Jukka Snell

Varieties of Capitalism and the Limits of European Economic Integration

This chapter considers European economic integration from the perspective of varieties of capitalism. It notes the main threats that integration potentially entails both for liberal and coordinated market economies, and assesses the likelihood of damage to the different models, in particular following the Lisbon Treaty. It is argued descriptively that both types of capitalism can continue to coexist in the European Union, and normatively that it is vital that the integration project is managed in a way that does not fundamentally endanger them.

Internal market: an introduction

The internal market has been at the heart of the European integration project from the very beginning. The Treaty of Rome was built around a common market. The revival of integration in the 1980s focused on creating a single market. Many of the fundamental principles of European law have been based on and shaped by the needs of the internal market. For example, in Van Gend the Court of Justice reasoned that ‘[t]he objective of the EEC Treaty, which is to establish a Common Market, ... implies that this Treaty is more than an agreement which merely creates mutual obligations between the contracting States’,1 and used this to ground the principle of direct effect. In Costa v ENEL the Court proceeded to hold that the principle of primacy was needed to ensure that the objective of the Treaty, the common market, was not undermined by conflicting national laws.2 The profound legal, political, and policy pressures on the internal market make the focus of this book on the project as a whole timely. First, there is an increasing awareness of the limits of the internal market. The imperative of broadening its scope and deepening its intensity by, for example, establishing a capital markets union in support of EMU, has been examined by policy-makers in Brussels and national capitals. Secondly, the full consequences of the successive EU enlargements for the integration project, including the internal market, are still unfolding. Thirdly, the state of the Eurozone (the duration and implications of the euro-problems have now rendered the term ‘crisis’ inadequate to describe it) and the emerging mistrust of EU decisionmaking by an increasingly vocal public have raised existential questions for the process of EU integration. The pressures have manifested recently for example in the context of a New Settlement for the United Kingdom,3 and the Brexit referendum, while the processes surrounding the adoption of the Services Directive represent an earlier example.4 This is the right juncture to step back and focus on the internal market as a whole. Furthermore, and the undoubted centrality of the internal market to the integration project notwithstanding, there have been a surprisingly small number of books, with some notable exceptions,5 that focus on it as an object of research. Each of the four freedoms has attracted plenty of attention, but the entirety of the internal market has not