Mitchell P. Smith

Autonomy by the Rules: The European Commission and the Development of State Aid Policy

The debate between theorists of European construction concerning the degree of autonomy of supranational institutions has begun to yield concrete rewards. Advances in our understanding of the emerging European polity have shown that these institutions are relatively independent actors in the European integration process; the critical question remains precisely how, where and why supranational autonomy is circumscribed by national interests, and how this relationship changes over time. While state aid is unrepresentative of other policy areas because of the exclusive competence exercised by the Commission, two aspects of the first experience of state aid policy are generalizable. First, the means by which the parameters of the Commission’s authority have been defined and by which the DG-IV itself has sought to expand that authority are similar to that for other policy areas. Second, as the work of the Commission shifts away from primary legislation and more toward a focus on implementation and enforcement, the tasks of other parts of the Commission become more like those of DG-IV. Thus DG-IV’s application of state aid policy can provide insight into problems faced by DGs in other policy areas and strategies of policy influence and effective enforcement.

All Access Points are Not Created Equal: Explaining the Fate of Diffuse Interests in the EU

According to literature on organised interests in the European Union, the European Parliaments Environment Committee (ENVI) gives environmental interests a potent point of legislative access. Yet while ENVI helped sustain the EPs commitment to environmental interests in the case of the End-of-Life Vehicles Directive adopted in September 2000, it did not do so for REACH, a regulatory framework for the chemicals sector adopted by the EP and Council in December 2006. Ultimately, the value of legislative access for organised interest groups depends on the extent to which they have privileged interactions with a node in the policy-making apparatus and the degree to which actors in the policy-making process defer to the particular institutional node. For environmental interests, both privileged interactions between environmentalists and ENVI and deference to the committee decline when environmentalists seek regulations that impose concentrated costs on producers. Such instances invoke calls to protect industrial competitiveness and intensify conflict between EP committees.

In pursuit of selective liberalization: single market competition and its limits

Within Europes single market, private sector firms and business associations have sought to use EC competition rules to broaden competition in a range of public sector activities. Has capitals ability to pursue its interests at multiple levels within the European polity rendered national governments less able to define the timing, scope, and extent of economic liberalization? When and how can governments exercise political regulation of markets in the face of potent liberalizing forces? The article draws on evidence from three areas in which European Community institutions have articulated a clear logic of liberalization and private sector actors have appealed to single market competition rules to broaden market access. In each area - the procurement of goods and services by public authorities, the German banking sector, and postal services - private sector actors have succeeded in legal proceedings against government practices that restrict competition. However, the study finds that the parameters of liberalization ultimately depend on the selective incentives faced by private sector actors, the needs of domestic political institutions, and the intensity of government preferences.

Kicking the Can Down the Road to More Europe? Salvaging the Euro and the Future of European Economic Governance

This article anayzes the future of European economic governance in the wake of the crisis of the single currency.

Integration in small steps: The European commission and member‐state aid to industry

Member states of the European Union traditionally have used a variety of aids to industry to develop national champions, rescue major enterprises in financial trouble, and to make industry more competitive internationally. Yet making the single European market operational and sustaining cohesion across member states with different abilities to aid their industrial enterprises requires that the European Commission monitor state aid closely. Most accounts of this tension point to the weak record of the Commission in rejecting aid packages proposed by member states. This article argues that the rate of rejection of aids by the Commission is a highly misleading indicator of the Commissions influence in this policy area. In fact, the Commission has developed substantial capacities to regulate state aid relative to the constraints within which it operates.

Single market, global competition: regulating the European market in a global economy

Development of Europes single market induces a range of regulatory measures to help the market function effectively and meet policy goals. However, the European market is nested inside a global economy; some rules designed to perfect the single market may generate competitive disadvantages as producers interact outside the European market. How does the EU address this tension? Examining cases of chemicals regulation, the single market in public procurement, and regulation of end-of-life vehicles recycling, this contribution identifies three mechanisms: regulatory accommodation; compliance deficits; and international uploading of EU regulation. The first involves revisions of proposed regulation following objections from organized business interests; the second entails temporary European Commission toleration of non-compliance; and the third consists of efforts to establish global regulation coinciding with single market rules. The distribution of these mechanisms varies across sectors and over time, but reconciliation measures are politically essential to the continued construction of the single market in a global economy.

Europe and the German Model: Growing Tension or Symbiosis?

Recent conflicts between the Commission of the European Communities and the German government suggest a growing tension between structures of the German political economy and the agenda of economic liberalisation fostered by European integration. Will mounting conflict ultimately force Germany to choose between its commitment to the integrity of the social market economy and support for European economic integration? This article considers the cases of Germanys public sector banks and the German postal service. Both entail potential conflict between the public service functions integral to the social market economy and the competition central to Europes single market. Examination of these cases suggests that, rather than forcing change on a reluctant Germany and jeopardising the core of the social market economy (SME), enforcement of European competition policy from Brussels has taken place in fundamental symbiosis with the SME. Nonetheless, tensions between federal government and Länder indicate that a positive-sum relationship between Europes single market and Germanys social market economy may be constrained by German federalism.

Germany's quest for a New EU industrial policy: Why it is failing

German Chancellor Schroeder has expressed publicly the desire for a fundamental revision of European Union industrial policy to conform more closely with the changing needs of the German political economy. What is the nature of this challenge? To what extent has the German government been able to alter EU industrial policy? And to the extent it has not been able to do so, why not, given the scope of Germanys power in Europe? Using the process of Economic and Monetary Union (EMU) as a paradigm for assessing German power in Europe, I argue that the German quest to remake EU industrial policy is likely to fail for three reasons: (1) emulation: Germany has not been a model for EU industrial policy; (2) timing and sequencing: EU industrial policy became institutionally embedded from the late 1980s to the early 1990s, when the influence of the German industrial model was waning; and (3) path dependence: for nearly two decades, the overriding goal of the European integration project has been to advance the single market. As this has taken place, policies toward industry have been constructed on the premise of ‘competitiveness through competition’, a notion at odds with the prevailing German conception of an industrial policy that differentiates between sectors according to conditions in global markets.

Democratic legitimacy in the European Union: Fulfilling the institutional logic

The European Unions delicate institutional balance between intergovern‐mentalism and supranationalism has been the source of both the EUs successes and its problems. This balance is under scrutin...

Democratic Deficit or Deficit of Democracy?: European Integration and Privileged Institutional Position in Domestic Politics

Theorists who have considered the impact of globalization on democracy argue that deepening interdependence of states exacerbates existing problems of large-scale democracy.1 Problems of inadequate state policy capacities, unequal information across groups and between citizens, accountability of policy-makers, popular inclusion and limited control over the agenda are amplified by transnationalization of political institutions. The loss of control over the political agenda by the national demos is particularly marked in systems of transnational federalism.2 This explains the widespread concern with the democratic deficit of the European Union.