hix-the eu as a new political system.ch23_in_caramani

Caramani, Comparative Politics chap23.tex V1 - October 19, 2007 2:26 P.M. Page 573

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.


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.


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 )


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



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


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.



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.


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



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.


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.



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


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.



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


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



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.


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.



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


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



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 Joint Text approved by Council and EP)


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


592 Simon Hix

Tab

le23

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embe

r-st

ates

sea

tsin

the

Euro

pean

Par

liam

ent

Sept

.M

ar.

Jan.

June

Jan.

Jan.

June

Jan.

May

June

Jan.

June

1952

1957

1973

1979

1981

1986

1994

1995

2004

2004

2007

2009

Ger

man

y18

3636

8181

8199

9999

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ce18

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8181

8187

8787

7878

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eu citizens

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