec-utive,
legislative, and judicial powers are collectivelypooled at the
European level, and national govern-ments choices are heavily
constrained by the rulesand decisions of the EU. There are
certainly problemswith the EU. In particular, decision-making
amongsttwenty-seven states is difcult, and the
democraticfoundations of theEUremainweak.However, the EUis one of
the most remarkable political achievementsof modern times. The EU
single market guaranteesthe economic prosperity of almost half a
billionpeople, and most EU citizens take for granted theinvestment,
consumption, educational, travel, andlifestyle opportunities that
exist because of the EU.Above all, for the rst time in human
history, awar between the major states of Europe is
almostunimaginable.
How did this happen? When six European statesdecided in the
early 1950s to place their coal andsteel industries under
collective supra-national con-trol, few would have expected that
this would haveled within fty years to a new
continental-scalepolitical system. Box 23.1 lists the key stages
inthe development of European integration. A fewstages are worth
highlighting. In the 1960s, West-ern Europe became the rst region
in the worldto establish a customs union, with an internal
freetrade area and a common external tariff. Addedto this common
market was the rst genuinelysupranational public expenditure
programme: theCommon Agricultural Policy (CAP). European
in-tegration then took a major step forward in the1980s. The rst,
and so far only, continental-scalesingle market was created by the
early 1990s, withthe removal of internal barriers to the
cross-borderow of goods, services, capital, and labour, a
single
European competition policy, and a single Europeancurrency (the
euro). In parallel to, and partly as aconsequence of, the single
market, in the 1990s theEU developed common social and
environmentalpolicies, common policies on the movement of per-sons
between the EU states and across the EUsexternal borders, and began
to coordinate nationalmacro-economic, justice and policing, and
foreignand security policies.
As the rst genuinely supra-national political sys-tem, many
aspects of the EU are unique. On theother hand, from the point of
view of comparativepolitics, there are many things the EU shares
withother multi-level polities. For example, the divisionof powers
between the lower (national) and higher(European) levels of
government determines howpolicy-making works and the room for
manuvreof the two levels of government. Moreover, at theEuropean
level, the design of agenda setting and vetopowers in the
decision-making process determineswhich actors aremost likely to
secure the policies theymost prefer and how easy or difcult it is
to changeexisting policies. The eld of comparative politics
hasdeveloped analytical tools to understand these andother aspects
of multi-level political systems whichare increasingly applicable
to the EU.
KEY POINTS
In half a century the EU has evolved from an or-ganization
governing coal and steel production anda common market to a
continental-scale politicalsystem, with extensive executive,
legislative, andjudicial powers.
The process of European integration began with sixmember states,
the EU now has twenty-sevenmem-bers and may enlarge to thirty or
even thirty-ve inthe next decade or so.
The EU shares many characteristics of other multi-level
political systems, which enables the tools ofcomparative politics
to be applied to the EU.
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Chapter 23 The EU as a new political system 575
BOX 23.1 Key Dates in the Development of the European Union
18 February 1951 Belgium, France, Germany, Italy, Luxembourg,
and the Netherlands sign Treaty ofParis, launching the European
Coal and Steel Community (ECSC).
.......................................................................................................................................................
23 July 1952 Treaty of Paris enters into
force........................................................................................................................................................
1 January 1958 Treaties of Rome enter into force, establishing
the EEC and
Euratom........................................................................................................................................................
30 July 1962 Common Agricultural Policy
starts........................................................................................................................................................
5 February 1963 Van Gend en Loos ruling of the ECJ, establishes
the direct effect of EEC
law........................................................................................................................................................
15 July 1964 Costa v. ENEL ruling of the ECJ, establishes the
supremacy of EEC
law........................................................................................................................................................
29 January 1966 Luxembourg compromise, which effectively means
Council must decideunanimously.
.......................................................................................................................................................
1 July 1967 Merger Treaty, establishing a single set of
institutions for the three
communities........................................................................................................................................................
12 December 1969 Hague Summit, governments agree to push for
further economic and politicalintegration.
.......................................................................................................................................................
1 January 1973 Denmark, Ireland, and the United Kingdom
join........................................................................................................................................................
27 October 1970 Governments start foreign policy cooperation
(European Political
Cooperation)........................................................................................................................................................
10 February 1979 Cassis de Dijon ruling of the ECJ, establishes
mutual recognition in the provision ofgoods and services in the
common market.
.......................................................................................................................................................
13 March 1979 European Monetary System
begins........................................................................................................................................................
710 June 1979 First direct elections of the European
Parliament........................................................................................................................................................
1 January 1981 Greece
joins........................................................................................................................................................
26 June 1984 Margaret Thatcher negotiates the British rebate
from the annual
budget........................................................................................................................................................
1 January 1985 First European Communities passports are
issued........................................................................................................................................................
1 January 1986 Portugal and Spain
join........................................................................................................................................................
19 May 1986 European ag used for the rst
time........................................................................................................................................................
1 July 1987 Single European Act enters into force, launching the
single market
programme........................................................................................................................................................
13 February 1988 First multi-annual framework for the EC budget
agreed........................................................................................................................................................
9 November 1989 Berlin Wall
falls........................................................................................................................................................
1 January 1993 Single European Market
starts........................................................................................................................................................
1 November 1993 Maastricht Treaty enters into force, launching
the EU and the plan for
EMU........................................................................................................................................................
21 July 1994 European Parliament rejects a piece of EU
legislation for the rst
time........................................................................................................................................................
1 January 1995 Austria, Finland, and Sweden
join........................................................................................................................................................
1 January 1999 EMU
starts........................................................................................................................................................
15 March 1999 Santer Commission resigns before a censure vote is
held in the European
Parliament........................................................................................................................................................
1 May 1999 Amsterdam Treaty enters into force, starting the area
of freedom, security andjustice.
.......................................................................................................................................................
24 March 2000 European Council agrees the Lisbon strategy to
promote growth and
productivity........................................................................................................................................................
(continued overleaf )
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576 Simon Hix
BOX 23.1 Continued
1 January 2002 Euro notes and coins replace national notes and
coins for ten member
states........................................................................................................................................................
1 February 2003 Nice Treaty enters into force, launching defence
cooperation and reforming theinstitutions in preparation for
enlargement.
.......................................................................................................................................................
1 May 2004 Cyprus, Czech Republic, Estonia, Hungary, Latvia,
Lithuania, Malta, Poland, Slovakia,and Slovenia join.
.......................................................................................................................................................
26 October 2004 European Parliament blocks the election of a new
Commission........................................................................................................................................................
29 October 2004 Treaty establishing a Constitution for Europe
signed........................................................................................................................................................
29 May/1 June 2005 No votes in referenda in France and the
Netherlands on the Constitutional
Treaty........................................................................................................................................................
1 January 2007 Bulgaria and Romania join.
Explanations of European integrationIn the earlyperiodof
theEUsdevelopment, social sci-entists attempted to explain the
process of economicand political integration in Europe. Several
scholarsexpected in the 1950s and 1960s that regional integ-ration
would happen in many parts of the world, asrelations between states
changed dramatically in theaftermath of the Second World War and
with theonset of the cold war. However, by the mid -960s,the extent
of institution-building and the intensity ofpolitical and economic
cooperation were far greaterin Western Europe than in any other
region. As a res-ult, an explanatory framework developed for the
solepurpose of understanding the EU, rather than for thepurposeof
explaining a general social or political phe-nomenon. Broadly
speaking, and grossly simplifyinga diverse set of research and
scholarship, explan-ations of European integration fall into two
maincamps: (1) intergovernmental approaches, whichsee the
preferences and decisions of the nationalgovernments as primary;
and (2) supra-national ap-proaches, which see supra-national
political, social,and economic forces beyond the control of the
na-tional governments as primary.
Intergovernmental approachesThe basic assumption of these
approaches is thatmain actors in the EU are the governments of
themember-states (e.g. Hoffmann 1966, 1982; Taylor
1982; Moravcsik 1991). National governments havea clear set of
preferences about what policies theywould like to see allocated to
the European level,and what the content of the policies should
be.For example, British governments have traditionallypreferred
economic integration to political integra-tion, while German
governments have wanted both.Moreover, British governments have
wanted the EUto adopt a free-market approach to economic
in-tegration, while German governments have lookedfor the EU to
adopt a social market approach, withharmonized social and labour
market regulations.
Another assumption of the intergovernmental ap-proaches is that
governments bargain hard witheach other on the basis of these
preferences, andonly agree to outcomes at the European level if
theseoutcomes promote their preferences. This assump-tion is
usually matched to a corollary assumption,that governments possess
enormous political and in-formational resources (for example, they
have largepublic administrations), and so have a good
under-standing of the likely consequences of their actions.For
example, governments understood that estab-lishing a single market
and economic and monetaryunion would inevitable create constraints
on a rangeof important domestic economic and social policies.
At face value, one might assume that, ifgovernments are
self-interested, have varying pref-erences, and are determined not
to lose any ground
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Chapter 23 The EU as a new political system 577
when bargaining at the European level, nothing willever be done
in the EU. Indeed, this was one of theconclusions of some of the
early intergovernmentaltheorists, who assumed that European
integrationcould not progress beyond a very minimal level
(e.g.Hoffmann 1966). Nevertheless, more recent inter-governmental
approaches argue that there are goodcollective reasons for
member-state governments tohand over signicant powers to the EU
institutions,well beyond the expectations of the early
theorists(Moravcsik 1993, 1998; Pollack 1997). For example,it is
often in all the governments interests to havea common policy for
the single market (such as acommon standard for car emissions), yet
agreementcannot be reached as each government has theirown
particular policy preference which they are re-luctant to give up.
This coordination problem canbe resolved by delegating
agenda-setting power tothe European Commission, where the
Commissionworks out which is the best policy option for the EUas a
whole, which all the governments then agree tosupport. This helps
explain why delegating agenda-setting power to the Commission in
the creation ofthe single market was both in the self-interest
ofthe EU governments and crucial for the process ofEuropean
integration.
The intergovernmental approaches explain wellwhy the process of
integration stalled in the 1970s,as governments preferred national
to European solu-tions to the economic problems in that period.
Theseapproaches also explain how a convergence of gov-ernments
preferences in favourof a continental-scalemarket, and the careful
designof a setofnewdecision-making rules, enabled European
integration to berelaunched in the 1980s and 1990s.
Nevertheless, there are several aspects of Europeanintegration
that these approaches have not been ableto explain so well. They
cannot explain the increasein the powers of the European Parliament
(EP) inthe treaty reforms since the mid-1980s. In addition,if the
governments are in control of the process ofEuropean integration,
and there are no long-termconsequences beyond the collective
intentions of thegovernments, it is hard to explain why there is
declin-ing support for European integration. Indeed, froman
intergovernmental perspective, since the govern-ments run the EU,
and the governments are electedby the citizens, then there is no
democratic de-cit in the EU (Moravcsik 2002). Finally, although
intergovernmental approaches may be very usefulfor understanding
the grand bargains in the processof European integration, such as
the Single EuropeanAct or the Maastricht Treaty, they seem less
use-ful for understanding day-to-day decision-making,where there
are multiple actors and interests anda more complex set of
preferences and decision-making rules.
To understand how the EU works on a day-to-daybasis, it is more
useful to think of the EU as a polit-ical system, and apply tools
and approaches fromthe study of comparative politics along the
lines ofnational systems on which comparative politics
hastraditionally focused.
Supranational approachesThe basic assumption of these approaches
is that theprocess of European integration is a
deterministicprocess driven by underlying political, economic,and
social forces. In the early period of Europeanintegration, Ernst
Haas proposed what he called aneo-functionalist theory of economic
and politicalintegration (Haas 1958, 1961; cf. Lindberg 1963).
Atthe heart of this theory was the concept of spillover,whereby a
given action, related to a specic goal,creates a situation in which
the original goal can beassured only by taking further actions,
which in turncreate a further condition and a need for more, andso
forth (Lindberg 1963: 9). For example, a commonmarket in coal and
steel would work much more ef-ciently if there was a common market
in other goodsand services used in the production and
distributionof coal and steel. Similarly, once the free movementof
labour is established as part of the single market,with the
effective abolition of controls on the move-ment of people once
they are inside the EU, there waspressure on the member-state
governments to agreecommon justice and home affairs policies.
One variant of this approach was Bela Belassas(1961) theory of
economic integration. Belassa ar-gued that, once a
customsunionhadbeenestablished,the potential economies of scale
from such a unioncould not be met unless all barriers to the
freemovement of goods and services had been removed(in other words
in a single market). Then, once asinglemarket had been established,
themarket wouldfunction more effectively if a single currency
couldbe established, which would allow for greater price
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578 Simon Hix
transparency and reduced transaction costs of doingbusiness
across borders. Then, if a single currencywere established,
economic shocks to the currencyunion could no longer be addressed
through monet-ary policies, so there would need to be scal
transfersfrom high growth regions to low growth regions.These scal
transfers would need to be legitimizedsomehow, which would require
the establishment ofgenuine political union, with democratic
electionsfor the central institutions. In other words,
Belassapredicted a logical teleological development from acustoms
union to a political union.
Most scholars within the supra-nationalist ap-proach were not as
economically determinist asBelassa, in that they assumed that
integration wouldnot proceed without the input of actors or
groupsof actors. In other words, economic forces are in-sufcient on
their own to force states to take majorintegrationist
steps.However, in contrast to the inter-governmental view,which
emphasizes the supremacyof states and governmental actors, most
scholarswithin the supra-national framework emphasize therole of
non-state actors, such as economic andsocial interest groups and
the supra-national insti-tutions of the EU themselves (e.g. Marks
et al. 1996;Pierson 1996; Sandholtz and Stone Sweet 1997; Pol-lack
2003). For example, transnational businesses inthe early 1980s put
pressure on the governments tosupport the creation of a genuine
single market inEurope (e.g. Sandholtz and Zysman 1989).
Meanwhile, the Commission, led by PresidentJacques Delors,
played an important role in shap-ing the single market programme,
the reform of theEU budget in the late 1980s, the plan for
economicand monetary union (e.g. Pollack 2003). Similarly,
by establishing the doctrines of the direct effectand supremacy
of EC law in the early 1960s, theEuropean Court of Justice (ECJ)
has fashioned aquasi-federal legal framework for the EU, beyondthe
intentions of the signatories of the early treaties(e.g. Weiler
1991). And, the EP has interpreted thedecision-making rules of the
EU in a way that hasmaximized its inuence under the various
legislativeprocedures (e.g. Hix 2002).
Supra-national approaches explain very well theevolution from
the coal and steel community to thecustoms union. They also explain
the developmentfrom the single market to economic and
monetaryunion, and how a market on a continental scale hasspillover
effects on governments taxing, spending,immigration, and policing
policies. Overall, supra-nationalism does well to capture the
remarkable,and perhaps teleological, evolution of the EU froma
customs union in the 1960s to a full-blown polit-ical system by the
end of the twentieth century.Nevertheless, the inherent determinism
of the supra-nationalist approaches means that they are less ableto
explain why the process of European integrationslowed between the
late 1960s and the mid-1980s,or why some member-states decided to
join the EUat different times or indeed remain largely outsidethe
process of European integration (such as Norwayand Switzerland).
These approaches are also less ableto explain why the EU is more
able to adopt commonpolicies in some areas, such as environmental
policy,than in other areas, such as social policy.
Again, thinking of the EU as a political systemhelps us to
understand its internal workings in detail,which in turn has
implications for understanding thegeneral process of European
integration.
KEY POINTS
For most of its history, the EEC/EU has been mainlyunderstood by
social scientists as a unique case ofpolitical and economic
integration between sover-eign nation-states.
Intergovernmentalism focuses on how the policy pref-erences and
actions of the European governments,and particular the three most
powerful governments
(Germany, France, and Britain), shape the design ofthe EU at the
various stages of integration.
Supra-nationalism focuses on how the underlying eco-nomic,
political, and social factors and the behaviourof interest groups
and the EU institutions constrainthe choices of governments and so
further economicand political integration.
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Chapter 23 The EU as a new political system 579
COUNTRY PROFILE Israel
State of Israel (Medinat Yisrael)
State formation
In the late 19th century, the Austro-Hungarian Jew TheodorHerzl
founded the Zionist movement that strived for theestablishment of a
national Jewish state. By the end ofthe Second World War, some
500,000 Jews immigrated toPalestine, mostly from Russia and Europe
following pogromsand outbreaks of anti-semitism. Palestine became a
Leagueof Nations mandate administered by Britain in 1920.
Inde-pendence was gained in 1948.Constitution No formal
constitution. A parliamentary com-mittee has been working on a
draft constitution since 2003.
Form of government
Parliamentary democracy.Head of state President elected by
Parliament, term of7 years (no term limits).Head of government
Prime Minister assigned by the Pres-ident; traditionally the leader
of the party that holds most ofthe seats in parliament.
Cabinet Ministers selected by the Prime Minister and ap-proved
by Parliament.Administrative subdivisions 6 districts.
Legal system
Mixture of English common law, British Mandate regula-tions, and
Jewish, Christian, and Muslim legal systems.
Legislature
Unicameral parliament (Knesset): 120 seats, term of 4 years.
Electoral system (lower house)
Proportional representation.Formula DHondt.Constituencies 1
multi-member constituency for 120 seats.Barrier clause 2%
nation-wide.Suffrage Universal, 18 years.
Direct democracy
None.
Party system Results of the 2006 legislative elections:
Electorate: 5, 014, 622
100.0%.............................................................................
Voters: 3, 186, 739 63.5%
Party Valid votes % Seats
Kadima (Forward) 690, 901 22.0
29..............................................................................................................................Labour
472, 366 15.1 19
..............................................................................................................................Shas
(Sephardi) 299, 054 9.5 12
..............................................................................................................................Likud
281, 996 9.0 12
..............................................................................................................................Our
Home Israel 281, 880 9.0 11
..............................................................................................................................National
Union-National Religious Party 224, 083 7.1 9
..............................................................................................................................Age-Pensioners
of Israel to the Knesset 185, 759 5.9 7
..............................................................................................................................United
Torah Judaism 147, 091 4.7 6
..............................................................................................................................Vigor-Together
118, 302 3.8 5
..............................................................................................................................United
Arab Lists-Arab Renewal Movement 94, 786 3.0 4
..............................................................................................................................Hadash
(United Front for Peace and Equality) 86, 092 2.7 3
..............................................................................................................................Balad
(National Democratic Assembly) 72, 066 2.3 3
..............................................................................................................................The
Greens 47, 595 1.5 0
..............................................................................................................................Green
Leaf 40, 353 1.3 0
..............................................................................................................................Others
94, 740 3.0 0
..............................................................................................................................Total
3,137,064 100.0 120
Category Others includesparties with less than 1%nation-wide and
no seats.Source: Knesset.
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580 Simon Hix
Understanding the EU as a political system
A political system but not a stateA key insight of modern social
science, as it began toemerge as a discipline at the start of the
twentieth cen-tury, was that democratic and effective governmentcan
only work within a state.: which Max Weberand others understood as
a hierarchical organiza-tion, where power is concentrated at the
centre, andwhere the central authorities can use the forces
ofviolence (the police and the army) to enforce thelaw and maintain
political stability (see Chapter 4).However, this ideal type of
political organizationonly really existed in a relatively small
number ofcountries (such as France, Britain, and Sweden) andin a
rather short period of human history (from theseventeeth to
themid-twentieth centuries). Formanysocieties in Europe and
throughout the world, andfor most of human history, power and
authority wassplit between multiple different actors and levels
ofgovernment. And, with the widespread decentraliza-tion of
authority to local and regional governmentsand non-state
organizations, and with the delegationof authority to
supra-national bodies such as the EUand the World Trade
Organization (WTO), polit-ical power is now dispersed or shared in
multiplesettings (see Chapter 24). This does not mean thatthe state
as traditionally understood does not exist.However, it does mean
that politics, government,and policy-making now exist in many
contexts eitheroutside or beyond the classic Weberian state
(Badieand Birnbaum 1983).
This is precisely the situation with Europe, wherethe gradual
process of economic andpolitical integra-tion has produced a
complex allocation of executive,legislative, and judicial
policy-making powers atmul-tiple levels of government, including
the Europeanlevel. For sure, the EU is the rst genuine
supra-national polity to exist in human history, and assuch is
certainly unique. However, all political sys-tems are to some
extent unique. The US has a uniquemodel of the separation of
executive and legislativepower, France has a unique
semi-presidential modelof government, Germany has a unique model
ofinterlocking federalism, and so on. What is moreimportant from
the point of view of comparativepolitical analysis is that all
political systems face a
common set of issues, such as what powers are alloc-ated to the
central institutions relative to the lowerinstitutions, and how
decision-making should workin the central institutions.
This was one of the insights of comparative polit-ical
scientists in the 1950s, who tried to developa common framework for
dening and analysingthe complex array of political systems that
existedthroughout the world (e.g. Almond 1956; Easton1957; see also
the Introduction). There are fouressential characteristics of all
democratic politicalsystems:
1. There is a clearly dened set of institutions for col-lective
decision-making and set of rules governingrelations between and
within these institutions.
2. Citizens seek to achieve their political desiresthrough the
political system, either directly orthrough intermediary
organizations like interestgroups and political parties.
3. Collective decisions in the political system have animpact on
the distribution of economic resourcesand the allocation of social
and political valuesacross the whole system.
4. There is a continuous interaction between thesepolitical
outputs, new demands on the system,new decisions, and so on.
The EU possesses all these characteristics. First, thelevel of
institutional development and complexity inthe EU is far greater
than in any other internationalor regional integration
organization. One might evensay that the EU possesses the most
formalized andcomplex set of decision-making rules of any
polit-ical system in the world. Second, a large numberof public and
private groups, from multinationalcorporations and global
environmental groups toindividual citizens, are involved on a daily
basis intrying to inuence the EU policy process. Third, EUpolicy
outcomes are highly signicant and are feltthroughout the EU. The
direct redistributive capa-city of the EU is indeed small, since
the EU budgetis only about 1 per cent of the total GDP of the
EU.However, the single market, European social and en-vironmental
regulations, the single currency, justiceand interior affairs
policies, and the myriad of other
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Chapter 23 The EU as a new political system 581
policy outputs of the EU system have an enormousindirect impact
on the allocation of resources andsocial relationships in European
society. Fourth, theEU political system is a permanent feature of
politicallife in Europe. The quarterly meetings of the headsof
government of the member states in the EuropeanCouncil may be the
only feature that many citizensand media outlets notice.
Nevertheless, EU politics isa continuous process, within and
between the EU in-stitutions in Brussels, between national
governmentsand Brussels, within national public
administrations,between private interests and governmental
ofcialsin Brussels and at the national level, and betweenprivate
groups involved in EU affairs at the nationaland European
levels.
Conceptualizing the EU as a political system ratherthan a unique
example of regional integration en-abled social scientists in the
late 1980s and early1990s to start to apply tools and methods
fromthe comparative study of political systems to theEU (e.g.
Scharpf 1988; Streeck and Schmitter 1991;Sbragia 1992; Tsebelis
1994; van der Eijk and Frank-lin 1996; Majone 1996; McKay 1996).
These toolshelped provide answers to a new set of
generalizablequestions, such as which actors are most inuen-tial in
the EU legislative process, how independentfrom political control
is the ECJ, why do some cit-izens support the EU while others
oppose it, whydoes the EU produce some policy outcomes but
notothers? As a result, conceptualizing the EU as a polit-ical
system enabled social scientists to answer newquestions, discover
new facts, draw new analyticalinferences, and bring together
scholarship on the EUwith the general eld of comparative politics
(Hix2005).
The constitutional architectureof the EUThe Treaty establishing
a Constitution for Europe,which was signed by the member states in
Octo-ber 2004 and renegotiated in June 2007, is an effortto
simplify and codify the existing rules govern-ing the allocation of
competences between the EUand the member-states and the operation
of the EUinstitutions. Even before this treaty, however, theEU
already had a basic constitutional architecture
because there is an established division of policycompetences
and institutional powers which resultsfrom the existing treaties
and how these treaties havebeen interpreted over the years. Indeed,
one of theremarkable things about the new treaty is how little
ofthe established policy and institutional architectureof the EU it
would in fact change if it ever enteredinto force.
Box 23.2 describes the basic policy architecture ofthe EU. This
catalogue of competences is not setout in any one article of the
existing treaties, but is awidely accepted interpretation by legal
and politicalscientists of the design of the basic policy
frameworkin the EU. The EU level has exclusive responsibilityfor
the creation and regulation of the single market,and for managing
the competition and external cus-toms and trade policies that are
inherently derivedfrom this task. The EU level is also responsible
forthe monetary policies of the member-states whosecurrency is the
euro, for the common agriculturalpolicy, and the common sheries
policy. In theseareas, the EU governments no longer have any
powerto make policy at the national level.
A wide array of policy competences are sharedbetween the EU and
the member-states. In theseareas, policies are made at both the
national andEuropean levels and the European-level policies
usu-ally aim to supplement existing or ongoing policies atthe
national level. This is the case, for example, in theareas of
labour market regulation, regional spend-ing, and immigration and
asylum. The third area ofpolicies can be described as coordinated
compet-ences, in that these are policies where action
remainsprimarily at the member-state level, but the govern-ments
have accepted that they need to coordinatetheir domestic policies
collectively at the Europeanlevel because there are inevitable
effects on each otherfrom keeping these policies at the national
level. Forexample, for the states with a single currency there isa
need to coordinate their macro-economic policies,and with the
freedom of movement of persons insidetheEUthere is aneed to
coordinate somepolicing andcriminal justice policies. Finally, all
the major areasof taxation and public spending, such as
education,health care, transport, housing, welfare provision,and
pensions, remain the exclusive preserve of themember-states, with
very little EU interference inhow these policies are managed.
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582 Simon Hix
BOX 23.2 The Basic Policy Architecture of the Eu
Exclusive EU competences
Regulation of the single market, including removing bar-riers
and competition policy.Customs union and external trade
policies.Monetary policy for the member states whose currencyis the
euro.Price setting and subsidy of production under the Com-mon
Agricultural Policy.Common sheries policy.
Shared competences (where action is taken at boththe national
and European levels)
Social regulation, such as health and safety at work,gender
equality, and non-discrimination.Environmental regulation.Consumer
protection and common public health con-cerns, such as food
safety.Economic, social and territorial cohesion.
Free movement of persons, including policies
towardsthird-country nationals.Transport.Energy.
Coordinated competences (where national actions arecoordinated
at the EU level)
Macro-economic policies.Foreign and defence policies.Policing
and criminal justice policies.Health, cultural, education, tourism,
youth, sport, andvocational training policies.
Exclusive member state competences
All other policies, for example, most areas of taxationand
public spending.
Turning to the institutions, put simply, executivepowers at the
European level are shared betweenthe Council and the Commission
(see Box: Thebasic institutional architecture of the EU, in the
On-line Resource Centre). Whereas the Council sets themedium-term
and long-term policy agenda (partic-ularly via the heads of state
and government in theEuropean Council), the Commission has a
formalmonopoly on legislative initiative. The Commissionand the
member states are also jointly responsiblefor the implementation of
EU policies. Legislativepower is also shared between two
institutions: the
legislative meetings of the Council and the EP. TheEP has equal
power with the Council under themain legislative procedure, the
so-called co-decisionprocedure. However, some highly sensitive
areas ofpolicy, such as tax harmonization, are passed un-der the
consultation procedure, under which theCouncil is only required to
consult the EP beforepassing legislation. Finally, judicial power
in the EUis shared between the ECJ and national courts, whichare
primarily responsible for enforcing EU law (aspart of domestic law)
and refer cases to the ECJ if adomestic case raises a signicant
point of EU law.
KEY POINTS
The EU is not a state, in the traditional meaning ofthis word,
in that powers are shared between the EUand the member-states, the
EU is based on voluntarycooperation between the member-states,
there is nodirect EU taxation, the EU budget is small relative
toits GDP, and the EU relies on the forces of coercionof its
member-states to enforce its decisions (there isno Euro FBI or Euro
army).
The EU can be understood, nevertheless, as a polit-ical system,
in that it possesses a basic constitutional
architecture which determines the balance of powersbetween the
EU and the member-states and betweenthe institutions at the
European level, and the policiesof the EU have signicant direct and
indirect implica-tions on the economy and society in Europe.
Conceptualizing the EU as political system allows toolsand
methods from the comparative study of politicalsystems to be
applied to the EU.
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Chapter 23 The EU as a new political system 583
Vertical dimension: the EU as a regulatory stateThe dominant
policy goal of the EU is the creationand regulation of a market on
a continental scale.EU environmental and social policies, the
singlecurrency, budgetary policies, and even justice and in-ternal
affairs policies are in many respects ankingpolicies of this
dominant policy goal. These policiesmake Europes continental-scale
market work moreeffectively (the single currency), or correct
potentialmarket-failures (environmental and social policies),or
compensate potential losers from market integra-tion (budgetary
policies), or address potential socialand security externalities
from market integration(justice and interior policies). Given the
primacy ofthe single market and the centrality of EU
marketregulation policies, the EU is often described as aregulatory
state (Majone 1996). This conceptionnicely captures the contrast
between the EU andthe welfare states at the national level in
Europe,where the main policy instruments of governmentare taxation
and public spending rather than marketregulation. Whereas a welfare
state deliberately aimsto redistribute resources from one group of
citizensin society to another, the aim of a regulatory state isto
benet all citizens more or less equally.
Creation and regulationof the single marketThe single market
notionally started on 1 January1993, after the passage of almost
300 pieces of legisla-tion to enable the basic elements of the
single marketto be established. However, in practice the
singlemarket is an ongoing project, as major areas of theeconomy
(such as the provision of services and theprofessions) still
operate in separate national marketsrather than in a single
European-wide market.
The creation of the single market has both dereg-ulatory and
reregulatory elements. On the deregu-latory side, creating the
single market involves theremoval of barriers to the free movement
of goods,services, capital, and labour between the EU memberstates.
Three types of barriers had to be removed toenable this free
movement to take place.
1. The single market required the removal of certainscal
barriers, such as the harmonization of value
added tax and excise duties (on goods like alcoholand
tobacco).
2. The single market required the removal of phys-ical barriers
on the movement of goods and per-sons, such as the abolition of
customs formalities,paperwork, and inspections at borders
betweenthe member -tates. Removing border controls onthe movement
of persons was also an original aimof the single market programme,
however severalmember-states (including Britain, Ireland,
andDenmark) refused to accept that it was necessaryto remove border
controls in order for the freemovement of persons to function
effectivelyallthat was needed, they contended, was the rightto
move, reside, and work anywhere in the EU.In response, the other
member-states agreed toremove their border controls as part of the
Schen-gen Accord, which was initially outside the formalframework
of the EU but was brought into theEU framework by the Maastricht
and Amsterdamtreaties.
3. The single market required the removal of tech-nical barriers
to the free movement of goods andservices, such as separate
national product stand-ards that could be used as non-tariff
barriers.The EU had tried to establish common standardsvia
harmonized rules throughout the EU. How-ever, in the landmark
Cassis de Dijon judgment in1979, the ECJ established the principle
of mutualrecognition, whereby any product meeting thestandards of
one member-state can be legally soldin all other member-states.
This principle becamethe basis of a new approach to the creation of
thesingle market, whereby harmonization was lim-ited to minimum
technical and health and safetystandards. Another key area of
removal of tech-nical barriers was in public procurement,
whererules were establishedwhich prevent governmentsfrom favouring
home companies in public con-tracts. A host of directives have also
been passedto liberalize air, water, and road transport, andto open
up national energy, telecoms, and televi-sion markets. Regarding
the movement of capital,controls on the free ow of capital between
themember states were abolished, and the European
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584 Simon Hix
Company Statute was adopted in 2001, whichenables multi-national
companies to be registeredas a single European-wide entity.
On the reregulatory side, as part of the singlemarket programme,
the EU replaced existing na-tional regulations with new
European-wide regula-tions. The three clearest examples of this are
EUcompetition policies, environmental policies, andsocial policies.
On competition policies, the EUhas anti-trust regulations (which
outlaw a varietyof agreements between companies that would
re-strict competition, such as price-xing or predatorypricing),
prohibits government subsidies to industrythat threaten competition
and trade between themember states, and the Commission is required
toreview and vet mergers between companies with acombined worldwide
and EU-wide turnover of acertain size. On environmental policy,
common EUregulations cover, among other things, air and
noisepollution, waste disposal, water pollution, chemic-als,
biodiversity, environmental impact assessments,eco-labelling and
eco-audits, and natural and tech-nological hazards. Also, the
European EnvironmentAgency was set up in 1994 in Copenhagen to
collectenvironmental data and develop environmental fore-casts. On
social policy, EU legislation covers rights ofworkers to free
movement, health and safety at work,working conditions, worker
consultation, equalitybetween men and women, general provisions
ofanti-discrimination (which cover race, ethnic ori-gin, religion,
disability, age, and sexual orientation),and labour markets (such
as rights of part-time andtemporary workers).
The single market more or less benets all EU cit-izens. The
deregulatory side of the project enablesthe economy to function
more efciently, which be-nets businesses and consumers, creates
jobs, andproduces higher growth rates. Some uncompetitiverms are
put out of business by the new competitiverigours of the single
market. However, theses lossesare far outweighed by the new rms,
new opportun-ities, and new jobs that are created by the
worldslargest market.
The EUs reregulatory policies are also usually re-garded as
aimed to benet all EU citizens ratherthan any particular group of
citizens. EU regulat-ory policies do this by correcting certain
marketfailures that might arise in a continental-scale
market. For example, harmonized consumer protec-tion standards
enable consumers to gain informationabout the quality of products
that would other-wise not be publicly available. Health and
safetystandards and environmental standards reduce theadverse
effects (negative externalities) of markettransactions on
individuals not participating in thetransactions. Competition
policies prevent mono-polistic markets from emerging, market
distortions,and anti-competitive practices. And industry
regu-lators, through such instruments as price controls,ensure that
natural monopolies operate accordingto market practices. Put this
way, EU social regula-tions are very different to national social
policies,in that while the latter are usually geared
towardsproviding benets to particular social groups, theformer aim
to allow the labour market to functionmore efciently (Majone
1993).
Nevertheless, there are signicant indirect redis-tributive
consequences of a market on a continentalscale and the growing
network of European-levelsocial policies (Leibfried and Pierson
1995; Streeck1996; Scharpf 1997a; Kleinman 2002). The EU doesnot
have the direct redistributive capacity of nationalwelfare states,
but the emerging EU regulatory re-gime reects a particular welfare
compromise atthe European level that constrains existing
welfarecompromises and choices at the domestic level. Forexample,
the singlemarket places downwardpressureon states with higher
labour market standards (suchas Germany and Scandinavia), and
upward pressureon states with lower labour market standards (suchas
Britain and southern Europe). In addition, theredistributive
capacities of the national welfare statesare further constrained by
the restrictions onnationalscal policies as a result of economic
and monetaryunion.
Economic and Monetary Unionand the European Central Bank
The Maastricht Treaty established in 1993 a three-point plan for
Economic and Monetary Union(EMU):
1. This plan involved a timetable, with the launch ofEMU on 1
January 1999 and the introduction ofeuro notes and coins on 1
January 2002.
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Chapter 23 The EU as a new political system 585
2. It established four convergence criteria, whichmember states
have to meet to be able to join thesingle currency: (1) a stable
currency, (2) a con-vergent economic cycle with the EU average
cycle,(3) an annual government decit of less than 3per cent of GDP,
and (4) a gross public debt ofless than 60 per cent of GDP.
3. The plan established an institutional design ofEMU.
In this design, the European Central Bank (ECB) hasthe sole
responsibility of dening and implementingmonetary policy (including
setting interest rates) forthe member states whose currency is the
euro, withthe sole aim of maintaining price stability. The
ECBcomprises a six-member Executive Board, appointedby the European
Council, and a Governing Council,of the Executive Board members and
the governorsof the national central banks of the EMU
member-states. Meanwhile, the governments, meeting in theCouncil of
Economic and Finance Ministers, havethe nal say over interventions
in foreign exchangemarkets, adopt common economic policy
guidelinesfor the EU as a whole, and monitor the nationaleconomic
policies of the EU member-states.
Not all EU member-states are members of EMU.Eleven states
launched EMU in 1999Austria,Belgium, Finland, France, Germany,
Ireland, Italy,Luxembourg, Netherlands, Portugal, Spain.
Greecebecame the twelfth EMU member in 2001. Of theold fteen
states, the United Kingdom, Denmark,and Sweden chose to stay
outside EMU, and none ofthe new ten were allowed to join EMU when
theybecame members of the EU in 2004, although severalof the new
member states pegged their currencies tothe euro.
A key element of the EMU framework, which wasadded after the
Maastricht Treaty, is the Stabilityand Growth Pact. The German
government, in par-ticular, was concerned that once states had met
theinitial convergence criteria and entered EMU theymight then be
tempted to run large public decits,which would undermine the
stability of the euro,and so negatively affect the more scally
respons-ible states. The SGP was hence agreed in 1997 as away to
limit this problem, by requiring that mem-ber states must maintain
an annual budget decitof less than 3 per cent of GDP, or otherwise
face ane (established as a percentage of national GDP).
However, one problem with the pact was that ane could only be
imposed by collective agreementsamongst the governments. When
France and Ger-many, the two largest economies in EMU, were therst
major breakers of the SGP rules, no ne wasimposed, which brought
its credibility into ques-tion.
Themain theoretical framework forunderstandingeconomic and
monetary integration both generallyand in the specic context of the
EU is the optimalcurrency area (OCA) theory, developed by
RobertMundell (1961). According to this theory, independ-ent
stateswill formamonetary union if the benets ofjoining exceed the
costs. The main cost of a monetaryunion is the loss of an
independent exchange rate.With a one-size-ts-allmonetary policy,
differentialeconomic cycles between states have to be tackled
byother policies, such as labour mobility (from statesin recession
to states growing more quickly), wageexibility (where workers in
the state where there islow demand reduce their wages), or scal
transfers(from high growth to low growth states). If labourmobility
is low, if there is limited wage exibility, andif scal transfers
are small, then a group of states donot form an OCA. Put this way,
the EU is clearly notan OCA!
However, for some states, the economic benets ofEMU might
outweigh some of these potential costs.A single currency lowers
transactions costs in theeconomy (by removing the need to change
money),produces a more efcient market, leads to greatereconomic
certainty, and in general creates lower in-terest rates and higher
growth rates. When decidingwhether to join EMU a state will weigh
the extent ofthese benets against the probability that it will
nditself in a recession while the other EMU states arebooming, and
so will be forced either to lower wagesor suffer the consequences
of low labour mobilityand small scal transfers. The convergence
criteriacan consequently be seen as an attempt to create adegree of
economic convergence, which would limitthe need for wage exibility,
labour mobility, orscal transfers. In general, for states with high
levelsof trade integration with the Eurozone, the benetsof joining
EMUoutweigh the costs, since higher tradeintegration means higher
economic convergence andgreater transaction costs benets of a
single cur-rency (e.g. Krugman 1990). In contrast, for stateswith
lower trade integration and less convergent
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586 Simon Hix
-1.0%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
Aus Bel Den Fin Fra Ger Gre Ire Ita Lux NL Por Spa Swe UK Cyp
CzR Est Hun Lat Lit Mal Pol Sln SlkNet
co
ntr
ibu
tio
ns
to E
U b
ud
get
(% g
ross
nat
ion
al i
nco
me)
19952005
Fig. 23.1 Net contributions to the EU budget, 1995 and 2005
Source: calculated from data in European Commission (2006).
economic cycles, the costs of joining EMU are likelyto outweigh
the benetswhich is broadly speakingthe situation of the United
Kingdom, although thismight change.
EU expenditure policiesIn contrast to the powerful direct and
indirect ef-fects of the single market and EMU on EU citizenslives,
and in contrast to the huge public spendingprogrammes of the
national governments, the directspending power of the EU is small,
since the EUbudget represents only about 1 per cent of the totalGDP
of the EU member-states. Spread across all EUcitizens, the costs of
theEUbudget are absolutely tiny.However, for those who receive
money out of the EUbudgetnamely poorer states, farmers,
backwardeconomic regions, and research scientiststhe sumscan be
staggeringly huge.
The EU adopts multi-annual budgets: see theTable: Size and main
expenditure categories of theEU budget, 200713, in the Online
Resource Centre,for the plan for 200713. The budget categories are
alittle misleading. The main EU spending policy is theCAP, which is
a system of price support for a widerange of agricultural products
and other subsidies tofarmers. The CAP consumes more than 30 per
centof total EU spending. The second main area of EU
spending is on regional policy, covered under theheading
economic and social cohesion. Spendingin this area is targeted in
economically backward re-gions, regionswith high levels of
unemployment, andregions undergoing major industrial
restructuring.EU regional funds are mainly spent on infrastruc-ture
projects in these regions, such as building roads,schools,
airports, and telecommunications systems,and together consume about
the same proportion ofthe EU budget as the CAP. The third main area
ofEU spending is on scientic research. Most of theEUs research and
development funds are distrib-uted to networks of researchers
working on someof the leading areas in the natural sciences, such
asbiotechnology and telecommunications.
Figure 23.1 shows who got what under the EUbudget in 1995 and
2005 as a proportion of eachmember-states gross national income. In
general,there are six main net contributor states: Austria,Germany,
Luxembourg, the Netherlands, Sweden,and the United Kingdom. Prior
to the 2004 enlarge-ment there were four main net beneciary
states:Greece, Ireland, Portugal, and Spain. These stateswere the
main recipients of EU regional funds, andforGreece and Ireland in
particular the proportion oftheir national income received from the
EU budgetis large: about 4 per cent of total gross nationalincome
for these two states. Nevertheless, after the
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Chapter 23 The EU as a new political system 587
2004 enlargement, the benets to Greece, Ireland,Portugal, and
Spain fell considerably, as the regionalfunds began to be targeted
towards the poorer re-gions in many of the new member-states. Also,
afterenlargement, the Netherlands replaced Germany asthe largest
net contributor to the EU budget as apercentage of its GNI and as a
percentage of theDutch population, which played a signicant role
inthe anti-Europe campaign in the 2005 referendum inthe Netherlands
on the EU Constitution.
In general, the bestway to understandEUspendingpolicies is to
see them as a combination of solidarityand side payments. On the
solidarity side, transfersthrough the EU budget have generally
passed fromthe richer states to the poorer states, on the
groundsthat the EU is more than simply an economic union,and so
there should be some mechanism for redis-tributing wealth from the
richer parts of Europe tothe poorer parts. On the side-payments
side, how-ever, most EU spending policies are the result ofspecic
intergovernmental bargains, where memberstates who expect to lose
(or who do not expect to winas much as other states) from major
policy changesin the EU demand some compensation out of theEU
budget. For example, in the Treaty of Romenegotiations, France
proposed the CAP, as a sub-sidy regime mainly for French farmers,
because thecommon market was expected to benet
Germanysmanufacturing-based economy more than France.Similarly, in
return for agreeing to the single marketprogramme, which was
expected to benet the mainexporting economies of central
andnorthernEurope,Spain, Italy, Portugal, Ireland, and Greece
requesteda doubling of EU spending under the regional funds,to
enable them to compete on a level playing eld.
In addition, once spending policies have been setup they are
very difcult to change, even if theoriginal policy aims are no
longer justied. This isbecause any change to the EU budget requires
un-animous agreement amongst the governments. Theclearest example
of this is the CAP, which encouragesoverproduction and
overintensive land-use, benetslarger farmers more than smaller
farmers, createsnumerous trade disputes with the EUs partners,
anddepresses world agricultural prices by subsidizing theexport of
EU agricultural products, and so devastateslarge parts of the
developing world. As long as un-animity is maintained for budgetary
agreements, the
French government will not agree to any changes tothe CAP unless
it receives something else in return.
Interior policies and externalrelationsFinally, there are
twomain areas of EUpolicy-makingthat are not strictly related to
theEUsmain economicpolicies:
the array of justice and interior affairs policies,which
includes immigration, asylum and otherpolicies on the free movement
of persons, as wellas police and judicial cooperation;
the EUs external relations policies, which includetrade
policies, development and humanitarian aid,the Common Foreign and
Security Policy (CFSP),and European Security and Defence
Cooperation(ESDP).
While in economic terms the EU is more a reg-ulatory state than
a welfare state, where the EUsinterior and external relations
policies are concerned,the EU is developing some elements of a
secur-ity state, in that these policies inuence how theEU
member-states manage the internal and externalpolitical rights,
responsibilities, and security of theircitizens.
Internal sideOn the internal side, the Maastricht Treaty
estab-lished the Justice and Home Affairs pillar of theEU, which
brought into the legal framework of theEU a number of existing
intergovernmental cooper-ation arrangements between the interior
ministriesof the EU member-states. These provisions coveredthe
removal of border controls between the member-states, immigration
and asylumpolicies and commonpolicies towards other third-country
nationals, andpolice and judicial cooperation to combat
drug-trafcking, terrorist activities, cross-border crime,and
illegal immigration. Initially EU policies in theseareas were made
by intergovernmental decision-making procedures: the governments in
the Councilhad to agree unanimously, the Commission sharedthe right
of legislative initiative with the member-states, the EP had very
little say, and there was almostno judicial review by the ECJ.
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588 Simon Hix
This model was then reformed in the AmsterdamTreaty, which
separated the policies covering themovement of persons
(immigration, asylum, internaland external borders, etc.) from the
police and judi-cial cooperationpolicies. The
free-movementpolicieswere set up in the main body of the EU treaty
in theframework of a new area of freedom, security andjustice,
where the Commission now had a monopolyon legislative initiative,
some policies were adoptedin the Council by qualied majority
voting, the EPhad some legislative power, and the ECJ
exercisedjudicial review. Since the Amsterdam Treaty, the EUhas
adopted a large number of legislative acts in thisarea covering,
among other things, common rulesfor non-EU nationals working in the
EU, the rightof third-country nationals to family reunication,an EU
long-term residence status for third-countrynationals who have
resided in a member state for veyears, and the admission of
third-country nationalsas students, vocational trainees, or
volunteers.
External sideOn the external side, since the establishment of
acommon market, the EU has had a single externaltrade policy, where
the Commission represents theEU in the World Trade Organization
(WTO) andin bilateral and multilateral trade negotiations. TheEU
has also developed an array of external eco-nomic policy
instruments that it uses to project softpower on the world stage
(see Chapter 25). Theseinclude direct humanitarian and economic
assistanceas well as various preferential-trade agreements, suchas
the European Economic Area (EEA), association
agreements, free tradeagreements, partnershipagree-ments (for
example, with the EU member-statesformer colonies in Africa, the
Caribbean, and thePacic), inter-regional association agreements
withother regional trade blocs, and mutual recognitionagreements
(mainly with the US).
External security and defence policies developedmore slowly.
Defence cooperation was mainly man-aged through NATO rather than
the EU. However,foreign policy cooperation between the EC mem-ber
states began in the 1970s, and the MaastrichtTreaty formally
established the CFSP pillar of theEU, to which the Nice Treaty
added the ESDPasthe European pillar of the NATO transatlantic
de-fence alliance. Under CFSP, the EU member-statesadopt common
strategies and common positionsby unanimity, which set out the EUs
position ona key foreign policy issue. Then, the EU member-states
only require a qualied majority vote to adopta joint action
implementing a common position.This combination has allowed the EU
to act in awide variety of areas. For example, the EU adopteda
common strategy towards Russia in 1999 and theMediterranean in
2000, the EU took an active collect-ive role in the conict in the
former Yugoslavia, andin 2003 the EU adopted a common European
Secur-ity Strategy, which sets out how and why EU securitypolicies
differ from the US administrations pre-emptive strike doctrine.
Nevertheless, a genuinelycommon EU foreign policy is inevitably
hamperedby the conicting security and foreign policy prefer-ences
of the key EU member-states, as was so clearlydemonstrated in the
internal rift in the EU overwhether to support the US in the second
Iraq war.
KEY POINTS
Regulation of the free movement of goods, services,capital, and
labour is the main policy instrument, aspart of the creation and
organization of the singlemarket.
Economic and monetary union is a complement tothe single market,
in that a single market functionsmore effectively with a single
currency, and a singlecurrency governing by an interdependent
centralbank ensures economic stability.
EU expenditure policies, in contrast, are a secondarypolicy
instrument of the EU, and have mainly been
used to enablemajor steps in the process of economicintegration
by consensus.
The EU has begun to expand beyond economicpolicies, into justice
and interior affairs policies andforeign and security policies, but
policy-making inthese areas has developed much more slowly.
The basic policy architecture of the EU, where
acontinental-scale market is created and regulatedat the European
level while spending and securitypolicies remain largely at the
national level, meansthat the EU is more a regulatory state than a
welfarestate or security state.
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Chapter 23 The EU as a new political system 589
Horizontal dimension: a hyper-consensus systemof governmentThe
main determinant of how policies are made bythe central
institutions in a political system is howfar the power to set the
agenda and the power to vetodecisions from being taken are
centralized in a singleactor or dispersed between multiple actors.
At oneextreme, a political system can have a single agenda-setter
and veto-player, for example where there issingle-party government
and executive dominanceof the legislature. At the other extreme,
multipleactors could potential veto any change to existingpolicies,
for example where there is coalition govern-ment between several
political parties or where thereis a separation of powers between
the executive (thepresident) and the legislature (e.g. Tsebelis
2002).In the EU, agenda-setting powers are split betweentwo
institutions and multiple actors have the abilityto block policy
changes in the EUs legislative pro-cess. As a result, the EU has an
extremely consensualmodel of government.
Executive politics: competingagenda settersFirst of all,
agenda-setting powerin terms of whosets the overall policy agenda
of the EUis splitbetween the heads of government in the
EuropeanCouncil and the Commission. The heads of gov-ernment,
meeting in the European Council, decideon treaty reforms, which
determine the allocationof powers between the EU institutions, and
set themedium-term policy agenda, by inviting the Com-mission to
initiate legislation in a particular policyarea. The European
Commission, meanwhile, hasa formal monopoly on the initiative of
most EUlegislation.
In the European Council, political leadership, inthe form of the
presidency of the Council, rotatesevery sixmonths between
themember-states (Hayes-Renshaw and Wallace 2006; Tallberg 2006).
Somemember-states are clearly better at running the pres-idency of
the Council than others. For example,larger member-states generally
have larger adminis-trative capacity to manage the business of the
EU.However, the largest member-states tend also to try
to place their domestic political issues on the EUagenda, and
are less concerned about coordinatingthe overall policy agenda with
the Commission andthe other member-states. Furthermore, the
powersof the Council presidency are actually quite limited.This is
because the presidency cannot initiate legisla-tion, and must deal
with legislation that has alreadybeen initiated by the Commission
and may alreadyhave been through several stages of
negotiations.Nevertheless, every member-state tries to make
pro-gress on several key policy issues during its period inthe
presidency, and so tries to coordinate its policyideas with the
Commission well before taking overthe leadership reins in the
Council.
The Commission, on the other hand, has tra-ditionally been
regarded as being politically andinstitutionally committed to the
process of Europeanintegration, and so is often assumed to have
policypreferences that are more integrationist than
mostmember-states. For example, in the process of cre-ating the
single market, the Commission generallywanted legislation that
promoted further marketintegration or a high level of EU-wide
regulation.Nevertheless, this view of the Commission as
anintegrationist preference outlier may be unfoun-ded. The
commissioners are appointed by nationalgovernments and most
commissioners have strongties to the political parties who chose
them and seekto return to domestic politics after their careers
inthe Commission. Hence, commissioners are unlikelyto be very much
more pro-integrationist than thegovernments that appoint them.
Also, below the levelof the commissioners, research has shown that
thesenior ofcials in the Commission bureaucracy havepolicy
preferences that are typical of politicians fromthe member-states
from which they come and fromthe national political parties to
which they support(Hooghe 2001).
In addition, since the college of commissionersformally decides
by a majority vote, the Commis-sion generally initiates policies
that are close to thepolicy preferences of the median member of
theCommission (Crombez 1997; Hug 2003). Neverthe-less, whereas the
average member of the Commission
-
Caramani, Comparative Politics chap23.tex V1 - October 19, 2007
2:26 P.M. Page 590
590 Simon Hix
is probably not a policy outlier on the question ofthe speed and
extent of European integration, theleftright policy location of the
Commission haschanged dramatically in recent years. The
Table:Make-up of the Prodi and Barroso Commissions,in the Online
Resource Centre, shows that whereasthe Prodi Commission was
relatively evenly bal-anced between left and right, a clear
majority of themembers of the Barroso Commission were on
thecentre-right. This change is partly explained by theshifting
make-up of the governments (who appointthe commissioners): from a
centre-left majority inthe late 1990s to a centre-right majority in
the early2000s.However, the shift is also explainedby a
changeintroduced by the Nice Treaty, whereby the
largermember-states no longer have two commissionerseach. It was
common practice for the larger member-states to appoint one
commissioner from each sideof the political divide, which
inevitably led to a bal-anced Commission. Now that each member
state hasonly commissioner, the make-up of the Commissionmirrors
the political make-up of the Council at thetime that the
commissioners are appointed.
Bicameral legislative politics:rising power of the
EuropeanParliamentThe most signicant change over the last
twentyyears in the way the EU institutions work has beenthe steady
increase in the powers of the EP. Origin-ally, the governments in
the Council dominated thelegislative process, and theEPhad a
limited right to beconsulted. However, with the programme to
estab-lish the singlemarket, which required the adoption ofover 300
pieces of legislation, the EP was granted tworeadings of most major
pieces of legislation and, as aresult, was able to have a signicant
impact on howthe single market was designed (Tsebelis 1994).
TheMaastricht Treaty then established the co-decisionprocedure,
which was extended and reformed by theAmsterdam Treaty. As a
result, today the EP and theCouncil have equal power in the
adoption of mostpieces of EU legislation.
Figure 23.2 describes the main stages in the co-decision
procedure. The Commission is responsibleforproposing legislation to
theParliament andCoun-cil. The Parliament then adopts an opinion on
the
legislation, in the form of a series of amendments.These
amendments are prepared in one of the Par-liaments committees,
where one of the members ofthe EP, an MEP (the rapporteur), is
responsiblefor writing the Parliaments report on the bill
andshepherding the legislation through the committeeand the full
plenary. Once the plenary of the Par-liament has adopted the report
the Council thentakes a common position on the bill. If the
textsadopted by the Council and Parliament are identicalafter the
rst readings, the legislation is adopted andbecomes law. If the
texts are not identical, the le-gislation passes back to the
Parliament for a secondreading and back to the Council for a second
reading.If the two institutions still cannot agree a Concili-ation
Committee is convened, which is composedof twenty-seven MEPs and
one representative fromeach of the twenty-seven EU governments. If
theConciliation Committee reaches an agreement on ajoint text, this
is then put to the Parliament and theCouncil for a nal, third,
reading. This may soundcomplicated. However, the procedure is
remarkablyefcient, in that the EU adopts approximately 100pieces of
legislation a year, about fty of which passthrough the co-decision
procedure. Also, about halfof the bills through the co-decision
procedure are ad-opted after just the rst reading. Because the
majorityin the EP is independent from both the Commissionand the
Council, the EP is an extremely powerfullegislative actor.
When voting on legislation the Council usuallyacts by a system
of weighted voting known as qual-ied majority voting (QMV).
Unanimous voting iskept for some highly sensitive policy issues,
such astax harmonization. Table: Qualied-Majority Vot-ing (QMV) in
the Council, in the Online ResourceCentre, shows how the QMV system
works. In gen-eral, larger states have more votes than smaller
states,which translates into a greater chance of being onthe
winning side in a voteas represented by thepower column. The system
was reformed by theNice Treaty, where the larger member-states
gaveup one of their two commissioners in return formore inuence
under QMV in the Council. Thedecision-making threshold was also
raised slightly,making it more difcult. Voting rarely takes placein
the Council, as there are strong incentives forthe governments to
decide by consensus (Hayes-Renshaw and Wallace 2006). However, when
votes
-
Caramani, Comparative Politics chap23.tex V1 - October 19, 2007
2:26 P.M. Page 591
Chapter 23 The EU as a new political system 591
CommissionProposes directive or
regulation
Parliament 1st readingAdopts opinion(amendments)
Council 1st readingAdopts common position
Parliament 2nd readingProposes amendments
Council 2nd readingProposes amendments
Conciliation CommitteeAgrees joint text
Parliament 3rd readingVotes on joint text
Council 3rd readingVotes on Joint Text
LAW (if Council and EP texts are same)
LAW (if Council and EP texts are same)
LAW (if Joint Text approved by Council and EP)
LAW (if Council and EP texts are same)
Fig. 23.2 The co-decision procedure
do take place, divisions in the Council split the gov-ernments
along geo-political, economic, as well asideological lines: for
example, north vs. south, eastvs. west, net contributors vs. net
beneciaries, andleft governments vs. right governments (e.g.
Mattila2004).
Table 23.1 shows the number of seats permember-state in the EP.
The size of the Parliament hasincreased tenfold since it was rst
established inthe early 1950s, and has almost doubled in size
sinceit was rst elected in June 1979. The number ofseats per
member-state has also been changed withsuccessive enlargements.
However, these numbers are misleading, in thatthe MEPs do not
sit or vote along national lines. Ever
since the rst session of the Parliament in September1952, the
MEPs have formed transnational politicalgroups, and sat in the
Parliament along leftrightlines. As Figure 23.3 shows, the European
PeoplesParty-European Democrats (which brings togetherall the main
Christian Democratic and conservat-ive parties) was the largest
group in the 19992004and 20049 Parliaments, with the Party of
EuropeanSocialists (PES) (which brings together all the so-cialist,
social democratic, and labour parties) thesecond largest. Between
these two groups is a coali-tion of centrist and liberal parties:
the Alliance ofLiberals and Democrats for Europe. There are
twosmaller parties who sit to the left of the (PES): acoalition of
green and left-regionalist parties (the
-
Caramani, Comparative Politics chap23.tex V1 - October 19, 2007
2:26 P.M. Page 592
592 Simon Hix
Tab
le23
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embe
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sea
tsin
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ent
Sept
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ar.
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June
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1952
1957
1973
1979
1981
1986
1994
1995
2004
2004
2007
2009
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man
y18
3636
8181
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1014
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3681
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1015
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