Frank Naert

The new European Union economic governance: what about accountability?

The euro crisis marked the start of the so-called ‘new European Union economic governance’. This new economic governance brings along different kinds of changes in the status of decision-making actors. Some of these changes involve power shifts, which can be categorised as either vertical or horizontal. Vertical power shifts transfer powers between different levels of government, usually from the national level to the European Union level. Horizontal power shifts transfer powers away from discretionary decision-making by governments to independent institutions. The new economic governance also implies a restriction in the discretionary decision-making power of governments by the imposition of policy rules. In this article, the accountability problems involved with these power shifts are analysed. It finds that, overall, the implementation process of the new economic governance has harmed accountability. Points for practitioners The key implication of this article is that the new governance arrangements made by the European Union to tackle the euro crisis are lacking in accountability and legitimacy. The moves towards more rules replacing policy discretion and towards entrusting policies to independent agencies rather than politically accountable governments are to the detriment of political accountability. Policy efficiency comes at a high price in terms of political acceptance as trust in the European Union is negatively influenced by the new governance system. Practitioners should keep this in mind when designing governance systems.

The New EU Economic Governance: Vertical and Horizontal Power Shifts

The euro crisis made visible the omitted stage in the European integration process. The EU jumped from the common market straight to the monetary union, neglecting the formation of the economic union. The new EU economic governance is a combination of a vertical shift of competences, i.e. from one level of government to another level, and a horizontal shift of powers and competences, i.e. from elected governments to unelected government bodies entrusted with (parts of) government policies, from discretionary policy towards rules. In both types there is a risk of accountability problems, although of a different kind.The purpose of this paper is to analyze the new EU economic governance within the conceptual framework of these vertical and horizontal shifts. This two-dimensional approach offers a better analytical tool than the more traditional one-dimensional fiscal federalism approach. In the first part of the paper the focus is on the policy domains that are the objects in the shifting process. Budgetary policy mainly is at stake, but also banking regulation and monetary policy are partly involved. The second part of the paper deals with the relevant aspects of the theories on the division of powers along vertical and horizontal lines. The fiscal federalism approach to vertical separation and the time consistency theory on the horizontal distribution of power are briefly exposed. In the third part the power shifts occurring within the new EU economic governance are presented and defined in terms of our framework of vertical and horizontal power shifts. Finally the accountability problems of these shifts are analyzed.

Competition Authorities and Regulators in Belgium: Hierarchy versus Cooperation

This paper provides an analysis of the possible relationships between the competition authority and sectoral regulators. The relevant literature is first discussed and then applied to the Belgian situation. As in so many other countries, Belgium is going through a difficult search process to find the appropriate relationship. Nevertheless, we might be able to take a relatively unique direction in the future. It is not unimaginable that a constellation is developing which will put the competition authority on a higher hierarchical level than the sector regulators, by installing it as the body of appeal for the decisions of the sector regulators.