Debating European Integration

Why european integration emerged

• devastation of two world wars

• desire for lasting peace and stability

• economic reconstruction and interdependence

• managing globalisation collectively

Alliance of sovereign states

Members remain States, and voluntarily cooperate

Supranational

States transfer some authority to EU institutions (EU law can override national law)

intergovernmental

States retain control and decisions are mainly made by governments

Treaty based powers

the EU can act only in areas defined by treaties

legal supremacy

EU law is legally binding and takes precedence in areas of EU competence

principle of subsidiarity

decisions should be taken as closely as possible to citizens, the EU acts only when objectives cannot be sufficiently achieved by States.

Neo-functionalism

the idea of spillover, where integration in one sector creates pressure for integration in others.

spillover happens because…

• technical interdependence

• Interest groups push for harmonisation

• Institutions encourage further integration

spillover works best when…

• high economic interdependence

• strong supranational institutions

• limited nationalist resistance

historical institutionalism

‘institutions matter’ meaning earlier decisions shape future options as described through path dependence

path dependence

once on a path, it is harder to reverse, and while benefits increase over time, so do the exit costs

critical juncture

a short window where major change is possible, often created in moments of crisis

Intergovernmentalism

national governments are the main actors, and integration reflects national interests

key features of intergovernmentalism

• powerful states dominate negotiations

• member states control speed and depth

• integration does not transform states

liberal intergovernmentalism

a two-level process

1.) Domestic Level: governments bargain with interest groups and form national preferences

2.) EU level: governments negotiate with each other

with an outcome of binding agreements where sovereignty is pooled strategically to solve cooperation problems.

—> strategic choice rather than automatic spillover

Constructivism

European identity is socially constructed, where language and norms create reality and integration is dependent on shared values. This implies integration is not only about money or power, but also beliefs.

Federalism

The division of power between levels of government, where each has autonomy —> moving towards a United States of Europe

Nation-State

• clear government structure

• Parliament initiates and passes laws

• government accountable to voters

• one constitution and one people

European Union

• no single government

• Multiple institutions share power

• citizens are represented directly (EP) and indirectly (Council)

• hybrid system; part international organisation, part political system

Commission role in OLP

drafts and proposes legislation, the only insititution with the formal right of innitiative

Citizens, interest groups role in OLP

consultations, lobbying and impact assessments

European Parliament + Council of Ministers role in OLP

Joint co-decision who can ammend, approve or reject proposals

Nations/local authorities role in OLP

implementing laws

Commission and CJEU role in OLP

monitor compliance and enforcement

European Commission

considered the executive arm, in charge of implementing policies and budget, represents the EU externally and is seen as the “Guardian of Treaties”

Structure of the European Commission

• 1 president

• 6 vice-presidents

• 20 Commissioners

critiques of the Commission

too powerful and insufficiently accountable

Structure of the European Council

• Heads of State or Government

• President of the European Council

• Commission President

European Council

sets the overall political direction but has no formal lawmaking power. Functions as strategic leadership and a crisis management institution

Structure of the Council of the EU

• one minister from each country

• dependent on policy area

Council of the European Union

is the co-legislator with the European Parliament and in charge of executive coordination handling CFSP, enlargement, budget and macroeconomic coordination

Council of the EU presidency

rotates every six months, Lisbon introduced ‘trio presidency’ (three-country teams)

Council of the EU voting

Post November 2014 a proposal passes if 55% of Member States representing 65% of the EU population

European Parliament

the only directly elected EU institution (every 5 years) which represents the citizens. It is a co-legislatory, has budgetary authority and supervises the Commission

Limitations of the European Parliament

it cannot initiate legislation and is often seen as not a real parliament as it has limited power and sovereignty

Lisbon Treaty (2007) Key Changes

• More power to the EP

• Stronger role for national parliaments

• Permanent President of the European Council

• High Representative for Foreign Affairs

• QMV as standard

• Charter of Fundamental Rights became legally binding

• Right to leave the EU (Art. 50)

Party groups in the European Parliament

• EPP

• S&D

• Renew

• Greens/EFA

• ECR

• PfE

• The Left

• ESN

• NI

rule for party groups in the European Parliament

at least 23 MEPs from 7 countries to form a group

European Court of Justice

the ultimate interpreter of EU law who ensures treaties are respected

Purpose of the Lisbon Treaty

Make the EU more democratic, efficient and coherent

EU as a policy-making State

it produces laws and policies that directly affects its Member States and citizens

Key characteristics of EU decision-making

• shared authority

• compromise

• institutional interdependence

• few proposals completely fail

Disadvantages of EU decision-making process

A compromise may result in weaker or less ambitious policies and can generally be slow

exclusive competence

only the EU can legislate

shared competence

Member States act where the EU has not or decided to not act

Supporting competence

Member States retain all right to action, the EU can only offer support

Subsidiarity

the EU acts only when supranational is more effective than national level intervention

Proportionality

EU action must not exceed what is deemed necessary

Regulations

directly applicable to all Member States and automatically becomes law without the need for national legislation

directives

a set of goals and deadlines which Member States must implement through national law, allowing flexibility in implementation

decisions

binding only on specific actors (Member States, Companies, Individuals)

Recommendations

not legally binding, but instead provides guidance

Opinions

not legally binding but expresses institutional views

transposition

the process of converting directives into national law

Constraints on EU policymaking

• public opinion

• institutional constraints

• Member State resistance

• Legal and political enforcement tools

economic rationale for market integration

Open markets promote growth and prosperity. By reducing barriers between countries, the EU creates a larger, more efficient economic area.

Economic benefits to lowering trade barriers

• a larger market

• increased competition

• free movement of factors of production

• economies of scale

• reduced production costs

• consumer benefits

• encourages technological progress

• reduces administrative costs

comparative advantage

Countries specialise in producing goods and can produce at lower opportunity costs

Winners from market integration

• workers and industries linked to comparative advantage sectors

• high-productivity industries

• export industries

Losers from market integration

• workers in industries with a comparative disadvantage

• regions dependent on declining industries

• less competitive sectors

EU’s response to losers from integration

• structural funds

• European Regional Development Fund (ERDF)

• European Social Fund (ESF)

• Cohesion fund

economies of scale

average costs fall when production increases, leading to intra-industry trade

Industry shake-out

firms faced increased competition, prices fall and profit margins decrease, some firms cannot compete and exit the market

Importance of EU competition policy

firms may try to avoid competition, collude or form monopolies

Powers of the EU Commission in competition policy

• investigate firms

• conduct inspections

• impose fines (up to 10% of global turnover)

State Aid

government financial support to companies, according to EU rules it is generally illegal

Effects of leaving an integrated market (Brexit)

• increased uncertainty

• Higher trade costs

• lower investment

• reduced innovation

EU regional/cohesion policy

the EU’s main investment policy aimed at reducing economic, social, and territorial inequalities between regions (mainly caused by market integration)

Three main cohesion policy funds

• European Regional Development Fund (ERDF)

• European Social Fund (ESF)

• Cohesion Fund

European Regional Development Fund

invest in regional economic development and promote economic growth

European social fund

improve employment and social inclusion by improving labour market opportunities

Cohesion Fund

support the poorest member states (GNI below 90% of Europe’s average) to help them ‘catch up’

cohesion policy 1957 - 1987

establishment of cohesion principles in the Treaty of Rome

• ESF creation

• ERDF creation

cohesion policy 1988 reforms

more focus on the poorest regions and introducing long-term investment planning

Cohesion Policy 1992 Maastricht Treaty

created the cohesion fund

cohesion policy 2000 Lisbon Strategy

significant budget increases to make the EU more competitive

cohesion policy 2007 - 2013 reforms

simplification of rules and a new focus on innovation and environment

Types of cohesion policy funded topics

• transport infrastructure (Bulgaria)

• Water infrastructure (Croatia)

• Tourism development (Hungary)

Recovery funding

created after COVID-19 to complement cohesion policy

Recovery and Resilience Facility (RRF)

for green transition, digital transformation and economic recovery

REACT-EU

for crisis recovery and regional resilience

INTERREG

promotes cooperation between regions across borders with a goal of solving shared problems

INTERREG A (Cross-border cooperation)

cooperation between neighbouring regions to reduce border barriers

INTERREG B (Transnational Cooperation)

cooperation between larger regions across multiple countries to solve common regional problems

INTERREG C (Interregional Cooperation)

exchange of knowledge between regions across Europe to share best practices

Criticisms of cohesion policy

• poor planning

• poor management

• corruption

• political influence

• lack of coordination

• poor cost-benefit analysis

Intra-EU mobility

the free movement of EU citizens between EU Member States for different purposes

Inequality of labour migrants

labour mobility does not always guarantee equal living conditions as they face:

• lower wages

• poor housing

• job insecurity

• social exclusion

—> freedom of movement exists legally but is still unequal in practice

Barriers to labour mobility

• institutional

• practical

• administrative

• psychological

push factors for labour migrants

low wages, unemployment and poor economic conditions

pull factors for labour migrants

higher wages, job opportunities and better living conditions

translocal connections

people maintain links with home countries

social networks

friends and family influence migration

household decision-making

migration decisions are made collectively

mental threshold

emotional attachments to home

trajectory factors

migration routes influence decisions

regular labour mobility

the most common, where workers move freely and under the same conditions as nationals

cross-border labour mobility

workers live in one country and work in another

posted workers

workers who are temporarily sent to another EU country by employers however they remain employed in their home country