The State of European Integration

THE STATE OF EUROPEAN INTEGRATION To my faithful students at Virginia Tech as a small indication of my deepest apprec...

Author: Yannis A. Stivachtis | Yannis A. Stivachtis

61 downloads 2389 Views 2MB Size Report

This content was uploaded by our users and we assume good faith they have the permission to share this book. If you own the copyright to this book and it is wrongfully on our website, we offer a simple DMCA procedure to remove your content from our site. Start by pressing the button below!
Report copyright / DMCA form

DOWNLOAD PDF

THE STATE OF EUROPEAN INTEGRATION

To my faithful students at Virginia Tech as a small indication of my deepest appreciation for whatever they have done for me. There are no words to express the gratitude I will always feel.

The State of European Integration

Edited by YANNIS A. STIVACHTIS Virginia Polytechnic Institute and State University, USA

Published in collaboration with the Athens Institute for Education & Research – ATINER

© Yannis A. Stivachtis 2007 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise without the prior permission of the publisher. Yannis A. Stivachtis has asserted his moral right under the Copyright, Designs and Patents Act, 1988, to be identified as the editor of this work. Published by Ashgate Publishing Limited Gower House Croft Road Aldershot Hampshire GU11 3HR England

Ashgate Publishing Company Suite 420 101 Cherry Street Burlington, VT 05401-4405 USA

Ashgate website: http://www.ashgate.com British Library Cataloguing in Publication Data The state of European integration 1. European Union 2. National security – European Union countries 3. Democracy – European Union countries 4. European Union countries – Economic integration 5. European Union countries – Foreign relations 7. European Union countries – Politics and government I . Stivachtis, Yannis A., 1965– 337.1'42 Library of Congress Cataloging-in-Publication Data The state of European integration / edited by Yannis A. Stivachtis. p. cm. Includes index. ISBN 978-0-7546-7223-4 1. European Union. 2. European Union countries--Economic integration. I. Stivachtis, Yannis A., 1965JN30.S7225 2007 341.242’2--dc22 2007023739 ISBN: 978 0 7546 7223 4

Printed and bound in Great Britain by TJ International Ltd, Padstow, Cornwall.

Contents List of Contributors Acknowledgments Introduction: The State of European Integration

ix xi xiii

PART I: THE EUROPEAN UNION AS AN INTERNATIONAL ACTOR

1

2

3

The European Union and 2nd Pillar Integration: The Common Foreign and Security Policy Meltem Müftüler-Baç

3

The European Security and Defence Policy: Capabilities and Institutions Gülnur Aybet

19

The EU as an International Actor: ‘Civilian’, ‘Normative’ or ‘Military’ Power? Yannis A. Stivachtis

41

4

Presidency as Leadership? Assessing the EU Presidency through the 2005 UK EU Presidency 59 Richard G. Whitman and Gareth Thomas

5

European Union International Strategy Against Proliferation Threats Milagros Álvarez-Verdugo

75

PART II: ENLARGEMENT

6

A Union of Disenchantment: The New Politics of post-Enlargement Europe Christopher J. Bickerton

89

vi


7

Turkey’s Accession to the European Union: Dilemmas, Opportunities, and Constraints Joseph S. Joseph

111

Judicialization: The Key to European Unification and EU Expansion Charles Anthony Smith

127

8

PART III: SOCIALIZATION, DEMOCRACY AND LEGITIMACY

9

10

11

12

Democratizing and Socializing Candidate States: The Case of the EU Conditionality Brandon Kliewer & Yannis A. Stivachtis

143

Political Representation in the Central and Eastern European Democracies James E. Lennertz

161

Democratization and the Diffusion of Human Rights Norms in Central and Eastern Europe: The Case of Domestic Violence Policies Katalin Fábián

177

Modelling Democratic Transition in Southern and Central Europe: Did East Germany Experience ‘Transición’ or ‘Ruptura’? 197 Gareth Dale

PART IV: CONVERGENCE AND COHESION

13

Public Support for the EU and the Regional Level Effect Elna Roig Madorran

223

14

Regional Development in the European Union: Implications for Austria’s Viticulture 243 Nathalie Homlong and Elisabeth Springler

15

Towards a Post-Communist Welfare State? Juraj Draxler

261

Contents

vii

PART V: ECONOMIC AND MONETARY ISSUES

16

17

18

Index

The Future of EMU: Towards the Disruption of the European Integration Process? Leila Simona Talani

279

The Race to the Bottom: Tax Reform and Economic Development in the European Union Akis Kalaitzidis

307

Common Misconceptions of Germany and the EMU Heather Baca-Greif, Poul Thøis Madsen and Esben Tranholm Nielsen

321

341

This page intentionally left blank

List of Contributors Milagros Alvarez-Verdugo is Assistant Professor of International Law and EU Law at the University of Barcelona. Gülnur Aybet is Lecturer in International Relations at the University of Kent at Canterbury. Heather Baca-Greif is Associate Research Fellow at the Centre for European Policy Studies (CEPS), Brussels. Christipher Bickerton is Research Fellow at St Johns College, University of Oxford. Gareth Dale is Senior Lecturer in Politics and International Relations at Brunel University. Juraj Draxler is Research Fellow at the Centre for European Policy Studies (CEPS), Brussels. Katalin Fabian is Assistant Professor of Government and Law at Lafayette College, Pennsylvania. Nathalie Homlong is Associate Professor of Economic Geography at the University College Volda, Norway. Joseph Joseph is Associate Professor of International Relations and European Affairs at the University of Cyprus and holder of the Jean Monnet Chair in European Foreign and Security Policy. Akis Kalaitzidis is Assistant Professor of Political Science at the University of Central Missouri (UCM). Brandon Kliewer is graduate student at the Department of Political Science, Virginia Polytechnic Institute & State University. James E. Lennertz is Professor of Political Science, Department of Government and Law, Lafayette College, USA.

x


Elna Roig Madorran is Visiting Fellow at the European Union Institute in Florence. Poul Thøis Madsen is Associate Professor and Director of Studies, Department of International Affairs, Aalborg University. Meltem Müftüler-Baç is Professor of International Relations at Sabanci University (Turkey) and Jean Monnet Professor ad personam. Charles Anthony Smith is Assistant Professor of political Science at the University of California-Irvine. Elisabeth Springler is Assistant Professor at the Vienna University of Economics and Business Administration. Yannis A. Stivachtis is Director of the International Studies Program at Virginia Polytechnic Institute & State University and Head of the Politics and International Affairs Research Unit of the Athens Institute for Education and Research (ATINER). Leila Simona Talani is Lecturer in European Politics and Director of Graduate Studies at the Department of European Studies, University of Bath. She is also Research Fellow at the European Institute of the London School of Economics. Gareth Thomas is Researcher on Europe at the Chatham House (former Royal Institute for International Affairs). Esben Tranholm Nielsen is Research Assistant at Aalborg University, Denmark. Richard Whitman is Professor of Politics at the University of Bath. Formerly he served as Senior Fellow for the European Research Program at Chatham House (formerly known as the Royal Institute of International Affairs).

Acknowledgments This volume is based on a research project undertaken by the Athens Institute for Education and Research (ATINER). The initial drafts of the papers included in this volume were presented at the 3rd and 4th ATINER International Conferences on Politics and International Affairs. As with every book, this one, too, could not have been written without the help and assistance of many people. First of all, I would like to thank Dr. Grigoris Papanikos, Director of ATINER, for his invaluable support throughout the research and publication process. I would like to express my deep appreciation to the volume contributors for managing to submit their chapters on time despite their significant time constraints. Without their dedication this book could have never been written. Many thanks go to the anonymous volume reviewers for their constructive criticism, comments and suggestions. I am greatly indebted to Amanda L. Davis for her invaluable assistance in the preparation of this volume. I would also like to thank Amanda as well as Anisa Ali, Aileen Boniface, and An Phong Le for their excellent editorial and formatting work. The completion of this volume could not have been easy without their assistance and support. My special thanks go to Professor Ilja Luciak, Head of the Political Science Department of Virginia Tech, for his continuous support and encouragement. Last but not least, I would like to thank everyone at Ashgate Publishing Limited involved in this project. I will begin with Kirstin Howgate, whose in-depth market knowledge and suggestions have been a blessing for this volume. A special thank you goes to Donna Hamer and Carolyn Court for taking care of the legal aspects of the publication. But the manuscript could not have reached the reviewers and their comments could not have reached the book editor without the essential assistance of Margaret Younger. Blacksburg, Virginia Yannis A. Stivachtis


Introduction

The State of European Integration Yannis A. Stivachtis

The purpose of this volume is to provide an overall assessment of the state of European integration. Because the number of fields where European integration operates is so vast, the problem that any volume of this kind faces is on what areas and issues it should focus. The choice of areas and issues to be included in this volume was the response to two questions. First, from the various debates that have taken placewhich areas and issues of European integration appear to be more significant? And second, are these areas and issues also covered or adequately analysed by similar volumes? As a result, the current volume discusses issues related to the EU’s international role (Part I); the recent and future enlargement of the EU (Part II); the process of socialization and democratization of the new Member States as well as the question of legitimacy in the EU (Part III); the degree of convergence and cohesion within the EU (Part IV); and finally, the monetary and financial challenges facing the EU (Part V). The European Union as an International Actor Nowhere is the increasingly important role of the EU – as a single international actor – in world affairs better reflected than in the European Common Foreign and Security Policy (CFSP) and the European Security and Defence Policy (ESDP). The development of the CFSP and especially the ESDP, has invited a debate as to whether the EU should be a civilian, normative, or military power.1 These two policies – in association with the Justice and Home Affairs Policy (JHA) – are the result of the realization that in today’s world, the EU Member States cannot offer their citizens freedom, security and justice through intra-EU cooperation alone. During the past few years, the CFSP has continued its steady development and the EU gained additional status as an international political player.2 Increasingly, international crises around the world reveal the EU’s added value. Sometimes the EU acts independently, sometimes as a participant in a UN-led process and sometimes in close cooperation with other international partners, like NATO or the African Union. The range of instruments at the EU’s disposal continues to increase in size and scope. The use of these instruments is guided in part by the ambitious objectives set out in 1 Yannis Stivachtis discusses the debate about the nature of the European power in Chapter 3. 2 Meltem Muftuler-Bac examines the current state of the CFSP in Chapter 1.

xiv


the ‘European Security Strategy’ adopted in late 2003. The EU strategy to deal with the proliferation of weapons of mass destruction (WMD) is a case in point.3 Specifically, the EU has a broad range of instruments at its disposal besides the CFSP to deal with crises, including the ESDP as well as trade and development cooperation. With its strong civilian component, the ESDP is well suited to combined civil-military operations. By employing these instruments in a coherent, integrated manner, EU action becomes stronger. In addition, a case should be made for a better coordination and cooperation between the Council, the Commission and the Member States. With a view to the new Financial Perspective, in 2006 the full complement of EU foreign policy instruments was streamlined and reduced to a limited and comprehensible number of instruments, in areas like pre-accession, neighbourhood policy, development, stability and human rights. In the process, special attention was paid to the connection between the pillars, particularly between the CFSP and the stability instrument. EU strategies, like the ‘Africa Strategy’ of December 2005 and the ‘Energy Strategy’ called for by the European Council of March 2006, will henceforth be cross-pillar in structure. Coherence between EU instruments is also essential to articulating an effective migration policy. The coherence with external JHA policy needs to be enhanced in the future. The CFSP is also an increasingly important instrument for meeting EU Member States’ foreign policy goals. At the same time, EU Member States need to ensure that the conclusions of the European Council of June 2006 are translated into concrete measures. As to budgetary matters, over the past few years the relatively modest CFSP budget has proved to be inadequate to fund the growing number of operations. Member States are increasingly being asked for voluntary contributions. The available resources for 2006 were increased to over €100 million under the British Presidency (over €60 million for 2005). During the Austrian Presidency an agreement was reached with the European Parliament under which the CFSP budget will be gradually raised to €406 million by 2013. The new Financial Perspective for 2007-2013 provide for a total of €1740 million for CFSP activities. Nevertheless, the total amount of funds available for the CFSP is relatively small. This may prevent the EU from pursuing a coherent and effective foreign policy. In the context of effective multilateralism, joint activities with other international organizations like the UN and NATO should display coherence to the greatest extent possible. Cooperation with the UN has recently been intensified, thanks in part to the EU’s willingness to lend temporary assistance to the UN’s mission in the Democratic Republic of Congo during elections there. Cooperation with NATO is not yet optimal as a result of the objections of a small number of Member States. The activities of the OSCE and the Council of Europe can also strengthen the CFSP. In recent years cooperation with regional organizations like the African Union has grown considerably. One of the most important areas where CFSP is expected to play a very important role in the near future is energy security. The CFSP in conjunction with the European Neighbourhood Policy, trade policy, development cooperation and environment 3 Milagros Alvarez-Verdugo analyses the EU strategy against WMD proliferation in Chapter 5.

Introduction

xv

policy can achieve better energy security for the EU. The use of the CFSP and the ESDP should result in initiatives aimed at promoting stability in important producer and transit countries. In addition, the High Representative will have to analyse the vulnerability of transport routes and energy infrastructure, and start to develop policy on that basis in consultation with third countries and NATO. In the past several years, the European Security and Defence Policy (ESDP) has entered its operational phase.4 Over the course of a short period, the EU’s ambitions with respect to security and defence have been translated into a considerable number of ESDP operations: at present- ten civilian missions and two military operations. The EU’s ambitions should always be weighed against the EU’s planning and support capacity for civilian missions and the quality of the personnel that Member States can provide. The growing number of missions has placed these capacities under great strain. The EU continues to develop its capacity on the basis of civilian and military ‘Headline Goals’. The military component of these goals includes improving the expeditionary potential of European military capabilities, accelerating deployability and exploring the option of long-distance operations. The establishment of the European Defence Agency in July 2004 opened up new possibilities for coordinating national defence efforts and working with other EU Member States to find solutions for military deficiencies that have already been identified. The operational readiness of EU Battlegroups is a major milestone. Starting in 2007, the EU will be capable of carrying out two operations of battlegroup magnitude. The rapid deployment of these battlegroups will significantly bolster the ESDP as a whole. In the first half of 2007, the Netherlands, Germany and Finland are expected to provide a battlegroup and periodically contribute to EU Battlegroups. Among other EU policies, the CFSP and ESDP show clearly the important role that individual EU presidencies play in the development of those policies.5 While particular presidencies have played a leading role in shaping the substance and direction of the policies in question, others have failed, or it was not in their interests to address the need for a common European policy in the fields of foreign affairs, security and defence. The Domestic Dimension of EU Security The EU must play a larger role in the domain of security, which is inextricably linked to freedom and justice. Negotiations among Member States and public opinion polls reveal the level of anticipation with respect to a common asylum and migration policy and to a common approach to issues like terrorism and organized crime. This joint approach should also extend to external policy. In a globalizing world even the EU cannot act on its own. With this in mind, cooperation with other countries, including countries of origin, is essential.

4 Gülnur Aybet explores the development and current state of the ESDP in Chapter 2. 5 Richard Whitman and Gareth Thomas examine the role of Presidency in the EU with a special focus on the UK Presidency in Chapter 4.

xvi


Cooperation among criminal justice authorities in Member States is more intensive than ever. A great deal has already been accomplished, particularly when one considers that Justice and Home Affairs (JHA) cooperation is a new policy area involving a relatively large amount of legislation and touching on a cornerstone of national sovereignty. It was only seven years ago that the ‘Tampere Programme’ took the first serious steps towards the area of freedom, security and justice. The intervening period has been marked by developments such as the establishment of Europol and Eurojust; various decisions to regulate the mutual recognition of criminal and civil judgments; decisions regarding substantive criminal law; the introduction of minimum standards for asylum and migration policy; the establishment of a new agency to manage external borders (FRONTEX); agreements to protect passports and visas; improved information-sharing procedures (including those for police records); operational cooperation between police and prosecution services; a European Arrest Warrant; and (in the near future) a European Evidence Warrant. The ‘Hague Programme’ of December 2004 has given a major new impulse to cooperation. The implementation of the ‘Hague Programme’ has a full agenda, based on the ‘Action Plan’ approved in June 2005. The bulk of that agenda consists of efforts to strengthen police and prosecutorial cooperation in the fight against crime. The first results are already visible. Following the first comprehensive threat analysis of organized crime in the EU by Europol, the European Council of June 2006 set a number of priorities at EU level to fight criminal enterprises. With respect to asylum and migration, the Commission is expected to submit proposals to the Council and the European Parliament, mainly in the second half of the ‘Hague Programme’. At present the emphasis is on implementing and evaluating the first generation of legislative instruments and strengthening practical cooperation between operational asylum and immigration services as well as addressing issues like biometric travel documents, border control, and third-country cooperation to combat illegal immigration and manage refugee flows. For the specific purpose of combating terrorism, a comprehensive strategy, including a detailed ‘Action Plan’ and a ‘Special Action Plan on Radicalisation and Recruitment’, were agreed in December 2005. The EU has taken up the implementation of the various Action Plans with great vigour. Nevertheless, JHA cooperation is in an undeniably difficult phase at the moment. Negotiations often progress very slowly. While it was already difficult to reach a consensus with 15 Member States, the process is – not surprisingly – even more complicated with 27, especially considering the profound influence that legislative proposals can have on the Member States’ own criminal law. This is why it took much longer than anticipated to reach agreement on the ‘European Evidence Warrant’; an important new weapon in the fight against terrorism and cross-border crime that aims to facilitate evidence-gathering in other Member States. It was not until June 2006 that a political accord was reached, and this was only possible after Germany had been given a partial opt-out. The ‘Data Retention’ directive (on storing telecommunications data for investigating terrorists and other serious criminals), another major result in this area, was adopted more quickly. The fact that the directive could be adopted with qualified majority voting (and with the co-decision of the European Parliament) also accelerated the decision-making process.

Introduction

xvii

The unanimity requirement ensures that the often sweeping proposals in the area of law enforcement can be enacted only with the support of all the Member States. However, this same requirement can also cause delays in the passage of legislation and lead to legislation that is riddled with exceptions. In the past year the increasing difficulty of establishing a boundary between first and third pillar decision-making has become apparent. This can be seen, for example, in a judgment by the European Court of Justice, which ruled that in order to enforce environmental law, it must be possible to compel the Member States through a first-pillar directive to impose criminal law penalties. The Commission is adopting a pragmatic position and has thus far presented only one proposal for a directive (on protecting intellectual property rights) with criminal-justice implications. It may be argued that the European Court’s judgment on environmental offences is a mirror image of another decision in which the Court quashed the ‘Passenger Name Record’ agreement with the United States, which had been made in the first pillar. The Court ruled that transferring personal data to further the fight against terrorism is a third-pillar matter. A similar discussion on the choice between the first and third pillars arose in the Council with respect to the ‘Data Retention’ directive, with a number of member states taking the position that this issue should have been addressed in a framework decision. This matter will probably also be decided before the European Court of Justice. The implementation of EU legislation is increasingly subject to criticism. Framework decisions must be transposed into national legislation, but their implementation not infrequently leaves scope for different interpretations. This can be seen in the various ways that the member states chose to implement sections of the ‘European Arrest Warrant’, for example, time limits or grounds for refusal. In practice the ‘European Arrest Warrant’ has proven to be a substantial improvement on pre-existing practice in the field of international legal assistance. The Constitutional Courts in Germany, Poland, and Cyprus have, however, declared certain sections of the implementation legislation to be unlawful. The programme is well under way, but additional efforts will be needed. Europe cannot allow itself to let JHA cooperation lag behind public expectations. In 2006, the EU examined how the ‘Hague Programme’ is progressing. The Programme stipulates that a review be conducted in the autumn of 2006, since a number of the Programme’s policy goals can only be pursued in earnest if the Constitutional Treaty enters into force. So far, it is questionable how much scope the current treaties offer for implementing the sections in question. On 28 June 2006, in preparation for assessing the status of the ‘Hague Programme’, the European Commission released a number of communications, which largely endorsed the above picture. The Commission wished to encourage debate with the Member States and the institutions on new policy initiatives deemed necessary by the Commission. The Commission has emphasized that its goal is not to set new priorities over and above those of the ‘Hague Programme’ but rather to foster a debate on the options offered by the current treaties for changing to qualified majority voting. The EU must do more with respect to asylum and migration to broaden cooperation with countries of origin and transit. Operational cooperation is also

xviii


important in the field of criminal justice, but in many cases this requires additional legislation. Cooperation quite often suffers from a lack of confidence in a partner’s approach. This also creates practical obstacles when it comes to implementation. In a Union in which cross-border crime and terrorism must be dealt with jointly, this is an undesirable situation over the long term. To achieve the desired progress in JHA cooperation, it will also be necessary to look into ways of improving the decision-making process of an EU of 27 Member States. The European Council of 15 and 16 June 2006 instructed the Finnish Presidency to examine the options for improving the way decisions are made and action taken in the area of freedom, security and justice on the basis of the existing treaties. One option under consideration was to replace the unanimity requirement with majority decision-making. The Commission discussed this point in its Communication of 10 May 2006 on the period of reflection (‘A Citizens’ Agenda: Delivering Results for Europe’) and its communications of 28 June 2006. However, no action has been taken to this direction, so far. The external and internal dimensions of EU security are inextricably linked. That means that the CFSP and JHA policy must cohere, both as regards to the use of foreign policy to ensure internal security, and the use of JHA cooperation in relations between the EU and third states. The design of the EU’s joint counterterrorism policy is an example of the progress that can be made in this area. The formation of this policy has been accelerated in the past few years, largely due to the bombings in Madrid and London. Important principles informing counterterrorism policy include complete respect for human rights and the balance between preventive and repressive measures. Cooperation embraces a wide range of issues: bringing together police, prosecutors and intelligence and security services; combating radicalization and recruitment; developing more secure documents and improving informationsharing, with respect to, for example, the international movements of persons. An important element of all this is cooperation with third countries. The EU works with a list of priority countries, to which the EU offers additional technical assistance. The ‘Counterterrorism Strategy Agreement’ reached in December 2005 and the associated Action Plans, including the ‘Action Plan on Radicalisation and Recruitment’, have helped bring issues that had previously been taboo into the agenda of talks with third countries. In working with third countries, it is essential to combat radicalization and recruitment jointly with countries of origin. The EU and its Member States have to assist third countries in enacting preventive measures. Tackling radicalism also implies a broad-based dialogue with the Islamic world. Intensive cooperation in the fight against international terrorism inside and outside the EU borders is essential if the Member States are to remain capable of offering their people the security and freedom they expect.

Introduction

xix

EU Enlargement After years of negotiations, ten states from Central and Southern Europe joined the EU in 2004 and Romania and Bulgaria followed on January 1st, 2007. This was the culmination of a sweeping process of political, economic and social reforms in these countries, a major step in the process of European integration under the flag of the EU.6 Their accession means that not only the current residents of the European Union will be able to live in a stable environment marked by peace, freedom, security and prosperity, but also the generations that follow. In the year following the French and Dutch referenda more attention was devoted to the pace and quality of the enlargement process.7 The accession of countries from Central, Eastern and Southern Europe has made a significant contribution to peace, stability, democracy and prosperity throughout the continent, a process without precedent in European history. But at the same time there is a growing realization that the EU’s capacity to expand is not unlimited and that more attention should be paid to the quality of the enlargement and the full and rigorous application of the accession criteria. This is also necessary for maintaining sufficient popular support for enlargement. As a result, the Finnish Presidency took the initiative to give the debate on the quality of enlargement a prominent place on the agenda. Since October 2005, accession negotiations have been in progress with Turkey8 and Croatia. In December 2005, the Republic of Macedonia or FYROM was granted candidate country status, and once that country fully meets the conditions relating to democracy and the rule of law (the Copenhagen political criteria), it will be able to enter into accession negotiations. This is a deviation from the earlier practice of setting a date for the start of negotiations the moment a country was granted candidate status. The relationship of the remaining countries of the Western Balkans with the EU is defined by the ‘Stability and Association Process’, which seeks to prepare these countries for future accession negotiations. These countries will have to meet the relevant conditions in every respect. From the perspective of promoting peace, freedom, security and prosperity, one could safely argue that the EU enlargement has been a great success. However, the EU has now reached a point where it should question whether it is worth and reasonable to proceed further. Therefore, it has been argued that for the time being, the EU should avoid making any new agreements on future EU membership with neighbouring countries which, under the EU Treaty, might be entitled to claim candidate status sometime in the future. Coping with the accession of the new Member States in 2004 and 2007 consumed considerable energy, while bringing the enlargement process to a conclusion with the countries of the Western Balkans which will demand considerable attention over the next several years. Strict enforcement of 6 In Chapter 12, Gareth Dale compares the democratization process in Central and Southern Europe with the much earlier democratization process in Spain. Brandon Kliewer and Yannis Stivachtis discuss the socialization and democratization effects of EU conditionality on the Central and Eastern European countries in Chapter 9. 7 Christopher Bickerton explores the implications of and lessons learned from the enlargement process in Chapter 6. 8 Joseph Joseph discusses Turkey’s accession to the EU in Chapter 7.

xx


these criteria is considered to be not only in the interest of current and future Member States but also crucial for retaining public support for the enlargement process. The top priority is the quality of the enlargement process, not timelines or dates. This will ensure that candidate countries are well prepared for EU membership. But it is not only the new Member States that must be ready for the EU; the EU, for its part, must also be ready, financially and administratively, to absorb the new Member States.9 On the other hand, such an approach may disappoint potential and actual candidate states and even contribute to the infringement of the relations between the two parties. The European Council of June 2006 asked the Commission to prepare a special report on all relevant aspects of the EU’s absorption capacity, while some Member States have pressed for a substantive discussion of further enlargement involving all the Member States. The purpose of this discussion is to establish clear rules for completing the current processes and to determine how to ensure strict compliance with these rules. Suggestions have been made intended to improve the quality of the enlargement process by preventing countries from submitting their membership application prematurely. Some Member States feel that there should be an explicit procedure for holding candidate countries to account for inadequate compliance with the political criteria, at any point in the accession negotiations. Finally, Member States like to see the Commission open difficult chapters, like those relating to Justice and Home Affairs, early on in the negotiation process, to prevent important issues from being given short shrift due to time constraints. Another lesson learned from earlier negotiations is that it is inadvisable to set a date for accession before a country has met the necessary criteria. Different countries will require different approaches. However, it needs to be ensured that decisions on enlargement should be clearly identified and conveyed to EU citizens, so they are kept abreast of new developments. Public support is key to the process. Socialization, Democratization and Legitimacy Two years after the French and Dutch referenda, Europe is still in a state of flux. The leap forward that the framers of the EU Constitutional Treaty had envisioned was stymied when the document was rejected by voters in France and the Netherlands. In response, the European Commission and the individual Member States are now working hard to modify the European integration process so that it better meets the needs and expectations of the people of Europe. Although the majority of French and Dutch people may be convinced that the EU is important to the future of the countries concerned, the outcome of the two referenda made clear that support for the European project should not be taken for granted. Many people feel cut off from the workings of the EU and worry about the direction in which the EU is moving. The arguments in support of the legitimacy of European integration are not as persuasive as they once were. The EU must win

9 Charles Anthony Smith investigates the process of ‘judialization’ in Chapter 8 and considers it as the key to European unification and EU expansion.

Introduction

xxi

over its citizens by offering solutions to the major issues of the present day and of the future. The EU must be visibly active in areas which matter to the public and the business community. Moreover, of particular importance remains the continuation of the socialization and democratization of the new Central, Eastern and Southeastern European Member States through norm diffusion and the quality of political representation in these countries.10 The question remains however, what areas should the EU be involved in, and what should be the extent of European cooperation and integration? The European Parliament, the Council and the Commission are now devoting more attention than ever before to the sensible application of the principles of ‘subsidiarity’ (when should an issue be dealt with at European level, and when at national level?) and ‘proportionality’ (to what extent should the EU concern itself with a particular policy area?), while greater involvement by national parliaments is sought. The decisionmaking process is now more transparent since a significant number of legislative meetings of the European Council are held in public. There is also a greater focus on improving the quality of legislation and limiting administrative costs. Specifically, over the past two years, a number of productive measures relating to EU decision-making were taken under existing treaties. As the first European Conference on ‘Subsidiarity’ that took place in The Hague in November 2005 indicated, the EU Member States have now realized that it is essential that the EU’s decisions are understood and supported by the people of Europe. Making this possible depends, to a large extent, on ‘subsidiarity’ and ‘proportionality’. Regularly assessing how well draft decisions and EU legislation conform to these principles in consultation with national parliaments can help improve the public’s understanding of the European decision-making process. If a proposed European decision meets the conditions for ‘subsidiarity’ and ‘proportionality’, EU legislation achieves more than would comparable legislation at national level. If it does not, the matter is better left to the Member States. The renewed and constructively critical interest in the application of ‘subsidiarity’ and ‘proportionality’ will also imply closer attention to the arguments advanced by the Commission on these principles. The Commission itself has also recognized the need to apply these principles more rigorously. In its Communication of 10 May 2006 on the ‘European citizens’ agenda’, the Commission endorsed the importance of respecting the principle of ‘subsidiarity’ and in its impact assessments of new proposals it is already devoting more attention to the application of both principles. In September 2005, as part of the better legislation initiative, the Commission decided to scrap 68 draft decisions, including legislation regulating the packaging of coffee and the way retail shops conduct sales. National parliaments should also have an important role to play in assessing the ‘subsidiarity’ and ‘proportionality’ of European proposals. At the suggestion of the Netherlands, the European Council of June 2006 decided to support the national parliaments more actively in evaluating these principles. The Commission 10 James E. Lennertz examines the issue of political representation in Central and Eastern Europe in Chapter 10. Katalin Fabian discusses norm diffusion in Central and Eastern Europe in Chapter 11.

xxii


promised to make all proposals and consultation papers directly available to the national parliaments and to carefully consider any comments on ‘subsidiarity’ and ‘proportionality’ made by these assemblies. In order to increase popular support for the EU, national governments are now working to attain the greatest possible degree of transparency for the EU’s institutions and decision-making processes and to make official documents more accessible. On this matter, the European Council of June 2006 took another step forward by making all its meetings on co-decision legislation public as of July 1st, 2006. Finally, the so-called ‘commitology’ decision has been amended, in keeping with the European Parliament’s desire for more power to craft European implementing measures in certain cases. Translating policy priorities into concrete EU policy also helps cultivate public confidence in the EU. The latter must set better priorities for the implementation of its Community reform agenda and concentrate on those areas where it brings added value, like reinforcing the internal market, the Seventh Research Framework Programme, better legislation and trade policy. At the same time, Member States must play their own role by implementing national reform plans that are based on the ‘Lisbon Strategy’. In this way, they could contribute to healthier economic growth and rising employment levels in the EU. At the urging of a number of Member States, the European Council of June 2006 devoted a substantial amount of attention to the content of actual European policy while refraining from making any pronouncements on the content of the Constitutional Treaty or the institutional changes for which it provided. The Commission also supported this approach, as can be seen from its communication of 10 May 2005 on the ‘European agenda for the future’ (‘A Citizens’ Agenda: Delivering Results for Europe’). The European Council of June 2006 decided that a ‘Report on the Status of the Constitutional Treaty’ (plus any relevant developments that might occur in the interim) should be presented no later than June 2007, by the German Presidency. The intervening period was regarded to be an opportunity to give serious consideration to the question of what path the EU should take in the future. With respect to the need for further reform, it appears that the time is not yet ripe for substantive conclusions on what, if any, amendments should be made to the EU Treaty. At the European Council of June 2006, most Member States felt it was still too early to resume this discussion. The Member States that ratified the Constitutional Treaty are content with the document as it is. Other Member States take the position that they are unable (or unwilling) to ratify the treaty until the Netherlands and France do so. In short, it is a situation for which the EU has no ready-made solution, a situation requiring further reflection. For these reasons the European Council of June 2006 took a procedural decision on the reform process. Germany was asked by the Council to report on the status of treaty discussions at the conclusion of its Presidency, following extensive consultation with the other Member States. As far as the areas of where particular attention should be given, the informal meeting of Heads of Government at Hampton Court in October 2005 gave a fresh impulse to the additional cooperation necessary to boost Europe’s competitiveness, especially in fields like innovation, research, education and strengthening small and

Introduction

xxiii

medium-size businesses. Agreements were also made to pursue a more effective foreign policy for the EU, safeguard European energy supply, solve transnational environmental problems and tackle challenges connected to migration, internal security and counterterrorism. To a large extent this position rests on the idea that the EU must better uphold and defend its responsibilities and interests in a globalising world populated by many new and diverse players. As a follow-up to the Hampton Court session, Heads of State closely examined the themes of innovation and energy in October 2006. Convergence and Cohesion The measures proposed by some Member States to boost confidence in the EU, and the emphasis on tangible European policy instead of an agenda dominated by the future of the Constitutional Treaty, have been well received by the European Parliament and the European Commission. Many Member States have realized that the gap between Europe and its citizens is not a new phenomenon, nor one confined to France and the Netherlands. It is now widely acknowledged that this gap must be bridged. Increasing the EU’s democratic legitimacy will take hard work. Without exaggerating, it is fair to say that attitudes are beginning to change, even in countries that were in favour of ratifying the Constitutional Treaty and within the European Commission. The latter has demonstrated its new orientation by regularly examining whether certain proposals are consonant with its own mandate or whether the issues in question could be more effectively addressed at national level. Further reinforcing political and societal backing for the EU is of paramount importance before any more steps are taken. Although the period of reflection called for by the European Council of June 2005 was well spent, it is obvious that more time would be necessary. The European Council of June 2006 therefore decided that the time was not yet ripe to issue any final conclusions about the Constitutional Treaty and that further progress would have to be made on concrete European issues. At the same time, the European Council asked Germany to prepare a report by June 2007 during its Presidency on the status of the Constitutional Treaty, as well as any relevant developments that might occur in the interim. It has been argued, that the further deepening and continuation of the concrete European agenda can be achieved, for the time being, by using the current Treaty of Nice to its fullest extent. For the longer term, however, the Treaty of Nice will inevitably have to be amended to keep the enlarged EU effective; to render it more democratic and transparent; to enable it to take on future policy challenges and achieve a better division of competences between the EU and its Member States. Moreover, the Dutch Government took the view that there is no sense in resubmitting the Constitutional Treaty to parliament, in the absence of sufficient political and popular support for the document. At the same time it is clear that the Member States that have ratified the treaty would like to retain it. Other Member States have indicated their intention to refrain from ratification for the time being, in some cases electing to postpone submitting the treaty to their parliaments until it has been ratified by the

xxiv


Netherlands and France. In the process of institutional reform, which is expected to be completed in the second half of 2008, Member States will mainly concentrate on treaty amendments that are directly concerned with the European policy agenda and on activities that will strengthen the EU’s democratic legitimacy. The main objective for 2007-2008 will be implementing specific European policy agreements, some of which are the fruit of the informal Hampton Court meeting, and building greater support for the EU. The main priority now is to better adapt the European integration process to the wishes and expectations of the people of Europe. The agenda of the Finnish Presidency of the second half of 2006 was a good reflection of this well-defined and realistic approach. Achieving further Convergence and Cohesion through Specific Policies Over the past two years, the EU has emphasized the importance of hard results. Consequently, any positive effects stemming from the implementation of the EU’s regional development policies are expected not only to further the coherence and convergence among the various EU Member States and regions but, most important, increase public support for the EU.11 Moreover, national and EU policies aiming at providing a better standard of living and security for the EU citizens would also contribute enormously to the legitimization of the EU.12 The outcome of the informal meeting of heads of state and government at Hampton Court in October 2005 clearly pointed in that direction. That meeting identified six priority areas: research and development, universities, demographic challenges, energy policy, migration and security. The Heads of Government agreed to prepare detailed positions on these themes in aid of future discussions at subsequent European Councils. It may be argued that the Hampton Court meeting generated momentum for the development of the midterm review of the ‘Lisbon Strategy’. This Review formed the centrepiece of the European Council of March 2005, when a decision was reached to stress growth and employment and to draft ‘National Reform Programmes’ based on established, integrated guidelines. The implementation of these ‘National Reform Programmes’ by the Member States is unmistakably contributing to the current economic growth and the rising employment rates in Europe. It has been suggested that the Commission should use country-specific recommendations to compel the Member States to make the necessary changes. The European Council of March 2006 was a useful follow-up to the Hampton Court meeting, stressing the implementation of the national reform programmes mandated by the ‘Lisbon Agenda’ as essential to increasing the dynamism and growth potential of the European economy. The Commission’s Communication of 10 May 2006 on the European agenda for the future (‘A Citizens’ Agenda: Delivering 11 Elna Roig seeks to identify and explain the factors that contribute to public support for the EU in Chapter 13. Nathalie Homlong and Elisabeth Springler provide an assessment of the EU’s regional development policies in Chapter 14. 12 Juraj Draxler examines the EU’s response to the demands for better living standards and citizen security in Chapter 15.

Introduction

xxv

Results for Europe’) also highlights the need to achieve concrete results that meet the public’s expectations. The Finnish Presidency explicitly opted for an agenda that mandates practical steps in areas like innovation and energy. To face the external challenges of globalization, as well as internal challenges like demographic ageing, the EU is obliged to strengthen its economic position. Enhancing the dynamism and growth potential of the European economy is essential. EU must continue to adhere to the ‘Lisbon Agenda’ and the stronger internal market and long-term economic reforms it envisions. This will require an ambitious position on sustainability, which is set out in the updated ‘European Strategy for Sustainable Development’, which was adopted by the European Council of 15-16 June 2006. Enshrined in the EC Treaty, sustainable development is an overarching goal of the EU. Specifically, the renewed strategy couples an ambitious vision of sustainable development with a large number of measures in areas which continue to be dogged by non-sustainable tendencies: climate change, energy consumption, public health, poverty and transport. The added value of the strategy lies in the way it makes a link between policy measures in one area and the implications of those measures for sustainability in other areas. In this way the strategy builds on the actions undertaken by the member states in their national sustainability strategies. One improvement over the original strategy is that the EU’s external action is now integrated into sustainable development policy. An important notion in the strategy is that objectives should be feasible and – wherever applicable – supported by European instruments that make it possible to achieve these objectives. Currently, the main concern with the renewed strategy is its implementation, at both European and Member State level. The strategy is now more action-oriented, complete with specific objectives, timetables and indicators. An implementation and oversight mechanism has been established to ensure that all goes according to plan. The European Council will discuss the strategy’s progress every two years and offer renewed guidance, on the basis of a set of indicators. The Community-based dimension of the ‘Lisbon strategy’ can be observed in the internal market. In the European Council of March 2007, the Commission presented a thorough evaluation of the internal market. As a result, certain questions were raised. For example, how can the EU follow up on the results achieved on the market for goods and services? What new policy should be developed to strengthen the internal market for energy, financial services and workers? To what extent can the internal market lead to social problems? How can the EU employ an integrated internal market to meet the challenges of globalization? These questions do not bare easy answers and they are expected to dominate talks among the Member States for the months and, possibly, years to come. Moreover, Member States will most certainly argue for important priorities like enacting better legislation, removing the remaining obstacles preventing businesses from marketing their goods and services in other countries and strengthening the position of consumers on the internal market. Economic development marked by a healthy labour market and declining unemployment confirms the importance of opening the borders to workers. The free movement of workers stimulates a more dynamic labour market, which is expected

xxvi


to contribute to increased economic growth. Some national governments are making every effort to lift the remaining obstacles as soon as possible. This implies first, the introduction of additional policy to enforce terms and conditions of employment; and second, the employment of the experience gained in sectors where the requirements for recruiting workers from the Central and Eastern European member states have already been relaxed. Much remains to be done to fully realize the internal market for services. The services sector accounts for a significant percentage of Member States’ national economies and total employment. Legislation in states like Germany and France include many hindrances. If these are lifted, service providers in other countries can operate more easily on the other side of the border. The political agreement on a directive for an internal market for services, which the Competitiveness Council of 29 May 2006 reached after protracted negotiations, is seen as a step in the right direction. The accord is largely based on the outcome of the plenary European Parliament vote in February 2006 and the modified Commission proposal of 4 April 2006. The main modification is the addition of a screening and notification procedure for national requirements governing the cross-border movement of services. This has been considered a major gain. A well-functioning internal market requires a good business climate, which in turn requires good legislation. The rules must be applied and enforced in a uniform manner throughout the EU. At the same time the legislation should not be too detailed. The Commission has formulated specific plans to cut back on the amount of existing EU legislation. A new method has been developed to measure the administrative burden on businesses. Along with that, impact assessments for new legislation have been strengthened. These measures are designed to keep the Commission, Council and Parliament in full alert when it comes to overseeing the quality and the necessity of EU legislation and regulations. These efforts are meant to strengthen the competitiveness of European companies, especially small and medium-size firms, which have trouble keeping up with all the new rules. For this reason future holders of the Presidency will also have to devote considerable attention to this issue. An uninterrupted supply of reasonably priced energy is a basic need for consumers and businesses alike. Europe is increasingly dependent on imported energy. Owing to this fact, geopolitical trends pose a greater risk to the European energy supply. Climate change wrought by the non-sustainable use of energy is also a cause of great concern. An effective European energy policy is essential. Energy is a transnational issue and the EU will be stronger if it could speak with one voice in negotiations with major energy producer and consumer countries. Energy is high on the European political agenda. At the informal summit at Hampton Court, the British Presidency designated energy as a priority theme. The Spring Council of March 2006, during the Austrian Presidency, agreed that Europe is in need of a new energy policy. This policy should be driven by three primary objectives: increasing the security of energy supply, ensuring the competitiveness of European companies and promoting sustainability. An integrated energy policy is necessary. This means enacting measures that will support all three main objectives. Measures promoting energy efficiency, encouraging new energy technologies and

Introduction

xxvii

strengthening and deepening the internal market can thus contribute to the security of energy supply within the EU. At the initiative of the Netherlands, the Spring Council concluded that the EU would be well served by an external relations strategy that incorporated energy. On the basis of a joint proposal by the Commission and the High Representative for the CFSP, the European Council of June 2006 discussed the EU’s external energy relations, urging that all available instruments be employed to promote energy supply security. As a result, energy has been linked to the CFSP and ESDP. One of the major issues to be addressed by the European Council is the EU’s relationship with Russia. At the end of 2006, the Commission drew up a strategic evaluation of the energy policy for the first time. On the basis of this, the Spring Council during the German Presidency will seek to adopt an action plan with priority measures to steer the EU’s long-term energy supply in the right direction. The external dimension will be an important component of this plan. As a result, energy will be given an important place in the successor to the Agreement on Partnership and Cooperation with Russia. The partnership with Russia must be based on mutual understanding, interdependence and a transparent and reliable commercial and investment climate. Support will also be given to energy infrastructure that contributes to diversification of suppliers and transport routes. Energy-related challenges require a truly integrated policy, both internally and externally. Fleshing out European energy policy over the next year demands explicit agreements on what instruments should be employed for this purpose. An integrated approach also means better coordination and cooperation between Member States and the Commission. National sovereignty over mineral resources should remain intact, and every Member State should choose its own mix of energy. Internal European energy policy needs to shift up a notch. The ‘Green Paper’ of March 2006 forms a good basis, but it must give rise to specific proposals. A balanced regime is needed for long-term contracts, one that will bolster competitiveness on the European market, offer sufficient incentives to investors and contribute to security of supply. With respect to sustainability, new and more ambitious standards for energy efficiency are needed as are long-term target figures for the proportion of sustainable energy. Some Member States also push for the development of innovative energy technologies like clean fossil fuels and ‘second-generation’ bio-fuels. Along with that investors must be given clear information on how the European emissions trading system will be continued after 2012. The Union also aims to expand the parameters of the Treaty to include the establishment of an Energy Community, which would integrate the energy markets of the Balkan countries with those of the EU, Norway and other EU neighbours. Consequently, the European Neighbourhood Policy is expected to give greater priority to energy. The EU also seeks to initiate a strategic dialogue on energy with major consumer countries like the US, China and India.

xxviii


Financial and Monetary Issues Reviewing the current state of the EU financial and monetary affairs, one ultimately focuses on three issues. First, the way in which the European Monetary Union (EMU) has developed and functions; second, the need for a tax reform and its effects on economic development; and third, and most important, the EU financial resources as well as the management, control, and administration of these sources. No debate in European integration has raised so many questions as the one concerning European monetary integration.13 Although in practice the EMU seems to work quite effectively, recently, discussion has focused on the medium- and longrun disruptive potential of EMU especially in the absence of a political union. The latter is seen central in reducing the impact of asymmetric shocks on the public opinion’s assessment of EMU. Moreover, political union – in conjunction with the adoption of a common fiscal policy – increases the benefits of a currency union. Furthermore, by increasing fiscal support to countries in a business cycle downturn, a single budgetary policy could ease the support for EMU and facilitate the legitimacy and implementation of structural reforms. It has been suggested that in the absence of political and fiscal union, the credibility of the member states commitment to EMU is reduced and chances are that the project will collapse producing a disruptive impact on the whole European integration process. One can safely point out that structural reforms have already produced a number of political struggles which have been considered as a natural consequence of the lack of legitimacy of the EMU project and have potential disruptive consequences on the desire of the Member States to keep adhering to a currency union. Many European economists identify the need for EU tax harmonization and point to the success of the flat tax in countries where it has already been implemented, as evidence of its effectiveness. However, the European Commission and several leaders of the largest EU Member States argue that the flat tax would be detrimental to EU tax strategy, as well as to the larger economic climate. Moreover, socio-political factors seem to stand firmly in the way of the flat tax’s implementation in much of Western Europe. It seems, therefore, that there is a significant gap between the purely technocratic approach of the economists, on the one hand, and the political-social approach of the Commission and the individual EU Member States, on the other. In other words, social and political factors are largely ignored by economists who support the implementation of the flat tax in what would otherwise be a worthwhile effort to reform EU tax strategy. Consequently, a central question that needs to be addressed at both the European and national levels is: what factors determine whether or not the flat tax is a viable economic strategy for future economic growth?14 What financial resources the EU will need to realize its policy priorities and achieve tangible results for its citizens? In December 2005, the European Council 13 Leila Simona Talani discusses the future of EMU in Chapter 16. Heather Baca-Greif, Poul Thois Madsen and Esben Tranholm Nielsen explore the common misconceptions about the EMU in Chapter 17. 14 Akis Kalaitzidis examines the issue of tax reform and its implications for economic development in Chapter 17.

Introduction

xxix

agreed on a new multi-year budget (new Financial Perspective), which is more modern than its predecessors and provides for a more equitable payment position for the Member States. Among other things, the Council agreed on the new ‘Own Resources’ system. During the Finnish Presidency, agreement was also reached on the amendment of the ‘Own Resources Decision’, which governs the size and composition of contributions to the EU by the Member States: the traditional ‘own resources’ (including agricultural levies and customs duties), part of the harmonized VAT base of each member state, and contributions based on the Gross National Income (GNI) of the member states. The ‘Own Resources Decision’ sets a ceiling on the amount that the EU may claim (1.24 per cent of GNI). It also provides for the United Kingdom’s budget rebate and a 75 per cent reduction in the German, Austrian, Swedish and Dutch contribution to it. In December 2005, it was agreed that these countries would also receive varying reductions in their VAT payments for the 2007-2013 period and that the Netherlands and Sweden would also receive gross reductions in their GNI contributions. After consultation with the European Parliament and the European Court of Auditors – who play an advisory role – the ratification process started. Before the new ‘Own Resources Decision’ enters into force, it requires ratification by all the national parliaments. Once ratified, the ‘Own Resources Decision’ was adapted in accordance with the new Financial Perspective. The interim evaluation of the multi-year budget is scheduled to take place in 2008-2009. This will be a good opportunity to draw renewed attention to the EU policy priorities and to argue for a new system of funding that is more fair, balanced and transparent. Although the specifics have not yet been finalized, it is still possible to outline some of the main points. The new multi-year budget includes a ‘revision clause’, which calls upon the Commission to undertake ‘a full, wide-ranging review covering all aspects of EU spending, including the CAP, and of resources, including the UK rebate, and to report in 2008/2009’. The clause leaves open the possibility that the review would affect the 2007-2013 period. In the interim period, Member States are expected to raise any questions regarding the budget revision. At the same time, they may search for political allies and in this way attempt to influence the proposals put forward by the European Commission and thus the parameters of the negotiations. During this time it will be critical to know how the Member States will interpret the budget evaluation: as a new round of negotiations on the UK rebate and the Common Agricultural Policy (CAP), or as an open and far-reaching policy evaluation covering all policy areas and budget items? Many Member States are in favour of a broad approach to the review, which should lead to a financial framework that reflects the EU’s new priorities. This means that in considering the EU’s expenditure, the review should address the full breadth of EU policy, including the effectiveness and efficiency of the Structural and Cohesion Funds, the ‘Lisbon strategy’ and the CAP. It is expected that Member States will argue that their contributions to the EU budget be fair, balanced and transparent.

xxx


The EU Budget In the Spring of 2006, the Council, the European Parliament and the European Commission reached agreement on a new ‘Interinstitutional Agreement on Budgetary Discipline and Sound Financial Management (IIA)’. This agreement formalized the Financial Perspective for the years 2007-2013. The definitive ceilings for expenditure are nearly identical to those agreed by the European Council in December 2005. The planned expenditure for the 2007-2013 period is 1.045 per cent of GNI for commitments and 1.00 per cent of GNI for payments. This is considerably less than in the original Commission proposal. However, the Financial Perspective 20072013 provides for more investment in competitiveness and security than the current spending framework. The new Financial Perspective is subdivided differently from the current one (2000-2006), in accordance with a Commission proposal intended to bring categories of expenditure more into line with the EU’s goals. Furthermore, IIA contains commitments regarding the budget procedure and the degree of flexibility in preparing and implementing the budget. On 3 May 2006, the Commission adopted the Preliminary Draft Budget for 2007. This was the first budget within the framework of the new Financial Perspective. The Commission proposed raising the commitments appropriations (funds budgeted for new expenditure) by 4.6 per cent in 2007 and the payment appropriations (funds for payments in 2007) by 3.9 per cent, relative to the 2006 budget. There was an especially large proposed rise in expenditure on cohesion policy (a 19 per cent increase in payment appropriations). The new Financial Perspective moves these funds into the growth category. This category also includes the funding for the ‘Lisbon Strategy’. The Commission expected more expenditure on the new Member States and in addition, in 2007, a high level of budget depletion for programmes for the 2000-2006 period, especially in the ‘old’ 15 Member States EU. The Commission’s own figures show a substantial gap in spending of payment appropriations relative to 2005 and the Commission’s predictions. It is important to avoid the situation that arose in the early years of the 2000-2006 period when there were large budget surpluses. No surprise, therefore, when some Member States expressed their belief that first, the Commission’s expenditure proposals to the Council and the European Parliament were somewhat high and that they should be reduced; and second, provision should be made for unforeseen developments during the budget year, in the form of sufficient margins within the sub-ceilings set in the Financial Perspective. Moreover, some Member States argued that the economic realities acknowledged at national level should also apply to the EU budget, especially in view of the budgetary situation in a number of Member States. A qualified majority of the Council supported the proposed draft budget for 2007, which was adopted on 14 July 2006 at first reading. The overall result of the compromise reached is that €125.8 billion is available in commitment appropriations for 2007 (an increase of 3.67 per cent over 2006). Payment appropriations amount to €114.6 billion in the compromise proposal. This represented an increase of 2.26 per cent over 2006, rather than the 3.9 per cent proposed by the Commission. That brought the total margins under the 2007 Financial Perspective to €2.6 billion for commitment appropriations and €9.1 billion for payment appropriations. Total

Introduction

xxxi

payment appropriations amounted to 0.98 per cent of EU GNI. The draft 2007 budget was sent to the European Parliament for its first reading. In November, the Council held its second reading, and the Council and European Parliament tried to reach general agreement on the budget. The second reading by the European Parliament took place in December. With a number of modifications, the budget was finally adopted by the European Parliament. Financial Management and Control In the EU’s management and control system, the Commission bears the ultimate responsibility for implementation of policy and appropriate use of funding. It is largely in the Member States, however, that policy is implemented. The individual Member States thus also bear a share of the responsibility. Together, the Commission and the Member States take charge of implementing the budget. Each November the European Court of Auditors reports the implementations from the previous financial year. Despite the improvements that have been initiated, the European Court of Auditors was again unable to obtain reasonable assurance that the supervisory systems and controls had been applied effectively, so as to limit the risk of the underlying transactions being irregular or illegal. As a result, it did not issue a comprehensive statement of assurance for the eleventh year running. On the basis of the European Court of Auditors’ 2004 annual report, the ECOFIN Council advised the European Parliament on 14 March 2006 to grant discharge. On 27 April 2006, the European Parliament ultimately granted discharge to the Commission for general budget implementation in 2004 and put off granting discharge for its own budget pending further research into the rental of the parliament buildings in Strasbourg. On 15 June 2005, the Commission proposed a roadmap for an internal control framework based on the 2004 European Court of Auditors’ opinion. Using this roadmap, the Commission would like to investigate – in cooperation with the Member States – whether the ‘single audit model’ could enhance the efficiency of audit efforts. The Commission’s proposals were for the most part rejected by the ECOFIN Council in November 2005. Member States had particularly strong objections to the part of the roadmap relating to national declarations. Member States retained the option of submitting declarations on their own initiative. In early 2006, the Commission published a communication converting the portions of the roadmap that had not been rejected into specified actions: the ‘Commission Action Plan towards an Integrated Internal Control Framework’. This action plan was presented in May 2006 by Commissioner Kallas at the ECOFIN Council. The Finnish presidency led the discussion of this plan, which was finally adopted by the Member States. The new ‘Interinstitutional Agreement’ between the European Council, the European Parliament and the European Commission on the Financial Perspective for 2007-2013 contains a new point on improving financial management. This point attributes an important role to simplification of legislation and assigns priority to sound financial management of EU funds under shared management (structural funds and agricultural funds). However, one should not expect that the European

xxxii


Court of Auditors will be able to issue a positive statement of assurance in the near future. Financial Regulation The current ‘Financial Regulation’, which came into force on 1 January 2003, provides that a revision is to take place after three years. The Commission presented a proposal for such a revision in 2005. The aim of this revision is to increase efficiency and transparency in the application of the rules, simplify procurement and grant procedures, and streamline and clarify the rules governing methods of management. The new rules entered into force on 1 January 2007 simultaneously with the new Financial Perspective (2007-2013). Once the ‘Financial Regulation’ entered into force, the revision of specific rules on implementation started in accordance with it. The rules needed to be simplified for them to be effective. A simplification which withers away unnecessary legislation is expected to have the desirable effect of reducing the administrative burden. Additionally, the changes proposed by the Commission can promote sound financial management, while any unintended side effects of the current ‘Financial Regulation’ should be reversed. Member States would like to see strict budgetary discipline maintained and the risk of fraud and irregularities kept to a minimum. Suggested Readings Artis, M. and F. Nixson (2002). The Economics of the European Union. Oxford: Oxford University Press. Brimmer, Esther and Stefan Frohlich (eds.) (2005). The Strategic Implications of European Union Enlargement. Washington D.C.: Center for Transatlantic Relations. Cuadrado-Roura, Juan R. and Marti Parellada (2007). Regional Convergence in the European Union. Springer. Dinan, Desmond (2005). Ever Closer Union. 3rd edition. Boulder: Lynne Rienner. Fitoussi, Jean-Paul and Jacques Le Cacheux (2007). Report on the State of the European Union. Volume 2. Basingstoke: Palgrave. Fitoussi, Jean-Paul and Fiorella Kostoris Padoa Schioppa (2005). Report on the State of the European Union. Volume 1. Basingstoke: Palgrave. Flockhart, Trine (ed.) (2005). Socializing Democratic Norms. Basingstoke: Palgrave. Grabbe, Heather (2006). The EU’s Transformative Power: Europeanization through Conditionality in Central and Eastern Europe. Basingstoke: Palgrave. Green Cowles, Maria and Michael Smith (eds.) (2000). The State of the European Union: Risks, Reform, Resistance, and Revival. Volume 5. Oxford: Oxford University Press. Haepfer, Christian W. (2002). Democracy and Enlargement in Post-Communism Europe. London: Routledge.

Introduction

xxxiii

Jabko, Nicolas and Craig Parsons (eds.) (2005). The State of the European Union: With US or Against US? European Trends in American Perspective. Volume 7. Oxford: Oxford University Press. Leonardi, Robert (2005). Cohesion Policy in the European Union. Basingstoke: Palgrave 2005. McCormick, John (2005). Understanding the European Union. 3rd edition. Basingstoke: Palgrave. Meunier, Sophie and Kathleen R. McNamara (eds.) (2007). The State of the European Union: Making History. Volume 8. Oxford: Oxford University Press. Pridham Geoffrey (2005). Designing Democracy: EU Enlargement and Regime Change in Post-Communist Europe. New York: Palgave. Sadeh, Tal (2006). Sustaining the European Monetary Union. Boulder: Lynne Rienner. Schimmelfenning, Franck, S. Engert and H. Knobel (2006). International Socialization in Europe: European Organizations, Political Conditionality and Democratic Change. Basingstoke: Palgrave. Schimmelfennig, Frank and U. Sedelmeir (2005). The Politics of European Union Enlargement: Theoretical Approaches. London: Routledge. Schimmelfennig, Frank and U. Sedelmeir (eds.) (2005). The Europeanization of Central and Eastern Europe. Ithaca: Cornell University Press. Zieloka, Jan (ed.) (2001). Democratic Consolidation in Eastern Europe. Volume 1. Oxford: Oxford University Press. Zieloka, Jan and Alex Pravda (eds.) (2001). Democratic Consolidation in Eastern Europe. Volume 2. Oxford: Oxford University Press.


PART I The European Union as an International Actor


Chapter 1

The European Union and 2nd Pillar Integration: The Common Foreign and Security Policy Meltem Müftüler-Baç

One of the most problematic areas in European integration has traditionally been in building a common foreign and security policy, an integral part of political integration. The Treaty on the European Union, the Maastricht Treaty of 1992, was a breakthrough in that aspect when the Common Foreign and Security Policy was adopted and a concrete step towards political union was taken. Two factors have been especially critical in prompting the European Union members to deepen integration in foreign policy-making: the evolution of the European integration process and the systemic changes in the international order since 1989. The most important hurdle in foreign policy cooperation is that it is traditionally seen as the main responsibility of states. Therefore, a major concern for the EU members is that deepening in these areas would have the potential to impact state competencies and sovereignty. In other words, any gain at the supranational level with respect to foreign policy making would be regarded as a loss of competency at the national level. This is partly the reason why integration in foreign policy making has been painfully slow and remained largely intergovernmental. However, the end of the Cold War provided the momentum and the stimulus to move European integration further by taking the steps towards a political union, most notably in the area of foreign and security policy making. The main obstacles to the common foreign and security policy are posed by the tensions in European integration, such as the tension between the federalists and the intergovernmentalists and from diverging state preferences over the possible role of the EU in foreign and security policies. An important question here is that the extent to which the EU members are ready and willing to transfer their competencies on foreign policy from the national level to the supranational level. The key issue, of course, is whether a collective European interest in foreign policy exists which transcends the national interests of the EU members. When the Cold War ended in 1989, the European order was reconstructed along the path of political integration and one of the main tenets of this political integration was to build a Common Foreign and Security policy. One might argue that the most important stimulus to that process came from systemic restructuring and the subsequent uncertainty. Viewed in this light, the end of the Cold War was critical because the Europeans relied on the bipolar balance of power to deal with

4


the uncertainty that stems from the anarchical nature of international politics. Its collapse meant that the Europeans would now have to find new mechanisms to deal with uncertainty. The European response was to deepen political integration and move towards an ever closer union. It is partly, for this reason, that harmonization in foreign and security policies became one of the three pillars on which the European Union was structured. The road to political integration coincided with the perception that liberal democracy has triumphed and the world has become a safer place, now that the Soviet threat was dealt with. In the post World War II period, the European Union members left foreign policy and security and defense issues to the protective umbrella of the North Atlantic Treaty Organization-NATO, established under the leadership of the USA in 1949. As a result, the EU integration process has been particularly slow in terms of 2nd pillar integration. The presence of NATO enabled them to deal with other issues, such as trade and economic integration. However, the European Union’s issues from its own troubled past and the security challenges it faces in the 21st century necessitated the adoption of new mechanisms that goes beyond the traditional protective shield of NATO-the North Atlantic Treaty Organization. The EU’s foreign policy making could be approached from two different angles, one is concerned with economic policy making and external relations with third parties on economic issues and the second is concerned with coordination of foreign policy. These have traditionally evolved differently. Economic relations with nonEU members and economic policy making had been mostly the responsibility of the European Commission which handled trade, aid and economic issues that fall under the jurisdiction of the 1st pillar since the early 1960s. On the other hand, the coordination of foreign policy at the supranational level that goes beyond economic decisions has been a much harder process of cooperation. This chapter does not dwell on the economic policy making, even though one should acknowledge that economic decisions are also related to the larger foreign policy objectives of the Union. This chapter addresses the evolution of the EU’s CFSP and analyses the obstacles in furthering the EU’s foreign and security policy and enhancing the role the EU plays in international politics. This is important because if the European states are to deal with the security risks of the 21st century and if the European Union is to proceed along the road towards quasi-statehood, then 2nd pillar integration plays a critical role in that aspect. In other words, the evolution of the CFSP and the challenges it faces will determine the road of European political integration. The Evolution of the European Union’s CFSP Cooperation in security issues and foreign policy making has always been one of the hardest areas in the European integration process due to the nature of policy making in these areas. This is a result of the perception that foreign policy making is the main responsibility of nation states and national governments. Thus, foreign policy making at the supranational level has been subject to objections and obstacles stemming from this notion of equating foreign policy decisions with national,

The European Union and 2nd Pillar Integration

5

domestic politics. According to Michael Smith, this is because of the notion that ‘foreign policy is the embodiment of national aims and interests, pursued through the mobilization and application of national resources’ (Smith 1994: 287). Following the Maastricht Treaty, the EU has taken significant steps in furthering integration in foreign and security policies, so that by the end of the 20th century, the EU has evolved to the extent to which a transfer of competencies from the national level to the supranational has become possible over the foreign policy areas as well. Consequently, the situation right now is that ‘the EU could formulate and implement foreign policy, even though foreign policy is an area traditionally considered to be at “the heart” of state sovereignty and thus off-limits to state cooperation’ (K. Smith 2004: 3). The critical element here is the emergence of an EU level collective interest on foreign policy issues. If one applies the rational intergovernmentalist logic to 2nd pillar integration, then it could be argued that the CFSP developed as a result of convergence of interests among the EU members to exert a credible presence in international politics. Even though the Maastricht Treaty represented the quantum leap in EU foreign policy cooperation, this does not mean that there were no initial attempts to build the institutional set-up for foreign policy and security integration. The first attempts for building a Common Foreign policy were the agreements signed in the 1950s, with the Pleven plan of 1950. The French Prime Minister Rene Pleven has devised a plan to create a European defense structure that would allow the German remilitarization under a supranational umbrella. This plan formed the basis of the European Defence Community- EDC Treaty signed in Paris on 27 May 1952. The EDC brought along with itself the European Political Community-as a supranational political authority. Even though at its earlier stages, there was great enthusiasm about the project, the problems arose in the ratification stage when the French National Assembly did not ratify the Treaties in August 1954 and effectively killed the EDC and EPC. Most importantly, ‘the EDC left an interesting legacy. Having marked the high point of European federalist aspirations, the failed proposal quickly the aura of a great opportunity lost’ (Dinan 1999: 27). Thus, the first attempt towards a European security community was defeated in its earliest stages. This experience also was important in terms of its implications for the larger European integration process because it demonstrated the difficulties in achieving integration at high politics, most specifically on security and defense issues. The second major attempt to have cooperation for foreign and security policies within the premises of European integration came in 1962 with the French President Charles de Gaulle’s initiative, the Fouchet Plan, designed by the French Ambassador Fouchet for the overall aim of creating a common foreign and security policy. The plan was short-lived, and did not achieve its objectives. However, it paradoxically led to the emergence of a Franco-German axis in Europe that became institutionalized with the 1963 Elysee Treaty. Interestingly, the Elysee Treaty became a cornerstone for further integration in the decades to come when the German and the French leaders used the institutional premises of the Treaty for dialogue and to develop a mutual understanding of consultation with one another. The Franco-German axis of European integration became a force of its own to be reckoned with.

6


The third attempt materialized in the 1970s with the emergence of European Political Co-operation as the European integration process acquired a more intergovernmental character. EPC has evolved largely due to member state preferences, mostly French, and remained out of the institutional structure of the European Community as established by the 1957 Rome Treaty. ‘The EPC was formed for a number of reasons: to balance the EC’s economic weight, to allow member states to speak with one voice in world affairs, and as a step towards political union’ (Smith, K. 2004: 8). Thus, the most important aspect of the EPC was that it provided the basis for coordination among the members of the then EC but also allowed the arrangements that would safeguard the protection of state sovereignty and competencies. From the Paris declaration of 1974, that set the basis of the EPC to 1986 and the Single European Act, the EPC survived outside the community pillar as an intergovernmental area of cooperation. The 1986 Single European Act gave a formal status to the EPC by incorporating it into the EC legal texts and by establishing a secretariat for the EPC in the European Council premises in Brussels (Title III, Article 30). Nonetheless, it still continued as an intergovernmental initiative. The EPC’s first main test came with the Arab-Israeli conflict in 1973. The 1973 Arab-Israeli war and the subsequent oil crisis with the OPEC embargo demonstrated the vulnerabilities of the European economy and required a coordinated foreign policy from the members of the then European Community. The Middle Eastern conflicts illustrated the need for the EC to develop and assert an international identity and visibility. The most visible manifestation of that international identity came in 1980 with the Venice Declaration of the European Community where the European Community heads of government declared for the first time that the Palestinian political rights have to be recognized in the Middle East peace process (Soetendorp 1999: 103). The European Union’s position in the Middle Eastern peace process became more clearly defined in the 1990s. The Peace Conference for the Middle East was held in Madrid in 1991 and the European Union assumed a significant role in the bilateral talks between the parties as well as an important contributor to the multilateral working groups on regional economic development, water, environment, disarmament and the Palestinian refugees. In order to increase the credibility in the supporting the Middle East peace process, the EU created a Special Envoy to the Middle East in 1996. The increased role that the EU played in the Middle East in the 1990s was also partly a result of the desire to operationalize the goals of the Common Foreign and Security Policy adopted in 1992 with the Treaty on the European Union. Thus, one could argue that even though the European presence in the Arab-Israeli conflict began in the 1970s within the framework of the EPC, it was the adoption of the CFSP that provided a clearer direction to European foreign policy. Finally with the Maastricht Treaty, the EPC gave way to the CFSP. The common denominator in the previous experiences and attempts for a common European foreign and security policy was that all remained largely ineffective and weak. Their failures stemmed from the notion that foreign policy is an area that should be left to national governments; especially because of the lack of a collective interest at the supranational level that binds all member states together. The proponents of European integration came to realize that the creation of a common European foreign and security policy would be highly problematic at the


7

supranational realm and would have a better chance of survival if it develops on an intergovernmental basis. Thus, the evolution of the EU’s CFSP is shaped by the very nature of its impact on state competencies and sovereignty. The breakthrough for the European common foreign policy came at the end of the Cold War with the systemic transformation caused by the demolition of the bipolar balance of power institutions. One could easily argue that the end of the Cold War provided the European states with a collective interest: to deal with the emerging uncertainty. The Maastricht Treaty and the CFSP When the Maastricht Treaty was signed in 1992, a major step was taken in the direction of deepening political integration via the adoption of a common foreign and security policy. The Common Foreign and Security Policy were adopted as a separate pillar on its own, the 2nd pillar of the European Union, under the Treaty on the European Union, and replaced the EPC. According to Title V of the Treaty on the European Union, ‘The Union shall define and implement a common foreign and security policy covering all areas of foreign and security policy’. The end of the Cold War in 1989 was a motivating factor that gave a significant boost to the formation of a European level common foreign policy because it created a collective interest at the European level for all member states. This is because the end of the Cold War eradicated the main source of certainty that the European states relied upon to deal with anarchy at the international level; the bipolar balance of power. These structural changes at the international level created a common interest among the European states to find new mechanisms to deal with the systemic transformation underway, which turned out to be political integration and the adoption of the CFSP. This is in line with rational intergovernmentalist theory that puts member state preferences at its core (Moravcsik 1998) and the main mechanism leading to changes in preferences on foreign and security policy is the alternation in the external security environment. Consequently, the European integration proceeded onto the next level, political integration. In other words, uncertainty in the post-Cold War era paved the way for an ever closer union for the European Community with the CFSP as a main pillar of integration, albeit an intergovernmental one. This was an important step in institutionalizing common foreign policy at the European level; however, there was consensus among the EU members that the CFSP would remain intergovernmental, because of the diverging member state preferences over the role of the EU in foreign policy making. The CFSP was the result of intergovernmental bargaining and compromise. In places, the text is intentionally, if frustratingly, vague and existing practices were either confirmed or complicated unnecessarily by the creation of the second pillar. (Holland 1993: 7)

The adoption of the CFSP as an intergovernmental pillar meant that the institutions of the 1st pillar would have minimum involvement in the formulation of a common foreign policy. This also meant that since European Court of Justice did not have any jurisdiction on the CFSP, there was no supranational way of enforcing member state compliance with the CFSP. The formulation of the CFSP in this manner with

8


minimum role for the supranational institutions illustrated the perceptions among the EU members that foreign policy coordination is an area where national interests still play the most important role and where symbolic value of the statehood remains still strong. According to Deighton, ‘ … the pillared structure itself was in part considered as the member states’ firebreak against excessive supranationalism in the still sensitive area of external relations’ (Deighton 2002: 725). The European Council remained the main responsible body for the CFSP; however COREPER – the Committee of Permanent Representatives-was given a key role in coordination between member states and working groups on the CFSP. According to the Maastricht Treaty, the European Council would define and determine the CFSP, as a result, the EPC secretariat was turned into a CFSP unit under the Council Secretariat. The decisions to be adopted under the CFSP umbrella are prepared by the Political Committee, the Directors of the member states’ foreign ministries and then are subject to unanimous vote by the foreign ministers. The Commission, however, could submit proposals under the CFSP in areas covered by the Directorate Generale on External Relations and since enlargement turned out to be most effective tool under the CFSP, the Directorate Generale on Enlargement also plays an important role. The role that the Commission plays under the CFSP would be better understood if one analyses the tools for the CFSP. The most important tools that the EU had for achieving its objectives under the CFSP are the trade agreements, financial aid packages, association agreements and enlargement. It is through these tools that the Commission was mostly involved in the CFSP. For example, the Commission’s Agenda 2000 proposal of July 1997 to declare some applicant countries as candidates, and to begin accession negotiations, was an important step under the CFSP. The nature of these tools also demonstrates that the greatest strength of the EU lies in its civilian power character, rather than hard power. That is because the EU relies on economic measures and incentives to realize its foreign policy objectives. As a result of the civilian nature of the foreign policy tools, the Commission comes to play an important role under the CFSP. This is also how economic policy making and foreign policy would be tied in the CFSP context. The trade, aid packages and/or association agreement negotiated by the Commission with 3rd parties act as advancing the EU’s foreign policy objectives as well. The highest impact in that respect is exerted by the membership incentive and EU conditionality. The EU’s civilian power becomes most explicit on states in the European continent which aspire for full membership, and the carrot of material benefits through membership enables the Union to influence such countries’ political and economic policies as well as their foreign policy choices. The CFSP was to be the main representative tool for declarations on issues relating to foreign policy and the declarations would represent the ‘EU’ rather than the separate member states. This notion paved the way for developing two main instruments under the CFSP: joint actions and common positions. Common positions are mechanisms to establish systematic cooperation on a day-to-day basis and the joint actions are mechanisms to have member states act together in a coordinated manner. The joint actions enabled the EU member states to ‘assert its identity on the international scene’ as aimed by the Treaty on the European Union (Title 1,


9

Common Provisions). What is particularly important is that once a common position or a joint action is decided upon by unanimity, then the member states would abide by its conditions and conclusions. This was a novel aspect of the CFSP that differed significantly from EPC and a step in moving beyond intergovernmentalism in the 2nd pillar. The EU’s position would be presented to the third parties through a Troika formula where the member state holding the Presidency of the Council, along with the previous and the next member states together with the Commission would collectively present the Union. This is to ensure continuity of foreign policy and objectivity by preventing the CFSP to be used by one Member State to advance its own narrow foreign policy objectives through the Union framework. Even though the CFSP was only an initial attempt to common decision-making in foreign policy, it still was considered too ambitious by certain member states. Denmark, for example, ratified the Treaty of Maastricht after the initial referendum rejection, only when it was given the permanent opt-out from the 2nd pillar. Once the Maastricht Treaty became operational in 1993, the EU was able to exert a more credible presence in international politics through the CFSP. The CFSP in Action In the 1990s, the main test cases for the CFSP came with the Balkans crisis and the Central and Eastern European states’ integration into Europe. The end of the Cold War presented the EU with a major problem, the need to stabilize Central and Eastern Europe and to deal with the demands for membership coming from these countries. This, in turn, brings us to one of the most important tools of EU foreign policy making; enlargement. The main tools that the EU utilized under the CFSP were civilian in character with enlargement playing the most effective role. New challenges were posed by the post Cold War enlargement of the EU, most notably towards the Central and Eastern European countries. The European Union’s deepening and widening projects were attempts to strengthen the new world order and to stabilize the European continent by bringing in the former Warsaw Pact countries back to Europe. Thus, one of the main motives for the EU’s enlargement process launched in 1990s was security related and aimed at making the European continent safer. As a result, the EU’s enlargement policy adopted in the 1990s was partly motivated to bring security and stability to the European continent by overcoming the divisions of the Cold War years. Similarly, the EU’s position on Cyprus’ membership was in line with the CFSP objectives; the initial thought was through the EU membership perspective, the EU would be able to bring an end to the division of the island and achieve a political solution that provided elusive under various United Nations plans since 1974 (Müftüler-Baç and Güney 2005). However, the tools under the CFSP were not only confined to enlargement. The Pact for Stability in Europe-the Balladur plan-of 1993 needs to be mentioned as one of the first tools-a joint action- adopted by the EU under the CFSP to settle the border conflicts and minority rights problems in Eastern Europe. Similarly, the EuroMediterranean Partnership, the Barcelona Process of 1995, aimed at the prevention of conflicts in the Mediterranean neighbors and to contribute to economic development

10


in these countries. Instability in the Mediterranean Region carries significant security threats for the EU, as it would have the capacity to diffuse into the European territory (Mahncke 2004). In addition, stability in this region is essential to prevent unwanted migration from the Mediterranean to Europe. The European Neighborhood Policy adopted in 2004 also carried similar objectives encompassing the Eastern borders of the EU. The tools were in line with the overall CFSP objective ‘to contribute to the prevention of and settlement of conflicts’. As with every step in integration, the adoption of the CFSP created the need and pressure for deepening in the 2nd pillar which led to the new provisions on the CFSP under the 1997 Amsterdam Treaty. The 1997 Amsterdam Treaty aimed to fill some of the gaps left open by the Maastricht Treaty and to take the CFSP further. First, the Amsterdam Treaty has devoted Articles 11 to 28 of the Treaty on the European Union on matters related to the CFSP and its Article 18 allowed for the Commission to be involved in the CFSP. Second, it incorporated the Petersberg tasks of the WEUagreed on in 1992- into the EU’s CFSP and specifically stated that the EU’s security related mission in terms of ‘humanitarian and rescue tasks, peace keeping tasks and tasks of combat forces in crisis management, including peace keeping’. Third, the Amsterdam Treaty created the post of Mr.CFSP-High Representative for the CFSP to be the face and the name of European Union foreign policy. Javier Solana assumed the post of High Representative in 1999 when the Amsterdam Treaty was put into force. Fourth, the Treaty paved the way for holding operations under EU/ WEU leadership without unanimous decision-making by introducing the concept of ‘constructive abstention’ by allowing those members who do want to become involved to remain outside of a decision or an operation without blocking the others and without using the veto power. Fifth, it added two more instruments- principles and guidelines and common strategies-to the CFSP on top of the already existing instruments of common positions and joint actions adopted by the Maastricht Treaty. Sixth, it created the early warning unit under the Council in order to enable the CFSP to prepare in advance for conflicts rather than remain largely reactive. All in all, these were important steps towards the operationalization of the CFSP goals. In short, the Amsterdam Treaty attempted to further institutionalize the EU’s CFSP by adopting series of institutional changes, however, the pressing problems in the European foreign policy remained untouched, such as the intergovernmental character of CFSP and its being dependent on the will of the EU member states. An equally pressing problem was the continuing absence of the defense component from the 2nd pillar integration. Title V, Article J4 (1) of the Treaty on the European Union stated, ‘the common foreign and security policy shall include all questions related to the security of the European Union, including the eventual framing of a common security policy, which might in time lead to a common defense’. What is important here is that the Maastricht Treaty already incorporated the possibility of a common defense for the future. The Balkans crisis was a major turning point for the CFSP because it highlighted the difficulties and obstacles in making the EU speak with one unified voice in foreign policy. The evolution of the EU’s common foreign policy in the 1990s demonstrated that if the European Union is to become an international actor on its own right, then this requires the adoption of new tools and mechanisms to increase integration at the


11

political level. Particularly important here is the fact that the EU needs to develop mechanisms to exert some military power. More importantly, this translated into the need to develop a defense policy with the big D rather than only a common foreign and security policy. In other words, the CFSP would not have any meat or muscle to it if it also did not acquire a defense character. This is why in 1998; there was an additional activity on the 2nd pillar with the proposals to increase the European Union’s role in European defense and security. The 1998, St.Malo Summit between the United Kingdom and France became critical in that aspect. UK and France jointly decided in their mini-summit in St.Malo to give new momentum to the EU’s 2nd pillar integration by developing mechanisms with which the aims of the Treaties could be put into action. This is why one could actually conceptualize the St.Malo declaration as the trigger and the founding principle of the European Security and Defense Policy-ESDP. These are in line with the EU’s attempt to deepen its integration at the 2nd pillar and to acquire more military muscle. The EU’s defense role under the ESDP is addressed in another chapter in this volume; however, one needs to note the linkage between CFSP and the ESDP in this manner. At the end of the 20th century, a major challenge to the EU’s CFSP came from the systemic transformation following the 9/11 terrorist attacks against the USA. The changing security conditions and risks following the 9/11 attacks against the USA put terrorism on the forefront of security risks, thereby further complicating the already uncertain international environment. It is in response to the systemic challenges and transformation of the post-9/11 order that the EU took additional steps in the CFSP. Two important developments need to be noted here; the decisions taken in June 2002 European Council and the 2003 Security Strategy Document. In the June 2002 Seville European Council, the European Union members adopted a new position on the CFSP ‘embracing all Union policies, included by developing the Common Foreign and Security Policy-CFSP’ and the European Council declared that the ‘CFSP can play an important role in countering this threat to our security’ (Presidency Conclusions, Seville European Council, June 2002). The Seville European Council, therefore, was a first step in identifying the terrorist threat as an integral part of the CFSP. The future direction of the CFSP in the post-9/11 international order was clarified with the Strategy Document for European Security adopted in the EU Council of December 2003. With this document, the EU identified its main security concerns as terrorism, illegal trafficking of drugs and people, and proliferation of weapons of mass destruction. In addition, the Strategy document for European security focused on the dangers of instability in the perimeters of the EU. As the High Representative for the CFSP, Javier Solana declared in 2003 ‘the integration of acceding states increases our security but also brings the EU closer to troubled areas. Our task is to promote a ring of well-governed countries to the East of the European Union and on the borders of the Mediterranean’. (Solana 2003: 9). Similarly, terrorism in these areas constitutes a major threat for the EU. It is for this reason that new tools under the CFSP were adopted in line with the Strategy Document for European Security. These new security risks and the 2004 enlargement of the EU prompted the EU member states to devise a new tool under the CFSP to realize the objectives

12


raised in the Strategy Document: The European Neighborhood Policy. The ENP was developed as a tool to stabilize the European borders both in the East and in the Mediterranean. ENP was similar to the 1995 Euro-Mediterranean Partnership in terms of its objectives-to bring economic and security benefits to countries in the periphery of the EU without a membership perspective. Thus, the adoption of the ENP point out that the EU is relying on economic measures and its political conditionality to stabilize the EU’s borders, in line with the soft power character of the EU. The European Commission’s 2003 Communication on ‘reinvigorating EU actions and democratization with Mediterranean partners’ operationally define how this is to be achieved-mainly by bringing democracy and rule of law to these countries coupled with a package of economic benefits. According to the European Commission, ‘The ENP is a differentiated policy, offering bilateral incentives and opportunities, in addition to the multilateral nature of the Barcelona Process e.g. where Barcelona envisages trade integration focusing on tariff issues, the ENP goes beyond to offer economic integration, inclusion in networks’. The ENP and the Euro-Med are important tools under the CFSP to have coordinated foreign policy towards the EU’s neighbors with the overall aim of providing for European stability and security. The Strategy Document for European Security is the main framework for the future of the 2nd pillar development. It is a Document that does not draw traditional territorial lines for defense and is flexible in terms of the tools that could be adopted for European foreign and security policy. The main idea in the Document is to build a security identity for the EU with the overall goal of creating and strengthening the zone of security around the EU and stabilizing the European Union’s borders. To sum up, the EU’s evolution of the CFSP has been largely motivated by the external factors, most importantly the systemic transformations first in 1991 and then in 2001. This, of course, is not to deny the role played by the internal dynamics and member state preferences in foreign and security policies. The future development of the EU’s foreign and security policies is determined by the challenges to which the European integration is subject to, posed by both internal and external forces. The Challenges to the CFSP in post-9/11 International Order In the 21st century, the main challenges to the EU’s CFSP can be grouped under two different categories; those posed by endogenous factors- internal problems within the larger context of European integration- and those that are posed by exogenous factors- challenges posed by the international structure. In terms of the exogenous factors, the systemic transformation in post-9/11 period and the subsequent crisis between the USA and the Europeans are the most important challenges. In terms of endogenous factors, the challenges are mainly posed by the limits, pace and the nature of European integration. To turn to the role played by the exogenous factors, international restructuring, the Transatlantic crisis of the early 21st century and the US-European relations are important developments one needs to analyse in order to assess the constraints under which the EU’s CFSP is being shaped. The main shock to the international and


13

European order came on September 11, 2001 when the terrorist attacks against the USA brought new security challenges and issues for international security in general and European security in particular. New Security Risks Posed by Systemic Transformation The September 11 2001 attacks to the USA changed the definition of what constitutes a security risk. What sets the post-9/11 order distinctly different from the Cold War balance of terror is its non-state character, as mainly individuals and non-state organizations become the actors challenging international security. In short, since 9/11, there is a profound change in terms of where security risks come from and in terms of what constitutes a security risk. Since states are no longer the main adversaries, the classical forms of deterrence that characterized strategic thinking for centuries no longer suffice to deal with these new risks. After the Cold War terror mutated from the logic of deterrence based on a nuclear balance of terror into a new imbalance of terror based on a mimetic fear and asymmetrical willingness and capacity to destroy the other without the formalities of war. This imbalance is furthered by the multiple media, which transmit powerful images as well as triggering psychological responses to the terrorist events. (Der Derian 2005: 23)

The emerging security problems for the European continent then seems less in line with the Cold War realities and requires new sets of responses. Rather than deterring a potential state as the main aggressor, there is now the need to deal with unknown risks originating from unspecified enemies. There are two different components in the new responses to deal with the challenges of the 21st century, one is to keep it up in terms of military capabilities and the other is to develop a new understanding between different cultures that seem to be at odds with one another. The American neoconservative defense establishment that happened to be in power when September 11 hit already had a plan for reconstructing the world around ‘the Project for the New American Century’. This plan involved an American foreign policy that uses force against countries suspected of supporting terrorism, hostile to Western ideology, eradicate weapons of mass destruction from rogue states and protection of Israel (Gaddis 2002). However, this position did not go very well with all of the European allies. In addition, the post-9/11 period is important for the signals it presented for the Europeans’ role in security and defense and the diverging positions of different EU member states. That brings us to the second main factor that is shaping the EU’s CFSP: the Transatlantic relations. The Transatlantic Relations The post Cold War period has seen a diverging path between the Americans and the Europeans, which became more visible following the post-9/11 attacks against the USA. The international system has passed through a transformation as the Americans and Europeans seemed to follow different paths of conflict resolution and crisis management (Peterson and Pollack 2003; Stevenson 2003). In the period from

14


2001-2003, the USA has increasingly favoured unilateral policies with the European powers trying to push for multilateral solutions. It has also become a commonplace to argue following Kagan’s propositions that the Americans and the Europeans have different conceptualizations of power (Kagan 2003). In addition, the European and American conceptualization of terrorism and the measures taken against terrorism also differ. That is probably partly why there was a divergence between the USA and the Europeans over the war against terrorism, that does not mean that all the European states think in a similar fashion, for example, the UK is close to the USA in both the definition of security risks terrorism poses and the responses to be taken, whereas France and Germany favour diplomatic measures rather than direct use of force. A real turning point for American and European relations came with the Iraqi intervention in 2003. The American use of force against Iraq in spring 2003 has led to new debates about international norms, legitimate use of force as well as pre-emptive strike as a tool of foreign policy. These new threats to security opened a road towards dividing the world along new demarcation lines in the 21st century. In January 2002, the American President George W. Bush defined an ‘axis of evil’ which included Iran, Iraq and the North Korea as the main threats to peace and stability to the Western order and one month later in February 2002, he called upon ‘a monumental struggle of good versus evil’. These declarations reflected the new path in international politics where different camps were demarcated from another and others through these ideological lenses, reminiscent of the emergence of two camps during the Cold War between capitalism and communism. The use of force against Afghanistan in 2002 and Iraq in 2003 were justified within the general framework of this monumental struggle of good versus evil. The war in Iraq as portrayed in this light, however, had an unexpected consequence, it has highlighted the divergence between the USA and European powers such as France and Germany over the international system and norms, the so called Transatlantic divide (Gordon 2003; Steinberg 2003; Yost 2002). The Transatlantic crisis of 2003 demonstrated that there is always the possibility of a split between the Americans and the EU and that the EU needs to rely on its own power for future security. In this fashion, the Transatlantic crisis of 2003 also illustrated the cleavages inside the EU over security preferences between the Europeanists and the Atlanticists. Interestingly, the Transatlantic relations and the ups and downs it passed through following 9/11 attacks have illustrated in an indirect fashion, the internal problems in the process of European integration, the diverging member state preferences over the CFSP and the lack of political will among EU member states to take integration at the 2nd pillar forward. This, in turn, takes us to the role of endogenous factors in shaping the EU’s CFSP and the lack of political will among EU member states with respect to the EU’s security aspirations. Equally important in that realm is the diverging preferences of the member states with respect to 2nd pillar issues and integration. Political Will and Commitment of the EU Member States One of the main stumbling blocks to further integration on foreign and security policies and in opening the road for an increased role that the EU could play in


15

foreign and security issues is the EU’s member states’ lack of political will with respect to 2nd pillar integration. The EU could acquire a common foreign, security and defense policy only if the EU member states are committed to its development. This commitment could be signaled by the readiness to contribute to the EU’s security role in material and moral aspects. In terms of material aspects, the member states’ contribution to Helsinki Headlines Goals, the European Capability Action Plan-ECAP of 2002, and the budgetary contributions are essential. Who pays for the military operations is still a taunting question, even though Article 28 of the Treaty on the European Union explicitly states that the operational costs for military operations are the responsibility of the participating member states. The financial and budgetary implications of operations are still relatively uncertain. In terms of moral aspects, the emergence of a collective identity around the EU’s possible security and defense role would be necessary. In all these aspects, the EU still has a long way to go. Unless there is a demonstration of political will by the EU member states to cooperate on foreign and security policies, the EU will not proceed on the road of 2nd pillar integration. According to Hill, the development of the CFSP has been subject to … the contradictions between the ambitions of EU member governments to play a larger international role and their reluctance to move beyond an intergovernmental framework in doing so (Hill 1996: 5).

In addition, the main problems remain deeply vested in the integration process. Thus, one could conceptualize the evolution of the CFSP as reflecting the challenges in taking integration forward towards developing the EU in a more federal outlook. Furthermore, the different preferences of the member states over the EU’s CFSP play the most crucial role in shaping security cooperation. There are two important processes here, one concerns the diverging preferences between the EU member governments and the other concerns the extent to which foreign and security issues should involve the EU institutions. The current logic seems to indicate that some member states are more important in that realm of integration and that the EU institutions should play a limited role if any. For example, ‘Blair’s infamous private Downing Street dinner party in October 2001, to which only key Union members were invited until the existence of the meeting was leaked, spoke volumes about some of the shortcomings of the institutions’ (Deighton 2002: 735). That is why the Iraqi war was important in terms of its impact on the EU member governments’ positions on the CFSP. The American intervention in Iraq in 2003 caused a significant split within the EU and signaled a crisis among the EU members over the future of the CFSP. Member states such as UK, Spain, Italy, Portugal and Denmark sided with the USA and its mission in Iraq whereas France, Germany, Belgium and Luxembourg opposed it on grounds of international legitimacy. The crisis reached its peak when these 4 states held a mini-summit on 29 April 2003 to further European efforts in security realm by adopting a plan for European defense union with military headquarters and armament agency. Even though, the plan did not materialize it was sufficient to illustrate the cleavages and splits over European security and defense among the European Union members. What is equally important is that the split inside the EU at the time also demonstrated that the cooperation at

16


the security and defense level in the European Union is still very fragile and could crumple down at the first major crisis as it did in 2003. The mobilizing force for getting 2nd pillar integration back on track was provided by terrorist attacks on the EU soil. The terrorist attacks in Madrid in 2004 and in London in 2005 provided an incentive for the EU member governments to adopt a joint position on security risks. It is, for this reason, that the Solidarity Clause of the Constitutional Treaty was drafted to encourage EU governments’ commitment to the CFSP. The Solidarity Clause of Article 42 of the Constitutional Treaty reads as: ‘The Union and its member states shall act jointly in a spirit of solidarity … the Union shall mobilize all the instruments at its disposal, including the military resources’ (Missoroli 2003: 404). In addition, the Constitutional Treaty foresees an integration of tasks under the CFSP currently divided between the Commission and the Council to be reconciled with the establishment of an ‘External Action Service’ and the creation of a new post, ‘European Foreign Minister’. These are crucial steps in order to make the EU speak with one unified voice in foreign policy. Even though the Constitutional Treaty is yet to be ratified, the drawing up of these Articles is important for generating a European level awareness of mutual obligations and responsibilities member states carry with respect to their common foreign policy and security goals. Conclusion This chapter argued that the evolution of the EU’s CFSP has been motivated by the systemic level factors and subjected to brakes coming from the dynamics of the integration process. The factors that slowed down integration in foreign and security policies were the nature of the integration process and the past experiences in that realm as well as the diverging member state preferences. In addition, the possible impact that coordination and integration in foreign, security and defense policies would have on state sovereignty is a critical factor in determining the future of 2nd pillar integration. Interestingly, it is the systemic transformations and restructuring that motivated the EU member governments to deepen integration in foreign, security and defense policies. The key factor here is the emergence of a collective level interest on the CFSP. The adoption of the CFSP in 1992 was largely motivated by the international balances of power. Similarly, the systemic shock caused by 9/11 attacks provided new incentives for the EU’s 2nd pillar integration. In order to assess the future of the European Union’s security role, one needs to place it in the larger context of the role that the EU would play at the global level. The emerging post-9/11 international security environment revolves around a new polarization in world politics. The role that the European Union could play in that new distribution of power is critical in determining the future of the CFSP. However, the most important determining factor in terms of the EU’s 2nd pillar integration is the pace of European integration and whether the EU is moving along the road towards a federal state or would remain largely an intergovernmental organization. Therefore, it is the member states’ preferences and position along this continuum that would determine the future of the CFSP.


17

References Deighton, Anne (2002). ‘The European Security and Defense Policy’. Journal of Common Market Studies, vol. 40, no. 4, pp. 719-41. Der Derian J, (2005). ‘Imaging Terror: Logos, Pathos, Ethos’. Third World Quarterly, vol. 26, no. 1, March 2005, pp. 23-37. Dinan, Desmond (1999). Ever Closer Union. New York: Palgrave. Gaddis, John Lewis (2002). ‘A Grand Strategy of Transformation’. Foreign Policy, vol. 133, pp. 50-57. Hill, Christopher (1996). The Actors in Europe’s Foreign Policy. London: Routledge. Holland, Martin (1993). ‘Introduction: CFSP: Reinventing the EPC Wheel?’. In Martin Holland (ed.), Common Foreign and Security Policy. London, Pinter. Kagan, Robert (2003). Of Power and Paradise: America and Europe in the New World Order. New York: Alfred Knopf. Mahncke, Dieter, Rees, Wyn, and Thompson, Wayne (2004). Redefining Transatlantic Security Relations. Manchester University Press: Manchester. Missiroli, Antonio (2004). ‘From Copenhagen to Brussels: European defense: Core Documents Volume IV’. Chaillot Papers 67, Paris, EU Institute for Security. Moravcik, Andrew (1998). The Choice for Europe: Social Purpose and State Power from Messina to Maastricht. Ithaca, NY: Cornell University Press. Müftüler-Baç, Meltem and Güney, Aylin (2005). ‘The European Union and the Cyprus Problem’. Middle Eastern Studies, vol. 41, no. 2, pp. 275-287. http: //www. atlanticcommunity.org/Saint-MaloDeclarationText.html The Presidency Conclusions, Cologne European Council, June 1999. Peterson, John and Pollack, Mark (2003). Europe, America, Bush. New York: Routledge. Smith, Karen (2004). The Making of EU Foreign Policy. London: Palgrave. Smith, Michael (1994). ‘The European Union: Foreign Economic Policy and the Changing World Arena’. Journal of Economic Public Policy, vol. 1, no. 2. Soetendorp, Ben (1999). Foreign Policy in the European Union. London: Longman. Solana, Javier (2003). ‘A Secure Europe in a Better World: European Security Strategy’. December 12. Steinberg, James (2003). ‘Elective Partnership: Salvaging Transatlantic Relations’. Survival, vol. 45, no. 2, pp. 113-146. Stevenson, Jonathan (2003). ‘How Europe and American Defend Themselves’. Foreign Affairs, vol. 82, no. 2, March/April, pp. 75-90. Yost, David S. (2002). ‘Transatlantic relations and peace in Europe’. International Affairs, vol. 78, no. 2, pp. 277-300.


Chapter 2

The European Security and Defence Policy: Capabilities and Institutions Gülnur Aybet

The creation of a European security and defence policy separate from NATO, is a goal that has been pursued with varied upheavals and limited success since the 1950s. Therefore its origins go back well beyond the Maastricht treaty which for the first time acknowledged the ‘eventual framing of a common defence policy which might in time lead to a common defence.’1 In fact, the creation of a separate European defence can be traced back to 1946 with the call by federalists in Europe at the time to create a ‘European army’. This was followed in the 1950s with the failed European Defence Community initiative, which eventually led to the creation of the Western European Union in 1954 – an organization which remained dormant for the duration of the Cold War until its absorption into the EU’s defence and security policy under the Second pillar of the Treaty on European Union in 2000. From the 1950s to 2000, these endeavours to create a separate European defence and security policy have consistently faced the dilemma of matching the politically driven process of institution creation with the grave reality of insufficient capabilities which never seemed to meet any target for improvement. This dilemma has become more acute since two developments: First, the adoption of the European Security Strategy in 2003 which addressed an earnest search for a European grand strategy in the aftermath of the transatlantic fall out over Iraq. A grand strategy cannot be implemented with institutions alone, but is in need of military capabilities to fulfil its scope of missions. Furthermore, the EU strategy does not answer the crucial question as to what an ESDP is for. This is where the nuances between the ESDP’s function as a political rather than military tool have to be examined against the backdrop of institution building, emerging threats, capabilities and what security for Europe means. The second development which makes this dilemma more acute has been the transatlantic capabilities gap. This has become more significant in the aftermath of NATO’s Prague summit which unveiled a very ambitious programme of military transformation after September the 11th. This chapter explores the origins of this dilemma in the historical quest for a European security and defence policy during the Cold War and then follows it through the important milestones in the development of an ESDP in the post Cold War era. During this period of institution building from the Anglo-French declaration in St Malo in 1998 to the Nice Summit of 2000 which established the ESDP institutions, 1

Article J.4.1, Treaty on European Union, Maastricht, 7 February 1992.

20


the so-called Berlin-plus procedures for the sharing of assets and capabilities with NATO were also resolved. Throughout this time, the Petersberg tasks which refer to the scope of military missions adopted by the WEU in 1992, were incorporated into the EU. Perhaps the second most intense phase in the development of the ESDP since the period from St Malo to Nice, came after the Iraq crisis of 2003. Now with a programme of improving capabilities in place and the resolution of the participation issue for non EU member states, the Iraq crisis became a catalyst for the search for a common EU strategy. A strategic vision behind ESDP was found lacking before Iraq, particularly vis a vis the US National Security Strategy of September 2002, outlining the concept of ‘proactive counter–proliferation’ for pre-emptive action and a ‘coalition of the willing’ to carry it out ( Daalder, Lindsay and Steinberg 2002). The Atlantic strategic debate seemed one-sided, with the Europeans not being able to frame a coordinated response to the US strategy, and at the same time not having a clear vision about the purposes of an ESDP. The adoption of the European Security Strategy 2003 was intended to address this issue, but it did not form the basis of a grand strategy which defines the over-arching purpose of ESDP institutions and capabilities. After examining the origins of ESDP, the foundation of its institutions, the changing nature of the Petersberg tasks and the adoption of the European Security Strategy, this chapter will explore the headway that has been made in developing meaningful capabilities for a fully functional ESDP. This final section examines the journey from the Headline Goal to the plan to create Battlegroups, whilst looking at progress made by the European Capabilities Action Plan (ECAP) adopted in 2001. The conclusion examines how the institutional dimension of the ESDP, a politically driven process, matches up with the ever-lasting search for better capabilities and whether the EU can develop a security strategy that can place both within the context of threat perceptions and security challenges. The Development of a European Security and Defence Policy The roots of improving the defence capabilities of the European allies can be traced back to the ‘burden sharing’ debates of the late 1960s and 1970s. However, in 1991, when the idea of a European Security and Defence Identity (ESDI) was re-launched at a Franco-German initiative, this was not taken to heart by the United States and Britain. The US Ambassador to NATO at the time, William Taft, commented that ‘the alliance is not going to underwrite a security policy that is made somewhere else.’ In the same spirit, the US Under Secretary of State, Reginald Bartholemew sent a memorandum to the eleven EC states in February 1991 (minus neutral Ireland) that the creation of a separate European security and defence identity outside NATO did not coincide with US interests (Independent, 1991a and 1991b). The Franco-German proposal had suggested the creation of a separate ESDI outside of NATO to be realized with the eventual absorption of the WEU into EC structures. The WEU up until 1984 had largely been a dormant institution, created in 1954 as a stop-gap measure between the failure of the European Defence Community

The European Security and Defence Policy: Capabilities and Institutions

21

(EDC) initiative, and the problem of accommodating the Federal Republic of Germany (FRG) into NATO in the face of French objections. The French proposed EDC, initiated in 1950 and shelved again by the French in 1954 was intended as a supranational defence organization, with a European army, in which German forces would be integrated. It was designed to overcome the problem of Germany’s rearmament and the creation of a German army if it were to join a collective defence organization like NATO. However, the incorporation of defence into a supranational format was a leap too far and too soon for 1950s Europe, and when the EDC initiative was shelved in 1954, and the problem of accommodating FRG into European defence was still unresolved, it was the British plan of enlarging the Brussels treaty and creating the WEU which saved the day in the face of an increasingly disgruntled US Administration. The Brussels Treaty of 1948 was originally signed between Britain, France and the Benelux countries as a collective defence treaty against any aggression towards the signatories. The enlarged Brussels treaty included Italy and Germany and hence the WEU was created.2 After the accession of Germany into NATO in 1955, the WEU’s transitory role ceased to exist, and for the next thirty years it remained a dormant organization. Like sleeping beauty, the waking up of the WEU came several decades later, in the mid 1980s, when the European allies of NATO realized the urgent need to have a unified European voice in defence matters in order to overcome the inertia of not being able to contribute to security and defence decisions reached in Washington. After the WEU’s Rome summit in 1984 which saw its relaunching, the subsequent adoption of a WEU ‘Platform on European Security Interests’ in 1987 initiated a further move to make the WEU very much alive and kicking. However, since the WEU enlargement to include Spain and Portugal in 1988, the end of the Cold War overtook the rehabilitation of the WEU as a European means of addressing the East/ West conflict. Such were the state of affairs, until the Franco-German proposal of 1991, advocating the merger of the WEU into the EC framework, and creating a separate European Security and Defence Identity (ESDI) outside of NATO within the then EC (Aybet 2001: 142-58). During the Political Union negotiations that led up to the Maastricht treaty launching the European Union, the most contentious debate focused on the nature of the ESDI. However, one aspect of the Maastricht treaty left the status of the ESDI edging closer to a link between the WEU and the EU. This was the decision to give the automatic right to all EU states to become members of the WEU. Of the then EU members, Greece chose to activate this provision in its case and became a full member of the WEU in 1992.3

2 The Brussels Treaty was based on the Dunkirk Treaty of 1947 between France and Britain. John Baylis maintains that the Dunkirk Treaty was the origins of British Foreign Minister Ernest Bevin’s attempt to create a Western European security system in order to guarantee US commitment on the continent. While Kent and Young maintain that Bevin’s original intention was to create a European ‘third force’ between the two superpowers. 3 See Declaration of the Member States of the WEU issued at Maastricht, Atlantic News, No 2387, 13 December 1991. See also ‘Treaty on Political Union’, Maastricht, Europe Documents, No 1750, 13 December 1991.

22


This undecided factor over the WEU-EU relationship continued until the 1996 Berlin ministerial meeting of NATO, when the use of NATO assets to make an ESDI operational was put forward for the first time. The Berlin decisions may have seemed politically driven, but in actual fact it was the issue of European capabilities, or more correctly the lack of them, which prompted this practical search for a solution. What caused this departure in the course of events? First, after the war in Bosnia, it became evident that the Europeans were incapable of any meaningful military intervention without the leadership and help of the United States, even when they had the political will to do so. Second, it became evident for the United States that much as they felt uncomfortable about the Europeans creating a separate defence identity, there may be crises in which the US might not wish to take a lead or commit forces. If these crises were occurring in a geographic proximity to Europe and the US and its European allies shared the same interests, then it might be viable to let the Europeans conduct such operations, or share a greater burden in joint operations of this kind. What also emerged after the Bosnian war was the usefulness of NATO’s integrated military structure, and its expertise in training for non-NATO member states who wished to participate in joint peacekeeping operations. Furthermore NATO’s ability to conduct and coordinate an operation like Deliberate Force during the Bosnian war and SFOR, after the war, was all aspects which contributed to NATO’s emerging post Cold War niche. Since ESDI at the time was only a concept, and the WEU although an organization, had no ‘teeth’ in terms of military capability, any development of WEU/ESDI operational capability had to be developed within and through NATO. This was the decision reached at the Berlin summit in 1996. The purpose of combining the ESDI with NATO’s capabilities was to give a military capability to the WEU’s Petersberg type operations, which fall in the domain of collective security such as peace keeping, humanitarian missions and peace enforcement. The WEU had taken this decision at its Petersberg summit in 1992, but since then, had lacked the operational capability to undertake these tasks. The completion of NATO’s Combined Joint Task Force (CJTF) concept, paved the way for enabling the WEU to undertake Petersberg type operations. The sole purpose of CJTF was not only for enabling the WEU to use NATO assets, but also to enable NATO to launch joint operations with non-NATO member states. The Berlin decisions also clarified this by stating that the CJTF concept allowed for a more flexible and mobile deployment of forces, including for new missions...the mounting of NATO contingency operations, the use of separable but not separate (emphasis added) military capabilities in operations led by the WEU, and the participation of nations outside the Alliance in operations such as IFOR.4

The Berlin decision centred on the planning and command of WEU operations, the ‘separable’ capabilities of NATO that could be allocated to the WEU following a 4 Final Communique, Ministerial Meeting of the North Atlantic Council, Berlin, 3 June 1996, M-NAC-1(96)63, parag.5 and 6. IFOR or the NATO led Implementation Force in Bosnia which was deployed at the end of the war in 1995 was in fact the first CJTF in theatre.


23

decision by the North Atlantic Council, and the role of Deputy SACEUR (Supreme Allied Commander Europe – who is always a general from a European country) to act as commander in WEU operations. Giving operational capability to the WEU was therefore entirely dependent on access to NATO operational planning capabilities. During this time, the WEU remained an autonomous organization to the EU, and the development of the EU’s own separate military capability seemed a long way off – not only because of the lack of European capabilities but also to Britain’s objections throughout this time to the development of a separate ESDI within the EU. The turning point of the Anglo-French declaration on European Defence at St Malo in 1998 would change all that and kick start the process of creating the European Security and Defence Policy (ESDP) within the EU and its relevant institutions. The Institutional Dimension of ESDP The EU’s Amsterdam treaty on European Union of 1997 had already clarified the way for the absorption of the WEU into the EU beyond the ambivalence of the Maastricht Treaty of 1991.5 However, the activation of these provisions and the finer details of the institutional arrangements of this absorption became a reality after the turning point of the British–French Declaration on European Defence at St Malo on the 4th of December 1998. Two things emerged from the St Malo decisions. First, that the WEU would be absorbed into the EU and that it would be placed under the 2nd Pillar of the EU structure, which is the Common Foreign and Security Policy. Second, that the collective defence provision of Article V of the Brussels treaty would be retained in the EU, but only for those EU member states who were signatories to the Brussels treaty. Another significant aspect emerging from the St Malo declaration was that the EU could have two types of ‘recourse to suitable military means: European capabilities pre-designated within NATO’s European pillar or national or multinational European means outside the NATO framework.’6 This indicated a departure from the Berlin decisions of ‘separable but not separate’ military capabilities and the development of ESDI within NATO. It also indicated a departure from the close working relationship established between NATO and the WEU. The development of the ESDP within the EU, from the Anglo-French St Malo Declaration of November 1998, to the Nice European Council of December 2000 was a period of intensive activity for putting into place the mechanisms for a functioning ESDP. The EU Cologne summit of 4 June 1999 established the ESDP as an integral part of the CFSP (EU 1999). Following this, at the EU Helsinki summit December 1999, the EU announced the ‘headline goal’ of developing a 50,000-60,000 strong EU force by the year 2003. From this point on, the EU seemed to get serious about 5 Amsterdam Treaty 2 October 1997, Protocol on Article J.7 and Article J.7 parag 1. See also Declaration adopted by the WEU Council of Ministers on 22 July 1997, and attached to the Final Act of the Intergovernmental Conference concluded with the signature of the Amsterdam Treaty, 2 October 1997. 6 Declaration on European Defence, British–French summit, St Malo 3-4 December 1998. Parag 3.

24


the development of capabilities. However, the processes, which were put into place to develop these capabilities initially, did no more than add to the superfluous array of acronyms and institutions within institutions. In the initial stages these consisted of the Helsinki Force Catalogue in 2000, a Capabilities Improvement Conference in November 2001 and the adoption of the European Capabilities Action Plan (ECAP) in 2001. However, the changing nature of security threats as well as the widening range of Petersberg tasks became reflected in the EU’s earnest search for improving capabilities. Hence, the military and civilian aspects of the role the EU could play in crisis management were agreed to at the Feira Summit of June 2000. At the same Council meeting, the EU established the Committee for Civilian Aspects of Crisis Management (CIVCOM). Complementary to this the EU also agreed to provide up to 5,000 police officers for crisis management operations. At the time, police officers from EU countries were already serving in the UN led international Police Task Force in Bosnia. Subsequently, when the EU took over that mission from the UN in 2002, it was evident that its profile in civilian crisis management had increased. These roles were further affirmed in the EU Nice summit of December 2000, which also spelled out the institutional working arrangements for ESDP in the EU. From the Nice Council of December 2000, right up to the Iraq crisis of 2003, the main preoccupation with regard to ESDP was the creation of its institutions. Adopted as interim bodies at the Feira Council, these institutions were subsequently established as permanent bodies in the Nice summit of 2000. The Political and Security and Committee (PSC) deals with all aspects of the Common Foreign and Security Policy (CFSP) including the ESDP. It delivers opinions to the Council to aid in the policy making process, examines draft conclusions of the General Affairs Council and coordinates the different working parties in the area of the CFSP. It also sends guidelines to the EU Military Committee (EUMC) and receives its recommendations. The EUMC is composed of the Chiefs of Defence represented by their military representatives (milreps). Through the EUMC member states are able to consult and coordinate military matters relating to crisis management and conflict prevention. In a crisis situation, it is the EUMC thatconducts military direction and gives instructions to the EU Military Staff (EUMS). The EUMS provide expertise to ESDP operations, in particular the conduct of any crisis management operation in which the EU may be involved. This includes early warning, strategic planning and earmarking of forces. Apart from the three new EU institutions, a new High Representative for the Common Foreign Security Policy (CFSP) was established. Under the Amsterdam Treaty, the High Representative was also to be Secretary General of the European Council. Javier Solana, the former Secretary General of NATO, was appointed as the first EU High Representative in October 1999. At the time of the absorption of the WEU into the EU, two further institutions were also brought under the ESDP. These were the two former WEU institutions of the Satellite Centre in Torrejon, Spain and the Institute for Security studies in Paris. The Satellite Centre, created in 1993 provides support for Petersberg type operations, and general security surveillance for treaty verification and arms and proliferation control, as well as support for fight against terrorism, military exercises and maritime and environmental surveillance.


25

The Institute for Security Studies provides independent research and analysis on security and defence issues and provides analysis for the High Representative. Both institutions were passed on from the WEU to the EU in 2000. Another institutional measure that was adopted with the Nice Treaty in 2000 is Enhanced Cooperation. This relates to the implementation of a previously adopted Joint Action or Common Position with regard to a CFSP with a qualified majority. Since the 2003 Iraq crisis, ‘enhanced’ cooperation also means closer defence cooperation between an EU ‘core’ group of states, leaving out the other member states. In fact, in the draft Constitutional Treaty it was envisaged that a core group of member states could enter into their own military arrangements, referred to as ‘Structured Cooperation.’ Some analysts have even warned that this kind of institutionalization of the ESDP could be detrimental to European integration rather than being a supportive factor (Sangiovanni 2003: 202). The creation of the ESDP institutions has been a politically driven process. While the initial framing of the institutions at the Cologne summit was due to the political trade-offs during the German presidency, the creation of a High Representative was in response to the EU’s once again displayed inertia during the Kosovo campaign and the need to be seen to be doing something in terms of having a European ‘voice’ or ‘face’ attached to a CFSP, or perhaps as a late response to Kissinger’s 1970s plea for a European telephone number (Howorth 2001: 771-2). Overall, three issues have driven the institutional development of ESDP within the EU. First, the Bosnian war, which highlighted the lack of European capabilities in European crises, caused the lifting of US and British objections to the development of the ESDP within the EU. Second, the institution building process in ESDP complemented the far wider integration process in the EU, in parallel with the enlargement process. Third, the changing nature of European Security challenges meant that not only were the Petersberg tasks of 1992 prone to change but there was also a need to adopt new institutions and alter existing ones to meet these challenges. The establishment of CIVCOM and the subsequent adoption of a Counter-Terrorism Coordinator after the 11 March 2004 terrorist attacks in Madrid were amongst these measures. Much as the ESDP institutions within the EU were created in a short period of time, the key institutional arrangement to make ESDP work in the first instance, that is, EU–NATO cooperation was much more difficult to establish. These were the arrangements enabling the EU to have access to NATO planning and operational capabilities, otherwise known as the ‘Berlin plus’ provisions, referring to the 1996 NATO ministerial summit in Berlin which worked out the modalities for military cooperation between the WEU and NATO. The finalization of the Berlin Plus arrangements was a painstaking process, which involved the objections of non-EU NATO member states over participation in EU led operations launched with access to NATO assets. Amongst the non-EU NATO member states, Turkey put forward an adamant resistance to the development of any automatic access of NATO planning and operational capabilities, based on Turkey’s concerns about consultation mechanisms between the EU and non-EU NATO states during the planning phase of an EU-led mission. While EU communiqués from this period stressed the EU’s autonomy in decision making in such situations, given that

26


most of the potential crisis flashpoints were likely to be within a reasonable proximity to Turkey’s geographical location, Turkey’s concerns were based on legitimate security concerns rather than a politically driven policy to block EU access to NATO planning. There was also the marked deviation from the original Berlin proposals – a concern shared by Washington that the ‘separable but not separate’ principle that had been worked out between NATO and the WEU had now become meaningless since the St Malo agreement between Britain and France. For this reason, the then Secretary of State Madeleine Albright had emphasized her ‘three D’s’ where European security and defence were concerned: no decoupling, no duplication and no discrimination (Albright 1998). Decoupling referred to the dismissal of the ‘separable but not separate’ principle, duplication referred to European investment into military efforts that may already exist within NATO, thus duplicating resources unnecessarily. Finally discrimination referred to the very concerns that Turkey was putting forward – the sidelining of non-EU NATO member states in the creation of EU-led operations requiring NATO assets. In fact the Clinton administration were just as wary as the senior Bush administration during 1991, over the potential of ESDP to undermine NATO (Daalder; Goldgeier 2001: 79). By the EU’s Nice summit in December 2000, the provisions for Berlin Plus consultation mechanisms between the EU and non-EU NATO states were put into place. However, Turkey unsatisfied with the consultation provisions blocked the implementation of Berlin Plus from 2000 onwards. Although the North Atlantic Council (NAC) met several times with its newly established counterpart in the EU, the Political and Security Committee, any full implementation of ESDP became impossible as long as the Turkish objections to the implementation of Berlin plus remained. The issue was resolved by the 16 December 2002 Brussels agreement, which opened the way for the strategic partnership between the EU and NATO (EU 2002a). Many factors were to contribute to this resolution. A diplomatic initiative by the United Kingdom to unblock the situation led to the drafting of a proposal referred to as the Ankara document, which included a reinforcement of consultation mechanisms between the EU and the non-EU NATO states. Although the NATO member states were given closer access to the EU bodies, the Political and Security Committee and the Military Committee, these provisions initially did not go far enough for Turkey. By the time the new AKP (Justice and Development Party) government came into power in November 2002, and the priority of EU accession coupled with the EU’s Copenhagen decision on enlargement all played a role in reaching a compromise over the Berlin Plus provisions, which were finalized in December 2002.7 It was only after this breakthrough, which led to the ‘Framework Agreement’ – an exchange of letters between the EU’s High Representative and NATO’s Secretary General – on 17 March 2003, that the EU was able to take over the NATO Operation Allied 7 See Remarks by Javier Solana EU High Representative for the Common Foreign and Security Policy Following the Agreement on the Establishment of EU–NATO Permanent Arrangements. Attachment EU–NATO Declaration on ESDP. Brussels, 16 December 2002, EU Press Release S0240/02. http: //ue.eu.int/newsroom.


27

Harmony in the Former Yugoslav Republic of Macedonia, thus launching the EU operation Concordia. This was the first ‘Berlin plus’ operation as it was an EU-led mission with access to NATO assets. This also enabled the EU to finally take over the NATO SFOR mission in Bosnia in 2004 and establish the EUFOR Althea force, as the second Berlin-plus operation. However, since the resolution of the Berlin Plus provisions, NATO and EU cooperation has been relegated to the area of joint operations in the Balkans. Although NATO and EU bodies meet regularly, they are not able to discuss wider ranging strategic issues such as Afghanistan, Iraq or Darfur. This is because according to the December 2002 agreement between the EU and NATO, only EU member states that are members of the NATO’s Partnership for Peace programme (PfP) can attend EU–NATO meetings. This worked quite well initially with the four EU neutrals Austria, Finland, Ireland and Sweden who were all PfP members. However, since the EU enlargement of 2004 which has included the Republic of Cyprus, and Malta, both not members of PfP, Turkey’s objections to Cyprus sitting on EU–NATO meetings has meant that at these meetings the EU sits as 23 instead of 25.8 Since the EU cannot meet as a whole, nothing beyond existing Berlin Plus operations can be discussed at these meetings. One of the reasons for building ESDP bodies that mirrored NATO committees was to ensure the smooth cooperation between the two organizations, and more particularly enabling planning for EU-led operations where ‘the Alliance as a whole’ would not be engaged to function smoothly. However, EU–NATO cooperation seems to be spilling over beyond the official forum of their respective institutions to ad hoc meetings of EU and NATO ambassadors and foreign ministers outside the formal EU–NATO meetings (Keohane 2006). Fulfilling the Petersberg Tasks The Petersberg tasks were drawn up at the WEU’s Petersberg summit of 1992. The full scale of Petersberg tasks involve humanitarian and rescue tasks such as the evacuation of nationals as well as peacekeeping and combat in crisis management, including peace making and peace enforcement. The Petersberg tasks were envisaged to reflect the then WEU’s ability to carry out humanitarian intervention. This was more likely to be in a traditional peacekeeping role rather than a peace enforcement role, although this was not excluded in the upper end of the scale of the Petersberg tasks. Since the incorporation of the Petersberg tasks into the ESDP within the EU, their scope has widened (EU 2002b). The first enhancement to the Petersberg tasks came at the EU Council meeting in Feira in June 2000. The Feira Council emphasised the civilian dimension of crisis management under the Petersberg tasks which already incorporated the military aspects. In particular, the areas of policing, the rule of law, civilian administration and protection were spelled out. The EU also agreed to provide up to 5000 police personnel to be deployed for conflict prevention and crisis management operations. In

8 Turkey’s objections arise out of the Cypriot rejection of the UN Peace Plan (the Annan Plan) in a referendum in 2004.

28


this context, a Police Capabilities, Commitment Conference took place in November 2001 (EU 2000). After 11 September 2001 and the Iraq crisis of 2003, the range of EU missions in response to new security challenges has gone beyond the traditional understanding of humanitarian rescue missions and peacekeeping, reflected in Article 40.1 of the Draft Constitutional Treaty (EU 2002c). The new tasks involve civilian as well as military crisis management, conflict prevention and non proliferation of WMD (weapons of mass desctruction) as well as Consequence Management (the management of the aftermath of an attack involving biological, chemical or nuclear weapons). However, the EU’s missions on the ground at present still reflect the traditional understanding of the Petersberg tasks. For example, in 2003, the EU launched three operations within the scale of the Petersberg tasks. Operation Concordia commenced in Spring 2003 in the Former Yugoslav Republic of Macedonia as a follow-on to NATO’s Operation Allied Harmony to implement the OHRID Framework Agreement. Because this operation was launched with access to NATO assets it became in effect the first ‘Berlin plus’ operation. Operation Artemis, which was launched in June 2003 at the request of the UN Secretary General to deploy an interim emergency multinational force in the Democratic Republic of Congo was also authorized by a UN Security Council resolution (1484). The two missions were quite different. While Concordia involved policing and implementation of an agreement, Artemis provided stabilization of the security and humanitarian situation to enable a reinforcement of the UN Mission to Congo (MONUC). Because Artemis was launched with France as the Framework Nation without recourse to NATO assets, it became the first EU autonomous military mission (EU 2003a). As Concordia wound down, it was replaced with a policing mission, Operation Proxima to further implement the stabilization process of the OHRID agreement. Proxima commenced in December 2003 with a mandate for one year. Its mission involved overall improvement of the Police force, crime investigations, border management, confidence building, promotion of European standards of policing in all areas and assisting with implementation of reforms by the Ministry of Interior.9 The third of these operations, the EU Police Mission in Bosnia and Herzegovina, which commenced in January 2003, took over the tasks of the UN International Police Task Force (IPTF) mandated by the Dayton Agreement of 1995. With the ending of the UN IPTF mission, the EU took over the continuation of this mission. The EUPM is the first operation launched by the EU as part of its ESDP and incorporates the civilian aspects of crisis management including policing and training emphasized in the Feira council conclusions of 2000. One can conclude from these missions that the progress of creating and implementing the ESDP has come a long way in a short time. However, how far do these missions reflect the security concerns and requirements of EU member states? What is the raison d’etre of EU missions? The answer to these questions should be found in the definition of the Petersberg tasks. Yet, beyond the fact that projecting stability through humanitarian missions and crisis management ought to be in the 9 See the Termination of Operation Concordia and Launch of Mission Proxima, remarks by Javier Solana, Skopje, 15 December 2003.


29

interests of EU member states, it gives little guidance on how the EU missions complement the EU’s need to face new security challenges. Afterall, two of the 2003 missions are follow-on missions: Concordia follows on from an already established NATO mission that has come to an end. EUPM follows on from an established UN mission that has now also been terminated. In 2004 the EU took over NATO’s SFOR mission in Bosnia and Herzegovina, now known as EUFOR Althea. Therefore, is the EU’s future role confined to providing follow on missions to other organizations that wish to bring their operations in one area to a close and move onto another one? This would indicate that the EU has no strategic vision with regard to threats to its security and how it should face new security challenges. However a closer inspection would find that in the case of Concordia, Proxima, EUPM and EUFOR Althea, this judgement would be too harsh as the missions are closely tied into the EU wider strategy of the Stabilization and Association Process. The Process is designed to aid the countries of the Western Balkans to fulfil the conditions for eventual accession to the EU. It also complements the EU–NATO Concerted Approach to the Western Balkans, which reiterates the common vision and interests between NATO and the EU with regard to the Western Balkans and highlights areas of cooperation to achieve this. The common vision comprises the need to have a self-sustaining stability in the region, with democratic governance and a viable free market economy and gradual integration into Euro-Atlantic structures (EU 2003b). The underlying common interest is to seal up any vacuums of instability in the Euro-Atlantic area, particularly the western Balkans with its geographical proximity to the EU. But the EU’s broader approach to security is reflected not just in its global outreach of missions beyond the Balkans, but also the diverse nature of its missions from civilian crisis management to humanitarian aid. The civilian dimension of the ESDP approved by the Feira Council of 2000 was bolstered with the launching of the first Rule of Law Mission in Georgia in 2004. The EUJUST Themis mission assists the Georgian state in reforming their criminal justice system and to improve the legislative process. While EU operation Artemis was transferred back to the UN MONUC mission in the Congo in 2003, the EU launched another police training mission in that country in 2004. EUPOL KINSASHA not only builds on the EU experience of EUPM in Bosnia but also establishes an important working link between the UN and the EU. A further EU mission in Congo, EUSEC-DR Congo was launched in June 2005, aimed to aid the DRC (Democratic Republic of Congo) in security sector reform. The EU’s presence on the African continent extended to AMIS I and II in 2004 (the peacekeeping mission in Darfur) charged with observing compliance with the ceasefires. The EU’s ever growing presence in police training was taken further with the establishment of EU COPPS (EU Coordination Office for Palestinian Support) in Palestine, in 2005. Within the same year, EU missions in the Middle East continued with EUJUST LEX in Iraq, which gives training to the judiciary, the police and prison administration in criminal justice reform. However, while there is a definite EU vision with regard to the Western Balkans, and although it has made headway in launching global ESDP mission beyond the Balkans, it is not always evident that the EU is as focused in defining the wider global security challenges and how it intends to meet them. Between 2002-2003, the

30


further refinement of the nuances of the Petersberg tasks took place in various EU declarations with regard to facing new security challenges. The deteriorating situation in the Middle East and the threat of terrorism led to the broadening of the scope of the ESDP at the European Council summit in Seville, in June 2002. This broadening of the EU’s strategic mission to include the rule of law, the ESDP contribution by police forces, judges, prosecutors and legal administrators. Also at the Seville Council, the tools available to the EU for longterm and short-term conflict prevention, ranging from fact-finding missions, rapid deployment to international financial policies, promotion of human rights and arms control were explored (EU 2002d). In terms of long-term conflict prevention, the EU’s then preliminary work on how it could contribute to the fight against international terrorism was given a head start at Seville. This was further re-iterated in the European Council meeting at Thessaloniki in June 2003, in the Presidency Report on EU External Action in the Fight Against Terrorism, indicating how far the original Petersberg tasks had evolved. At Thessaloniki the EU established a database of EU capabilities to deal with the protection of civilian populations against the effects of a terrorist attack involving chemical, biological, radiological and nuclear weapons (CBRN). A special report by the High Representative for ESDP was also presented on the CBRN terrorism threat for EU countries. Guidelines for a Common Approach to the Fight Against Terrorism emphasized the role the EU could play in assisting third countries to fulfil their obligations under UN SCR 1373. Furthermore, enhanced cooperation and coordination across the three pillars especially between CFSP and Justice and Home Affairs (JHA) was established (EU 2003c). In terms of defining the threat from Weapons of Mass Destruction (WMD), the EU also took a significant leap in its commitment and programmes for dealing with this security challenge in June 2003. The ‘Basic Principles for an EU Strategy Against Proliferation of Weapons of Mass Destruction’ was adopted at the Council Meeting in Luxembourg on the 16th of June. An Action Plan for the implementation of these Basic Principles accompanied the document. The Action Plan was put in place with the ‘EU Strategy Against Proliferation of Weapons of Mass Destruction’ adopted at the Brussels Council in December 2003. Both documents stress the CFSP’s commitment to multilaterism in solving the problem of WMD proliferation. The key roles that the EU could play were identified as a focused dialogue with countries suspected of proliferating, exercising co operative threat reduction initiatives, allocation of resources to international arms control and inspection regimes, and bolstering the EU’s central role in export controls. Perhaps, the most significant statement was the use of force as a measure of last resort, only in accordance with the UN Charter, and only after the failure of diplomatic initiatives. Therefore, the previous emphasis in the early 1990s of making the provisions of the UN Charter fit with humanitarian intervention were interchanged with using the same provisions of international law to intervene militarily to prevent proliferation of WMD. The emphasis of ‘in accordance with the UN Charter’ reflected the EU’s growing need to have a common ground with the US on WMD proliferation, while stressing the EU’s commitment to avoid a replay of the Iraq crisis. While spelling out its vision of new security challenges, the EU was thus also laying the ground for


31

future US-Europe cooperation on the basis of multilaterism.10 Thus the groundwork for creating a coherent EU strategy to address the threat of proliferation was laid in the Basic Principles as well as the Declaration on Non-Proliferation of Weapons of Mass Destruction (EU 2003d and 2003e). Therefore, as the EU sought to address new security challenges throughout 20022003, the Petersberg tasks as they remained in the Treaty of Political Union had significantly altered, as the EU missions were broadened in scope and area. By the end of 2003, the definition of EU missions were no longer confined to the Petersberg tasks, but outlined in a new strategy for the European Union. Capabilities: From Headline Goal to Battlegroups After the Bosnian war it became evident that European capabilities were not sufficient to deal with European crises, and following the launching of the ESDP process within the EU with the St Malo Anglo-French summit, the EU adopted the Headline Goal at the Helsinki European Council in December 1999. The Headline Goal was to be a 60,000 strong EU force readily deployable in 60 days and sustainable or a year in support of the full range of the Petersberg tasks. A Capabilities and Commitments Conference held in November 2000 established a Headline Goal Task Force was (HTF) to meet the operational requirements established by the Headline Goal. A new mechanism was also set in place to enable the discussion of issues relating to Headlines Goal where they were relevant to EU–NATO relations. In this respect, an ‘HTF plus’ was established consisting of the HTF and NATO experts. Much of the work of the conference was based on the Helsinki Headline Catalogue, which had made initial reviews of the available, required and expected forces and assets to put the Headline Goal in place by 2003. A year later, a Capability Improvement Conference followed this in November 2001, which specifically addressed the capability gaps in the EU. The areas highlighted for improvement included force protection, operational mobility and logistics, as well as acquisition of related technologies. In order to address these shortfalls, a European Capabilities Action Plan (ECAP) was launched at the Laeken European summit in December 2001.11 However, at NATO’s Prague summit of November 2002, the ‘capability gap’ between the United States and its European allies was highlighted once more. In the short time that the ESDP had become institutionalized within the EU and the improvement of European capabilities had started with the ECAP process, it became evident that the voluntary nature of ECAP made it difficult to sustain commitments not matched by necessary funding. Furthermore, during this time the ECAP lacked leadership with the EUMS taking part but facing difficulties coordinating the nineteen panels of national experts dealing with issues ranging from nuclear, biological and chemical protection to strategic air mobility. The working method of national experts 10 Basic Principles For an EU Strategy Against Proliferation of Weapons of Mass Destruction, Brussels 10 June 2003. Adopted as a living document at the General Affairs and External Relations Council, Luxembourg 16 June 2003. 11 Presidency Conclusions, European Council Meeting in Laeken, 14 and 15 December 2001.

32


and the lack of a coordinated leadership over the panels, coupled with the ECAP’s limited scope in only addressing shortfalls in the commitments to the Headline Goal, have hardly made it an innovative exercise. As most NATO members are now also EU members, the compatibility of the two processes of capabilities improvement in both institutions becomes crucial, even if EU operations are unlikely to develop swift deployment and lethal strike capability based on the US model in the foreseeable future. However, NATO’s Defence Capabilities Initiative (DCI), launched at the Prague summit of 2002, primarily to improve the capabilities of European allies, has similar flaws to the ECAP process in delivering the desired results. This is because it seeks to develop capabilities across the entire European defence posture including stationary forces, instead of focusing on specific forces, those ‘European pockets of excellence’ (Binnendijk and Kugler 2002: 126). The ECAP process also did not focus on specific European assets but presented a study of shortfalls across the spectrum of European capabilities. The first reports of the ECAP in March 2003, did not involve national planners or procurement specialists. Therefore it became unclear as to how the panel’s findings could lead to the implementation of developing new capabilities. While a few months later at the third EU Capabilities Conference in May 2003, the EU defence ministers declared that the EU ‘now has operational capability across the full range of Petersberg tasks’, nevertheless there was also an acknowledgement that this capability remained ‘limited and constrained by recognized shortfalls.’12 Recognizing the need to better coordinate ECAP’s efforts and find means to implement its findings, initially the Capability Conference established Project Groups focusing on specific projects looking at solutions ranging from acquisition to leasing. Furthermore, the Council tasked the EUMS and EUMC to develop a roadmap to monitor the ECAP process. In accordance with all these new changes the Council also endorsed the Capability Development Mechanism in March 2003. While much of this did no more than keep a check on ECAP, there were also necessary adjustments to be made, not just in terms of facing new security challenges but also to accommodate the contributions of the ten new members who joined the EU in 2004. In 2004, two further developments occurred in relation to the development of capabilities. At the November 2004 Capability Commitment Conference, it was decided that a European Defence Agency (EDA) would be created which would be tasked with coordinating the implementation of ECAP, assessing and evaluating the capability commitments given by EU member states and promoting and harmonization of military requirements.13 What remains significant about the EDA is that it provides a link between the European defence industries, the EU institutions and the EU Member States. Its main areas of investigation include the efficiency in Command Control and Communications, harmonization and improvement of future technologies and convergence of requirements and programmes across the industry.

12 Declaration on EU Military Capabilities’ 19 May 2003, General Affairs and External Relations Council, 19-20 May 2003, Brussels. 13 Annex B ECAP Evaluation, Military Capability Conference, General Affairs and External Relations Council.


33

In actual fact, 2004 was the turning point in making the development of EU military capabilities more meaningful in terms of fulfilling the requirements outlined in the European Security Strategy of 2003. The original Headline Goal and establishment of ECAP in 2001, although driven by the requirement to address European shortfalls in military capabilities after the Bosnian war, were by and large politically driven initiatives in the wake of the St Malo agreement. These initiatives complemented the overall deepening of integration and fortifying existing institutions by augmenting them with new ones as established in the Nice Treaty of 2000. It was after the adoption of the European Security Strategy of November 2003, that a new direction for ESDP, and a more comprehensive approach to security was explored. This is why the European General Affairs Council of 22 November 2004 was quite intense in building new institutions and initiatives to bridge the gap between the political, strategic and institutional aspects of the ESDP’s development. This also complemented the changing nature of the Petersberg tasks outlined in the previous section. This involved the transition from missions entirely confined to traditional humanitarian and peacekeeping missions to a wider spectrum involving civilian and military crisis management, conflict prevention, non-proliferation of WMD and Consequence Management. Although the Police Capabilities, Commitment Conference that took place in November 2001 was the initial step in getting serious about civilian capabilities, it was the General Affairs Council of November 2004, which established the Civil-Military Cell. At the same meeting, a Civilian Capabilities Commitment Conference was held. The conference also established a Civilian Headline Goal for 2008 and a European Gendarmerie Force (EGF). This incorporation of the wider aspects of ESDP in accordance with the European Security Strategy, led to a widening of civilian missions beyond the two policing missions the EU took over in Bosnia and Herzegovina and the Former Yugoslav Republic of Macedonia (FYROM). By 2005 the EU had launched new civilian missions, to monitor the peace process in Aceh, support the stabilization process in the Democratic Republic of Congo, and giving support to the Iraqi rule of law sector. Furthermore, in November 2005, the Council decided to deploy an EU Police Mission for the Palestinian Territories (Eupol COPPS).14 But by the end of 2004 it was not just the civilian aspects of the ESDP that went through a major ‘rehaul’ but also the military aspects as well. Apart from the establishment of the EDA, the European Council also established the new Headline Goal of 2010 and the EU Battlegroups at the meeting on the 22nd November 2004.15 The new Headline Goal 2010 introduced in May 2004 and endorsed by the European Council in June 2004 also reflects the European Security Strategy and the changing strategic environment. As the Petersberg tasks now range from full crisis management operations to peace enforcement, new technologies also need to be adopted to meet a full spectrum of operations. The Headline Goal 2010 is supposed to enable the EU to: ‘respond to a crisis with rapid and decisive action applying a fully 14 Council Joint Action on the European Union Police Mission for the Palestinian Authorities, Brussels, 14 November 2005. 15 Military Capability Conference, Draft Declaration on European Military Capabilities, General Affairs and External Relations Council, Brussels 22 November 2004.

34


coherent approach to the whole spectrum of crisis management operations covered by the Treaty on the European Union.’16 Among the milestones to be achieved under the Headline Goal 2010 are, the establishment of EDA which has already taken place, the creation of a civil-military cell within the EUMS, the development of a European Airlift Command, the availability of an aircraft carrier and improvement of communications equipment. The most significant of the Headline Goal tasks is the establishment of rapidly deployable EU Battlegroups. Battlegroups are forces of approximately 1,500 troops, formed by one nation acting as Framework Nation or a multinational coalition of member states. The idea behind the Battlegroup concept is to enable the EU to take a decision to deploy within five days of the Council approving a Crisis Management Concept. The force is supposed to be deployed on the ground no later than 10 days after the EU takes the decision to launch the operation. The Headline Goal 2010 and the formation of battlegroups are not a means to address the shortfalls of the EU not being able to meet the original Headline Goal of 2003. In fact when one does not specifically count ESDP missions but the engagement of European forces as a whole from Afghanistan to Iraq, European contributions to UN missions, as well as the proliferating ESDP missions, it is evident that the then 15 members of the EU met the Headline Goal by 2003 (Giegrich and Wallace 2004: 168). In actual fact, the battlegroups address the issues of a changing security environment, a wider range of Petersberg tasks and new European Security Strategy. The EU battlegroups, expected to be fully operational by 2007, not only address the issue of rapid deployment but also the adoption of new technologies and interoperability. The complementary nature of the battlegroups as they evolve to the NATO Response Force (NRF), which is a cutting edge rapidly deployable unit, ensures their development in the same light.17 The battlegroups could either be an expeditionary force to solve a limited crisis or be an entry force paving the way for a larger mission of the peace enforcement type, or act as an emergency force supporting in theatre existing peacekeeping forces in the event of a local and limited crisis (Kerttunen, Koivula and Jeppson 2003). However, in order to implement the Headline Goal 2019 and the Battlegroups, the EU is in need of strategic lift (land, sea and air) capability for rapid deployment to distant theatres, which also complements the EU Security Strategy and also NATO’s strategic concept. Therefore, at the same meeting of November 2004, the EU also launched the concept of a ‘Global Approach to Deployability’ set to improve strategic transport. Although the GAD was introduced for the first time within the framework of the ECAP in 2003, it is more than just another measure to improve capabilities; it also conceptually complements the overall approach of the European Security Strategy that will be explored below.

16 General Affairs and External Relations Council, Brussels May 2004, European Security and Defence Policy, Council Conclusions. 17 Military Capability Commitment Conference, General Affairs and External Relations Council, Brussels, 22 November 2004.


35

In Search of a European Strategy The European Security Strategy adopted at the Brussels European Council in December 2003, was the first document of its kind, which outlined a global vision and purpose for the EU, vis-a-vis global security challenges and threats. The strategy defines four key threats to European security: Terrorism, proliferation of WMD, regional conflicts whether close or far from Europe which could impact European interests directly or indirectly, failed states and organized crime. The emphasis on distant threats that ought to be as much of a concern for Europe as those close by indicates the need for the EU to play a far more active, global role with regard to security, rather than a regional one, concentrating on its borders and periphery. In this context Europe’s new neighbourhood is defined as Near East of the EU, the borders of the Mediterranean and even the Southern Caucasus, which is in due course going to be a neighbouring region. The EU strategic objective in building a safer neighbourhood is to: ‘promote a ring of well governed countries to the East of the European Union and on the borders of the Mediterranean’ (EU 2003f). One area in this respect where transatlantic relations must find a common ground and working relationship is the Middle East Peace Process, which is outlined as one of the strategic objectives of the EU. The two-state solution advocated by the strategy paper is seen as a priority for the EU. 18 The EU strategy also emphasises multilaterism amongst its strategic objectives, particularly the commitment to international law. It also advocates strengthening international organizations, regimes and treaties so that they are effective and can take the necessary actions when their rules are broken. Since the Iraq crisis American policy makers have emphasized that the credibility of institutions is not upheld by merely living by the rules but enforcing them. To an extent the EU strategy seeks to find middle ground on the issue after the transatlantic fallout over Iraq. In the short run, the objectives of the EU’s strategy sets in place many tasks for the EU. Five key areas are emphasized as having policy implications for Europe: First, the EU needs to be more active, with a strategic culture in place for early, rapid and robust intervention. The development of operations of military and civilian capabilities is seen as more cost effective for the EU. Second, the EU needs to increase its capabilities. Third, the need to have common threat assessments is linked to the requirement to improve sharing of intelligence among member states. Fourth, a more coherent structural approach from the EU is needed. This would involve not only better coordination between CFSP and ESDP but also other tools of the EU such as the European Development Fund and assistance programmes, as well as better cross-pillar cooperation between CFSP and Justice and Home Affairs. A streamlining of all the different EU instruments means a more efficient means to combat terrorism and organized crime. Fifth, the strategy paper stresses the importance of working with partners, particularly the transatlantic relationship as ‘irreplaceable’ but also emphasizes the need to build a closer working relationship

18 The strategic objectives for the EU vis a vis the Middle East and Mediterranean were further spelled out in an interim report to the Council in March 2004. See EU (2004).

36


with Russia as well as the development of strategic partnerships with Japan, China, Canada and India. Although terrorism was identified as a key threat in the strategy paper, the policy implications for the EU were brought to the forefront after the terrorist attacks in Madrid on the 11th March 2004. The impact of this on how the EU formulates its policy planning and implementation in line with the strategy, has been a speeding up of the mechanisms and legislation needed to combat terrorism. First, the EU states decided to act jointly in the spirit of the Solidarity Clause in the Article 42 of the draft Constitution. While, this does not constitute a collective defence provision, it nevertheless is a commitment of joint action in the event of a terrorist attack: The Union and its Member States shall act jointly in a spirit of solidarity if a Member State is the victim of a terrorist attack or natural or man-made disaster. The Union shall mobilise all the instruments at its disposal, including the military resources made available by the Member States...19

In terms of stepping up the legislative process to combat terrorism in the aftermath of the 11th of March, the EU adopted the Declaration on Combating Terrorism, which emphasized the urgency for member states to implement the legislative measures for combating terrorism which were already put in place. These included, the European Arrest Warrant, freezing and confiscation of proceeds of crime, and police and judicial cooperation. The EU also tasked the Council to examine ways to enhance exchange of information on convictions for terrorist offences, the establishment of a European register of conviction and a database on forensic material. The Declaration also called for enhanced cooperation between the existing EU bodies of Europol and Eurojust. Better information systems across Europe were also emphasized in the Declaration. The coming into force of the Schengen Information System (SIS) by June 2004 was seen as an important step in realising this goal. The exchange of information with regard to organized crime and terrorism was further enhanced with the Hague Programme of October 2004.20 Consequence management after a terrorist attack, addressing of the factors, which contribute to the recruitment into terrorism, and better sharing of intelligence. Specific measures were called for to protect transport and populations and the appointment of a Counter-Terrorism Coordinator. 21 The European Security Strategy was launched after the detailed process of building the ESDP’s institutions and the launching of processes to overcome the deficiencies in capabilities. But as Binnendijk and Kugler observe: ‘a new defence initiative cannot be launched in a political and strategic vacuum’ (Binnendijk and Kugler: 118). Although the Strategy paper has overcome this to some extent, it still does not go far enough to address what the ESDP is precisely for. A common European threat perception is far from spelled out but the broader approach to 19 Article 42, Draft Treaty Establishing a Constitution for Europe, 20 June 2003. 20 The Hague Programme, ‘Strengthening Freedom, Security and Justice in the European Union’ European Council, Presidency Conclusions, Brussels 4-5 November 2004. 21 ‘Declaration on Combating Terrorism’ EU Council. See also Summary Transcript Joint Press Briefing, Brussels, 30 March 2004, S00090/04.


37

security, which the strategy paper addresses complements the widening scope of the Petersberg tasks. More significantly, the strategy paper brings better synergy between the EU’s military and civilian crisis management capabilities. Conclusion: What is ESDP for? There are several policy implications for the EU on how it deals with the global security challenges it has identified in its strategy. Already, from the period of 2001 to 2004 the EU’s missions have altered significantly since the original Petersberg tasks of 1992. However, the question of what the ESDP is actually for has not been addressed no matter how impressive the proliferation of missions may be. Perhaps this has a lot to do with the ad hoc way in which the ESDP has evolved with various hiccups along the way from intense diplomatic disagreements over the nature of the institutions, the nature of EU–NATO arrangements for sharing assets and the ever increasing need to meet capability goals not complemented by a required increase in defence budgets. But perhaps the ESDP is meant to evolve not with a grand strategy but on the basis of the missions it is capable of. The widening of the Petersberg tasks to include civilian crisis management aspects and the broader approach to security reflected in the European Strategy Paper, have been a reflection of the EU’s growing profile in civilian aspects of crisis management in recent years. The increasing EU police training and judicial reform missions on a global basis, the improved synergy between the Justice and Home Affairs and ESDP as well as the establishment of the Schengen Information System make this point evident. The drive for creating EU institutions may have been a politically driven process to further European integration and strengthen European capabilities after the lack of European input over Bosnia and then Kosovo. Certainly, the Anglo-French rapprochement over European defence at St Malo and the internal politics of the German presidency in the run up to the Cologne summit of 1999, had much to do in precipitating a speedy process of institution creation. This all happened without the basis of an overall strategy defining the purpose of ESDP. However, since September the 11th, the following interventions in Afghanistan, then Iraq, the Madrid terrorist attacks of 2004 and the London terrorist attacks of 2005, ESDP had evolved without a blueprint strategy based on hypothetical scenarios. While a common European threat perception is still not as lucid as that of the threat faced by the Soviet Union during the Cold War, nevertheless, these events have not only shaped the way the ESDP has recently evolved but they have also brought improved synergy between the EU’s military and civilian capabilities, as well as addressing the awkward but necessary transatlantic partnership after the Iraq crisis, and future compatibility between EU and NATO capability initiatives. The EU’s 2010 Headline Goal and the Battlegroups concept certainly reflect this. In the short run, the EU has several capabilities to deal with many of the new threats it identifies in its strategy. These capabilities are mostly civilian and to some extent military. But the strengths of the EU in diplomacy with third countries, the freezing of assets that finance terrorism and organized crime, and passing of new

38


legislation and the implementation of existing legislation to enforce commitments in the fight against terrorism, means that the EU has plenty to do in the short run. In the long run, it will have to build better military capabilities, further developing the work set in place by ECAP and the EDA. However, it is unlikely to match US capabilities of swift deployment and lethal strike aided with new technologies such as smart munitions. However, this does not mean that US and European forces will not be able to fight together in the future. It seems that for some time European forces will fill the wider spectrum of Petersberg tasks, augmentation to larger combat operations, peacekeeping, humanitarian and rescue missions and civilian crisis management, including police missions and judicial reform. After all, present ESDP missions reflect all of these tasks. References Albright, Madeleine. (1998). ‘The Right Balance Will Secure NATO’s Future’. Financial Times. Aybet, Gülnur. (2001). The Dynamics of European Security Cooperation 1945-1991. London: Palgrave. Baylis, John. (1982). ‘Britain and the Dunkirk Treaty: The Origins of NATO’. Journal of Strategic Studies. Binnendijk, Hans and Richard Kugler (2002). ‘Transforming European Forces’. Survival. Chaillot Papers No 51. (2002). From Nice to Laeken, European Defence Core Documents, EUISS Paris. Chaillot Paper No. 67 (2003). From Copenhagen to Brussels: European Defence Core Documents, Vol. IV, EUISS Paris. Chaillot Papers No. 75 (2005). EU Security and Defence Core Documents, Vol V, February EUISS Paris. Chaillot Paper No. 87 (2006). EU Security and Defence, Core Documents 2005. Volume VI, EUISS, Paris. Daalder, Ivo, James Lindsay and James Steinberg (2002). ‘The Bush Nation Security Strategy: An Evaluation’. Brookings Policy Paper. The Brookings Institution: Washington DC. Daalder, Ivo and James M. Goldgeier (2001). ‘Putting Europe First’. Survival. Vol 43, No 1. European Union (2000). Presidency Conclusions, Santa Maria de Feira European Council, 19 and 20 June 2000, Annex 1, Presidency Report on Strengthening the Common European Security and Defence Policy, III. Civilian Aspects of Crisis Management. European Union (2001). ‘Presidency Conclusions’, European Council Meeting in Laeken, 14 and 15 December 2001. European Union (2002a). Council of The European Union Communication from High Representative to Secretary General, ‘ESDP: Implementation of the Nice Provisions on the Involvement of the Non-EU European Allies’, Annex to SG(2002)1348 Brussels 13 December 2002.


39

European Union (2002b). Article 17.2 Consolidated Version of the Treaty on European Union, 24 12 2002 Official Journal of the European Communities, C325/5. European Union (2002c). ‘Draft Treaty Establishing a Constitution for Europe’, Thessaloniki, 20 June 2003. European Union (2002d). European Council, Seville, 21-22 June 2002, Presidency Report on ESDP, and Presidency Report on the EU Programme for the Prevention of Violent Conflicts. European Union (2003a). General Affairs and External Relations Council, Luxembourg 16 June 2003 and Statement by NATO’s Secretary General –Berlin Plus, Brussels, 17 March 2003 and see also EU Council Joint Action 2003/92/ CFSP Brussels, 27 January 2003. European Union (2003b). EU–NATO Concerted Approach to the Western Balkans, Brussels, 29 July 2003. See also EU–Western Balkans Summit, Thessaloniki, 21 June 2003. European Union (2003c). Presidency Report to the European Council on EU External Action in the Fight Against Terrorism, Thessaloniki, 19-20 June 2003. European Union (2003d). Declaration on Non Proliferation of Weapons of Mass Destruction, European Council, Thessaloniki, 19-20 June 2003. European Union (2003e). EU Strategy Against Proliferation of Weapons of Mass Destruction, European Council, Brussels, 12 December 2003. European Union (2003f). European Security Strategy: A Secure Europe in a Better World, Brussels, 12 December 2003. European Union (2004) Interim Report on an ‘EU Strategic Partnership with the Mediterranean and the Middle East’ Brussels, 19 March 2004, 7498/1/04. Giegrich, Bastian and William Wallace (2004). ‘Not Such a Soft Power: the External Deployment of European Forces’ Survival. Vol.46, No.2. Heuser, Beatrice and Robert O’Neill (1992). Securing Peace in Europe 1945-1962. London: Macmillan. Howorth, Jolyon (2001). ‘European Defence and The Changing Politics of the European Union: Hanging Together or Hanging Separately?’. Journal of Common Market Studies. Vol. 39, no. 4. Keohane, Daniel (2006). ‘Unblocking EU–NATO Cooperation’. CER Bulletin, Issue 48. June-http: //www.cer.org.uk/articles Kerttunen, Mika, Tommi Koivula and Tommy Jeppson (2005). EU Battlegroups: Theory and Development in Light of Finnish-Swedish Cooperation. National Defence College, Department of Strategic Defence Studies, Helsinki. Series 2, Research Reports No 3, http: www. Mpkk.fi/attachment/EU+Battlegroups. Independent (1991a). ‘US Warns EC not to Disrupt NATO’. Independent (1991b). ‘Washington’s Alarm at EC Defence Plans’. Sangiovanni, Mette Eilstrup (2003). ‘Why a Common Security and Defence Policy is Bad for Europe’. Survival. Vol. 43, no 3.


Chapter 3

The EU as an International Actor: ‘Civilian’, ‘Normative’ or ‘Military’ Power? Yannis A. Stivachtis

In the 1970s, Francois Duchene called the European Community (EC) a ‘civilian power’ (Duchene 1972; 1973). In 1982, Hedley Bull launched a critique of the EC’s ‘civilian power’ in international affairs by stating that ‘Europe is not an actor in international affairs, and does not seem likely to become one...’ (Bull 1982: 151). Actually, Bull was responding to the suggestions of various analysts, including Duchene, who claimed that traditional military power had given way to progressive civilian power as the means to exert influence in international relations. In 2002, Ian Manners argued that the label ‘normative power’ would be better suited to describing the European Union (EU), which relies on civilian rather than military means, and pursues the spread of particular norms rather than geographical expansion or military superiority (Manners 2002). However, since the 1970’s the increasing role of the European Union (EU) in areas of security and defense policy has led many to argue about the notion of ‘military power Europe’. It is not much disputed that the EU is a different type of international actor and represents a new kind of power in international politics. Indeed, there is a widespread belief that the EU is a novel kind of power not only in its own institutional set-up, but also in its external relations (Diez 2005: 613). According to Thomas Diez (2005: 613), even more controversial is why this should be the case. Robert Kagan, for instance, has argued that the difference between the foreign policy values predominant in Europe and those in a more traditional power like the United States (US) largely reflect different power capabilities (Kagan 2003). There is also some dispute about the consistency of EU behavior (Diez 2005: 614). Many analysts, therefore, pose the following questions: Are there double standards in the application of norms in EU policies towards other parties? Do different EU actors (e.g., the European Commission, Parliament, and Council, as well as different actors within these institutions) pursue different norms and interests? Is there an increasing militarization of EU external relations? For Diez, while these questions are relevant, they ignore the power that lies in the representation of the EU as a normative power (Diez 2005: 314). Not only is the success of this representation a precondition for other actors to agree to the norms set out by the EU, but it also constructs an identity of the EU against an image of ‘Others’ in the ‘outside world’. Diez argues that this has important implications for

42


the way EU policies treat those ‘Others’, and the degree to which its adherence to its own norms is scrutinized within the EU. In that sense, the discourse of the EU as a normative power constructs a particular self of the EU, while it attempts to change others through the spread of particular norms (Leonard 2005: 34). The purpose of this chapter is twofold. First, it seeks to examine the nature of European power; and second, to investigate the relationship between the civilian, normative and military character of the European power. In so doing, the chapter will draw on the work of Ian Manners and Thomas Diez and it is divided into five sections. The first and second sections discuss the concepts of ‘civilian’ and ‘normative power’. The third section explores the relationship between civilian and normative power while the fourth one examines the EU’s normative basis. The fifth section focuses on the relationship between normative and military power. Europe as a ‘Civilian’ Power The idea that Europe could become a different kind of power that does not rely primarily on military but on civilian means was first explicitly formulated in the early 1970’s by Francois Duchene who put forward four arguments. First, the people of Europe had largely formed ‘amilitary’ values; second, the stalemate of the Cold War had ‘devalued purely military power’; third, Europe was far from a consensus on its own development as a military superpower between the two poles; and fourth, the then European Community ‘would have a chance to demonstrate the influence which can be wielded by a large political co-operative formed to exert essentially civilian forms of power’ (Duchene 1973: 19). ‘Civilian power’ has been defined as involving three key features: the centrality of economic power to achieve national goals; the primacy of diplomatic cooperation to solve international problems; and the willingness to use legally-binding supranational institutions to achieve international progress (Twitchett 1976: 1-2; Maull 1990). Specifically, Hans Maull defines a civilian power as a state ‘whose conception of its foreign policy role and behavior is bound to particular aims, values, principles, as well as forms of influence and instruments of power in the name of a civilization of international relations’(Maull 1990: 92-3). In other words, Maull sees civilian power as a specific type of actor, role and instrument. The notion of civilian power, therefore, describes a particular kind of actor, relationships and means. It was this notion of civilian power, which Bull criticized for its ineffectiveness and lack of self-sufficiency in military power. Bull suggested that the EC should become more self-sufficient in defense and security through seven steps: the provision of nuclear deterrent forces; the improvement of conventional forces; a greater role played by West Germany; more involvement on the part of France; a change of policy in Britain; careful co-existence with the Soviet Union; and careful co-existence with the United States. Bull’s solution was to turn the EC into a ‘military power Europe’ (Bull 1982: 152). The idea that civilian forms of power have become important instruments to deal effectively with threats to international peace and stability has been central to the post-Cold War security considerations. The debate regarding whether military

The EU as an International Actor: ‘Civilian’, ‘Normative’ or ‘Military’ Power?

43

power is still the key to international security has produced a general consensus that although it still plays an important role in ensuring international order, it is often ill-suited to solve the complex political and security problems the international community faces today (Everts and Schmitt 2004). It has been argued that international stability largely depends on the existence of socio-politically strong states (Buzan 1991; Holsti 1996) and, therefore, the key to international order is helping the transformation of weak states into strong ones. However, creating strong states and rebuilding war-torn societies is much more expensive and time-consuming than war fighting. More importantly, it requires a long political commitment by the members of the international community and the use of civilian forms of power. Moreover, it has been claimed that the more states rely on hard power and coercion, the less successful they are in deploying soft power and persuasion. However, it is recognized that soft power is not necessarily so soft (Mattern 2005). On 9 May 2000, to celebrate the 50th anniversary of the Schuman Declaration, the EU distributed publicity material declaring ‘50 Years of Solidarity, Prosperity and Peace’. Manners correctly points out that although the claim to being solely responsible for the achievement of peace is questionable, the message sent to the European public did reflect the fact that since the creation of the European Coal and Steel Community (ECSC), the EU has increasingly ‘domesticated’ relations between Member States (Manners 2002: 236; Manners and Whitman, 2000: 257). As Duchene suggested in the early 1970’s, Europe in the year 2000 represented a ‘civilian power’, which was ‘long on economic power and relatively short on armed force’. The status of the EU as a global civilian power was pronounced by Romano Prodi who stated that ‘We must aim to become a global civil power at the service of sustainable global development. After all, only by ensuring sustainable global development can Europe guarantee its own strategic security’ (Prodi 2000: 3). Since the defeat of the European Defense Community in 1954, the question of the EC assuming a military dimension had remained taboo until the Treaty on European Union (TEU) was signed in 1991. As Richard Whitman has suggested (1998: 135-6), ‘the TEU had signaled the intent of the Member States of the Union to move beyond a ‘civilian power Europe’ and to develop a defense dimension to the international identity of the Union’, shattering that taboo (Whitman 1998: 135-6). According to Manners, the move from the single structure of the EC to the three-pillar structure of the EU was part of a ‘fundamental shift from civilian to military power, assuming that the development of a common foreign and security policy was eventually to include defense policy’ (Manners 2002: 237). However, for the next seven years the expectations of foreign policy and military power were not matched by the hopedfor achievements of the EU. This disappointment, which Hill (1993) and Kennedy and Bouton (2002) felt was a ‘capabilities-expectation gap’, was grounded on unreal expectations which Sjursen (1998) termed an ‘eternal fantasy’. The trend towards ‘military power Europe’ is currently to be found in the common European Security and Defense Policy (ESDP) agreed upon at the June 1999 Cologne European Council which committed the EU to having a 60,000-person rapid reaction force (RRF) ready by the end of 2003 (Stivachtis 2004 and 2005). While the formal preparation for the Petersberg tasks of the RRF might be seen by some as evidence of movement towards a ‘military power Europe’ (Manners 2002:

44


237), others have argued that these tasks are still within the remit of a civilian power as the questions of defense and nuclear capability still remain the concern of NATO (Jorgensen 1997; Smith 2000). This militarization of the EU is not without criticism. For example, Zielonka (1998: 229) argues that it weakens the EU’s ‘distinct profile’ of having a civilian international identity, while Smith (2002: 27) suggests that the acquisition of military power ‘would represent the culmination of a ‘state-building’ project. Integration would recreate the state on a grander scale. Manners correctly points out that Bull’s discussion of the utility of military power, and Duchene’s notion of civilian power share more common assumptions than is normally thought (Manners 2002: 238). First, these shared understandings were part of the frozen nature of international relations during the Cold War period and included assumptions about the fixed nature of the nation-state, the importance of direct physical power, and the notion of national interest. As Manners suggests, although Duchene (1973: 20) was keen to ‘bring to international politics the sense of common responsibility and structures of contractual politics’ his focus, shared with Bull, was invariably the strengthening of international society not civil society (Manners 2002: 238). Thus both Duchene and Bull shared an interest in the maintenance of the status quo in international relations, which maintained the centrality of the Westphalian nationstate. Secondly, while Duchene (1973: 19) emphasized ‘civilian forms of influence and action’ and Bull stressed (1982: 151) nuclear deterrence and conventional forces, they both valued direct physical power in the form of actual empirical capabilities whether ‘long on economic power’ or a ‘need for military power’. Thirdly, though Duchene (1972: 43) wanted Europe to overcome ‘the age-old processes of war and indirect violence’ and Bull (1982: 157) wanted ‘the regeneration of Europe’, they both saw European interests as paramount. However, the Cold War, which structured many of these assumptions, ended with the internal collapse of regimes across Central and Eastern Europe whose ideology was perceived as unsustainable by its leadership and citizens. But these intra-state changes came about by the collapse of the norms associated with communism rather than the power of force. Thus, according to Manners, a better understanding of the EU’s role in world politics might be gained by reflecting on what those revolutions tell us about the power of ideas and norms rather than the power of empirical force – in other words the role of normative power (Manners 2002: 238). Europe as a ‘Normative Power’ In 1998, Richard Rosecrance argued that ‘Europe’s attainment is normative rather than empirical and that ‘it is perhaps a paradox to note that the continent which once ruled the world through the physical impositions of imperialism is now coming to set world standards in normative terms’ (Rosecrance 1998: 22). Adopting Rosecrance’s argument, Manners raised the question of how one can better understand the international role of the EU. He argues that by refocusing away from debate over either civilian or military power it is possible to think of the ideational impact of the EU’s international identity/role as representing normative power (Manners 2002:


45

238). By thinking beyond traditional conceptions of the EU’s international role and examining the case study of its international pursuit of the abolition of the death penalty, Manners sought to illustrate that the EU should be best conceived as a ‘normative power Europe’. Manners effort begins by briefly surveying the conceptual history of ‘civilian power’ and ‘military power Europe’ since the early 1980s in order to locate these traditional conceptions of the EU’s international role. He then introduces the idea of ‘normative power Europe’; he discusses the EU’s normative difference and normative basis; and explains how EU norms are diffused. He concludes that the concept of ‘normative power’ represents a valuable addition to one’s own understanding of the EU’s civilian and military power in world politics. Thus, for Manners, the notion of ‘normative power’ when applied to the EU is not a contradiction in terms, as the ability to define what passes for ‘normal’ in world politics is extremely rich. However, Diez correctly argues that the EU’s normative power is by no means a unique phenomenon (Diez 2005: 614). He suggests that the one case against which the idea of the EU as a normative power is most often developed, the US, has exemplified the concept of a normative power during significant parts of its history. Therefore, according to Diez, the historical fate of this normative power calls for a closer examination of different kinds of normative power. In this context, he calls for a greater degree of reflexivity, both in the academic discussion about normative power and in the political representations of the EU as a normative power, which he sees, as part of the same discourse. As Diez suggests, ‘rather than the zealous propagation of particular ‘European’ norms, it would be such a degree of reflexivity that would make ‘normative power Europe’ stand out’ (Diez 2005: 615). In so doing, Diez reviews the normative power argument and the debates surrounding it. He also examines the record of the EU as a normative power, which sets the scene for the development of his main argument: the construction of the EU as a normative power, its political effects, and the need for self-reflexivity in this debate. The idea of normative power in the international sphere is not new. For example, E.H Carr made the distinction between economic power, military power and power over opinion (Carr 1962: 108). Duchene was also interested in the normative power of the EC as an ‘idee force’, starting with the beliefs of the ‘founding fathers’ and extending through its appeal to widely differing political temperaments (Duchene 1973: 7). Elements of this normative power can also be found in the critical perspective of Johann Galtung who stated that ‘ideological power is the power of ideas’ (Galtung 1973: 33). Galtung argues that ideological power is ‘powerful because the powersender’s ideas penetrate and shape the will of the power-recipient’ through the media of culture’. He differentiated between channels of power (ideological power, remunerative power and punitive power) and sources of power (resource power and structural power) and claimed that this distinction is ‘fundamental, because it is on the latter that the European Community is particularly strong, even more so than the United States’ (Galtung 1973: 36). As Manners suggests, one of the problems with the notions of civilian and military power is their unhealthy concentration on how much like a state the EU looks (Manners 2002: 239). For Manners, the concept of normative power is an attempt to refocus analysis away from the empirical emphasis on the EU’s institutions

46


or policies, and towards including cognitive processes, with both substantive and symbolic components. As Smith has argued, ‘the normative dimension’ is important because ‘the debate about civilian power involves fundamental choices about the EU’s international identity’ (Smith 2000: 27). Thus the notion of a normative power Europe is located in a discussion of the ‘power over opinion’, ‘idee force’, or ‘ideological power’, and the desire to move beyond the debate over state-like features through an understanding of the EU’s international identity (Manners and Whitman 1998). In order to clarify these three different representations of the EU’s power in international relations, it is worth comparing civilian, military and normative power Europe. What Manners suggests is that conceptions of the EU as either a civilian power or a military power, both located in discussions of capabilities, need to be augmented with a focus on normative power of an ideational nature characterized by common principles and a willingness to disregard Westphalian conventions (Manners 2002: 239). This is not to say that the EU’s civilian power, or fledgling military power, are not important, but simply that its ability to shape conceptions of ‘normal’ in international relations needs to be given much greater attention. By identifying normative power by the impact it has on what is considered appropriate behavior by other actors’ and examining Manners’s treatment of the concept ‘as a power that is neither military nor purely economic, but one that works through ideas and opinions’ and as being able ‘to shape conceptions of the normal’, Diez argues that three aspects of this definition need further elaboration (Diez 2005). First, the ‘power’ in Manners’ work seems to be a particular kind of actor, similar to the way one may use the terms ‘great power’ or ‘superpower’ (Diez 2005: 614). Yet, for Diez, Manners introduces the notion of ‘normative power’ in part because he wants to get away from the question of whether the EU is an actor in international politics or not, which he thinks misses the point that the EU is influential, independent of its standing as an actor. Diez suggests that this discussion clarifies that normative power is not only a specific kind of actor in international politics, but that it also connotes the characteristic of a Weberian type of power relationship (as A being able to make B do what s/he would otherwise not have done). This relationship, according to Diez, takes on a ‘Lukesian twist in the form of a kind of hegemonic power’, namely the power to shape the values of others. In addition, normative power refers to particular ‘means’. In other words, it is not a power that relies on military force, but a power in which norms in themselves achieve what otherwise is done by military arsenals or economic incentives (Diez 2005: 614). Second, Diez argues that the normative power argument has a distinctly social constructivist ring to it for it focuses on the independent power of norms to influence actors’ behavior (Diez 2005: 615). As Diez puts it, to the extent that normative power is used as an analytical category to distinguish a particular kind of actor (such as Europe), it relies on the possibility to trace empirically the impact of norms in contrast to other possible factors. However, much of the discussion about ‘normative power Europe’ does not really examine the de facto impact of EU policy (and therefore whether it has normative power in the relational sense), but on whether it


47

acts as a normative power (and therefore whether it is a specific type of actor that employs particular means). Third, this does not mean that normative power cannot go alongside other forms of power in international relations, notably military and economic forms of power (Diez 2005: 615). Indeed, the latter two may underpin normative power, although normative power must not be reduced to economic or military power if it is to make sense as a separate category. For instance, research has shown that the EU is most likely to ‘shape conceptions of the normal’ (and therefore have greater normative power) in the context of EU membership candidacies, when the interest to join the EU can be assumed to be an important factor determining the impact of EU norms. Normative Power and Civilian Power Drawing upon Maull’s definion of civilian power as a state ‘whose conception of its foreign policy role and behavior is bound to particular aims, values, principles, as well as forms of influence and instruments of power in the name of a civilization of international relations’, Diez agrees that civilian power is indeed a specific type of actor, role and instrument and that the notion of civilian power therefore describes a particular kind of actor, relationships and means (Diez 2005: 616). However, he observes that similar to the concept of normative power, the notion of civilian power describes a particular kind of actor, relationships and means. The two concepts thus seem to be very close to each other. In a sense, civilian power can be read as one specific form of normative power in that at its heart lie particular kinds of norms (namely civilian). This reading is in contrast to the one offered by Manners, who treats the two concepts as distinct. Yet such a distinction between civilian and normative power seems to stem from a reductionist reading of civilian power, evident in Bull’s famous critique of the concept, which focuses on civilian – and in practice often economicmeans to exercise power. Duchene (1973: 14) also stressed economic means but, according to Diez (2005: 617), Maull’s definition goes beyond a focus on policy instruments. And even in Duchene’s original contributions, civilian power, just as Manners’ notion of normative power, has a ‘descriptive and prescriptive’ dimension; it can be read as referring ‘to means or ends’; and it is ‘about values’ and ‘process’ as (Nicolaidis and Howse 2002). The author of this chapter agrees with Diez’s position that civilian power is a particular type of normative power and believes that military power can also be a type of normative power. In other words, the EU’s identity as civilian or military power is not determined by the means available to it – economic, diplomatic and military – but by the way in which these means are to be used. For example, if the use of military force by the EU is based on a wide international consensus reflected especially in the authorization of the United Nations (UN) Security Council then there is no contradiction between normative and military power. The question, however, is how other states may perceive a ‘military power Europe’. For example, the US may perceive the militarization of the EU as an effort to challenge its power

48


and status in world politics, while other states may see it as an attempt of the EU to play a hegemonic role in global affairs. The European Union’s Normative Basis Manners’ empirical evidence that the EU is a normative power relies largely on the policies it pursues and his work has had a considerable impact on the study of European foreign policy. Specifically, investigating the EU’s normative basis, Manners argues that unlike what happened with historical empires and contemporary global powers, the EU’s normative difference comes from its historical context, hybrid polity and political-legal constitution (Manners 2002: 240). He suggests that the EU was created in a post-war historical environment, which reviled the nationalisms that had led to barbarous war and genocide. Because of this, the creation of Community institutions and policies took place in a context where Europeans were committed to ‘pooling their resources to preserve and strengthen peace and liberty’ [preamble to the Treaty establishing the European Communities (TEC)]. It has been argued that the EU has evolved into a hybrid of supranational and international forms of governance, which transcends Westphalian norms (King 1999: 313). Surveying the comparative history of polities and international systems from Mesopotamia to post-Westphalia, and from pre-international systems to a postmodern international system, Ferguson and Mansbach (1996) and Buzan and Little (2000) agree that the EU represents a new and different political form. For Ferguson and Mansbach, the EU is a cross-cutting polity which is part of ‘a strikingly different and more complex picture than traditional models of global politics allow, including less of a distinction between inside and outside the Westphalian state/polity’ (Ferguson and Mansbach 1996: 401). Similarly, for Buzan and Little the EU is ‘a new type of entity with actor quality’ which ‘is experimenting with a new form of both unit and subsystem structure’ (Buzan and Little 2000: 359). This particular new and different form of hybridity increasingly emphasizes certain ‘principles which are common to the member states’ [Treaty of the European Union (TEU), art. 6]. The proposed constitution of the EU as a political entity has largely occurred as an elite-driven, treaty-based, legal order. For this reason its constitutional norms represent crucial constitutive factors determining its international identity. The principles of democracy, rule of law, social justice and respect for human rights were first made explicit in the 1973 Copenhagen Declaration on European Identity, although the centrality of many of these norms was only constitutionalized in the TEU. As it has been suggested that ‘a strong commitment to human rights is one of the principal characteristics of the European Union’ (Alston and Weiler 1999: 6). This argument has received support from many scholars. For example, Von Bogdandy observes that ‘a most prominent piece of evidence is the European Council’s decision at its Cologne Summit was that a human rights charter should be drafted for the European Union’ because ‘protection of fundamental rights is a founding principle of the Union and an indispensable prerequisite for her legitimacy’ (Von Bogdandy 2000: 1307). Likewise, Lenaerts and de Smijter argue that ‘some thirty years before this decision, the Court of Justice had already confirmed that ‘fundamental human


49

rights [are] enshrined in the general principles of Community law and protected by the Court’ (Lenaerts and de Smijter 2001: 273). This combination of historical context, hybrid polity and legal constitution has, in the post-cold war period, accelerated a commitment to placing universal norms and principles at the centre of its relations with its Member States (Merlingen et al. 2001) and the world (Clapham 1999; Smith 2001). Manners argues that the EU has gone further towards making its external relations informed by, and conditional on, a catalogue of norms which come closer to those of the European Convention on Human Rights and Fundamental Freedoms (ECHR) and the Universal Declaration of Human rights (UDHR) than most other actors in world politics (Manners 2002: 241). As he rightly points out, the EU is founded on and has as its foreign and development policy objectives the consolidation of democracy, rule of law, and respect for human rights and fundamental freedoms (TEU, art. 6, art. 11, and TEC, art. 177). Furthermore it is committed to pursuing these norms in accordance with the ECHR (TEU, art. 6) and ‘the principles of the United Nations Charter’ (TEU, art. 11, preamble to TEC). Although one may be skeptical about the application and indivisibility of such core norms, one cannot overlook the extent to which the EU is normatively different from other polities with its commitment to individual rights and principles in accordance with the ECHR and the UN. However, there is one more normative difference. As Therborn suggests, ‘[W]ithout the backing of force and a willingness to use it, ‘Europe’ is unlikely to become a normative power, telling other parts of the world what political, economic and social institutions they should have’ (Therborn 1997: 380). Implicit in this approach is the assumption that normative power requires a willingness to use force in an instrumental way. Manners rejects this assumption and the instrumentality which accompanies it. In his formulation, the central component of ‘normative power Europe’ is that it exists as being different to pre-existing political forms, and that this particular difference pre-disposes it to act in a normative way. In order to illustrate this claim of normative difference further, one should explore the EU’s normative basis. The broad normative basis of the European Union has been developed over the past 50 years through a series of declarations, treaties, policies, criteria and conditions (Christiansen 1997; Weiler 1999; Laffan 2001). It is possible to identify five ‘core’ norms within this vast body of Union laws and policies which comprise the acquis communautaire and acquis politique. The first of these is the centrality of ‘peace’, found in key symbolic declarations such as that by Robert Schuman in 1950, as well as the preambles to the European Coal and Steel Treaty in 1951 and the Treaty of the European Community (TEC) of 1957. The second is the idea of ‘liberty’ found in the preambles of the TEC and the TEU of 1991, and in art. 6 of the TEU, which sets out four foundational principles of the Union. The third, fourth and fifth norms are democracy, the rule of law, and respect for human rights and fundamental freedoms, all of which are expressed in the preamble and founding principles of the TEU, the development co-operation policy of the Community (TEC art. 177), the common foreign and security provisions of the Union (TEC art. 11), and the membership criteria adopted at the Copenhagen European Council in 1993.

50


Manners argues that in addition to these core norms, it is also possible to suggest four ‘minor’ norms within the constitution and practices of the EU, although these are far more contested (Manners 2002: 243-44). The first minor norm is the notion of ‘social solidarity’ found throughout the acquis communautaire et politique of the EU, but in particular the preambles of the TEC and TEU, the objectives of Art. 2 (TEU) and Art. 2 (TEC), and the central focus of both the EC’s social policy and the Economic and Social Committee. The second minor norm is ‘anti-discrimination’ found in Art. 13 and Title Xl of the TEC, as well as the ‘protection of minorities’ found in the Copenhagen criteria. The third minor norm is that of ‘sustainable development’ enshrined in art. 2 (TEU), art. 2 (TEC) and the all-encompassing art. 6 (TEC). The fourth minor norm is the most recent and has yet to find any formal expression in treaty form, but is implicit in the Copenhagen criteria. This norm is the principle of ‘good governance’ as found in Romano Prodi’s inaugural speech to the European Parliament (Prodi 2000), as well as Commission papers on ‘EU election assistance and observation’ (COM(2000) 191 final) and the ‘White Paper on European Governance’ (cited in Manners 2002: 242). According to Manners, these norms clearly have a historical context to them. For example, ‘peace’ and ‘liberty’ were defining features of western European politics in the immediate postwar period (Manners 2002: 243). The norms of democracy, rule of law and human rights grew later when it was important to distinguish democratic Western Europe from communist Eastern Europe. These then became defining features of transition from communist rule in the immediate post-Cold War period as the Copenhagen criteria demonstrate. The norm of the aspiration to social solidarity became an important counter-measure to the drive for liberalization in the Single European Act (SEA) and economic and monetary union. The desire for antidiscrimination measures also arose from progressive social legislation and the concerns regarding racism and persecution of minorities in the early 1990s. The norm of ‘sustainable development’ became important following the Rio Earth Summit when it was included in the Treaty of Amsterdam. Finally the norm of ‘good governance’ became vital first, following the resignation of the Commission in 1999; second, due to the concern for double standards in pursuing the EU’s demands for democratic reforms in the Central and Eastern European countries; and third, because of the recognition of the role of governance in successful aid programs. The reinforcement and expansion of the norms identified by Manners allows the EU to present and legitimize itself as being more than the sum of its parts. In the post-Cold War era, it is no longer enough for the EU to present itself as merely a form of economic government for the management of global economics, as the increasing resistance by its citizens to economic liberalization suggests. This desire for greater legitimacy through the fundamental norms that the EU represents has most recently found an expression in the charter of fundamental rights of the European Union adopted at the Nice European Council in December 2000. The charter restates and re-emphasizes the core and minor norms, except ‘good governance’, with the aim of ensuring that basic political and social rights become more widely known to the EU citizenship, although ‘the charter does not establish any new power or task’ (Art. 49) and will not form part of the EC/EU treaty base in the immediate future.


51

Diez argues that in Manners’s work there is an ‘ontological’, ‘positivist’ and ‘normative’ element and that all three elements fit into a larger ongoing debate in which first, the EU has been conceptualized as a different type of actor in world politics; second, specific EU policies have been considered to be different from those of other superpowers; and third, it has been argued that the EU should indeed be a different kind of power (Diez 2005: 619). A central contribution to this debate has been Robert Kagan’s Of Paradise and Power, in which the author juxtaposes what he sees as the Hobbesian-realist, military power of the United States against the Kantian idealist avoidance of military means rooted in pacifist values prevailing in Europe. Specifically, Kagan argues that, in effect, America and Europe live in two different worlds. For Kagan, the hallmark of the EU as ‘nonpower’ would be the orientation of its external policies on its ‘inner characteristics … primarily: civilian ends and means, and a built-in sense of collective action, which in turn expresses, however imperfectly, social values of equality, justice and tolerance’ (Kagan 2004: 2-6). Yet in contrast to Manners, for Kagan, Europe’s pacifism is not so much a result of choice as, at least in parts, necessity: it does not have the military means and resources to become a military power, so it sticks to non-military forms of influence. As Diez claims, the discursive construction of the EU as a normative power is not found in isolated statements only. This normative discourse is one that most EU politicians – in Council, Commission and Parliament as well as on the member state level – engage in unless they are committed Eurosceptics. As Diez puts it, ‘there may well be disagreement about the development of the EU’s military capacities between Council and Commission, and between different member states and different directorate-generals, yet the representation of Europe as a force for peace and well-being is nearly consensual’ (Diez 2005: 619). Diez concludes by stating that it is perhaps because of this already-existing construction that Kagan’s book became such a widespread reference point in the debate. Criticizing the idea that normative power is only related to the EU, Diez shows through a historical comparison with the U.S. that the notion of normative power is hardly novel and unique to the EU. For Diez, the question is not whether or not a state is a civilian power, but to what degree it is one. Thus one would expect to find instantiations of civilian/normative power in many places and historical contexts. These will differ in the extent to which the spread of universal norms plays a role as a means of power projection, but also in how far military power dominates other forms of power. Diez correctly points out that normative power is not the opposite of military power (Diez 2005: 620). It is entirely conceivable that military force is used to back up the spread of civilian values, partly because the application of civilian means would imply the pre-existing institutionalization of civilian values in order to be effective. This argument has received the support of Helene Sjursen (2004: 122). Yet the more normative power builds on military force, the less it becomes distinguishable from traditional forms of power, because it no longer relies on the power of norms itself. Indeed, the imposition of norms through military force cannot be equated with successfully changing others, which relies primarily on socialization processes.

52


In this context, the U.S. is a particularly interesting case. According to Diez (2005: 621), it is necessary to consider the long-established assessment of US foreign policy as strongly influenced by the frontier-myth, resulting in the ‘Godgiven duty to spread the dream and promise of America beyond its own shores’; a predisposition that, as Michael Cox notes, ‘inevitably infused American foreign policy with a particularly moralistic and idealistic tone’ (Cox 2003: 8). Apart of the era of Monroe doctrine, most of the U.S.’s international engagement has had strong normative character. The US’s normative power was very visible during Woodrow Wilson’s years with his Fourteen Points serving as a cornerstone. Also after World War II, when one could already see the dominance of military power and American hegemony in play (primarily in the Western world), the US helped create a series of international institutions that would civilize international politics. Diez rightly points out that even the invasion of Iraq, driven by a neoconservative ideology, cannot easily be dismissed as mere power politics as it is driven by a particular worldview with strong ideas of how democracy should work within a particular liberal governmental frame (Diez 2005: 622). As Felix Berenskoetter shows, in the 2002 National Security Strategy the invocation of norms and the commitment to spreading those norms, which are held to be universal, played a central role (Berenskoetter 2005: 75). Yet, interests and norms cannot easily be separated (Cox 2003: 9). Building up institutions after the World War II was a projection of American norms, but it also (intentionally or not) safeguarded US interests. This was not necessarily because of some sort of conspiracy, but because those norms would spread a conception of life that would match that of the US and build a ‘community of ideals, interests and purposes’ (Diez 2005: 622). Diez, however, identifies one important difference between the EU and the US, namely that the US has sought to project, and often impose, its own norms while (unlike the EU) refusing to bind itself to international treaties (Diez 2005: 622). Manners highlights the EU’s formal commitment to international law in this respect, but on the basis of the general definition of normative power, this can only be the characteristic of a particular kind of normative power (Manners 2002: 241). For Diez, the difference between the US and the EU in this respect should be understood not as a distinction between a normative and a traditional military power, but rather as a warning sign about a normative power in which military power is becoming increasingly important. Indeed, during the first part of the twentieth century the US, like today’s EU, was not at all eager to intervene in conflicts outside its own hemisphere. Like the EU, President Wilson’s aim was to spread peace throughout the world so that interventions would no longer be necessary (Williams 1962). And just like the EU, the idea was to do so not with military means, but with binding normative commitments. Yet over time, the military back up of this normative power came to be of ever-increasing importance. And even though the US’s reluctance to entertain imperial ambitions should not be overestimated, this supplementation of norms with force was not solely due to imperial ambitions on the part of the United States. It was partly as a response to European and international calls for engagement from outside the United States. Currently, the EU is facing similar calls both for acquiring more military power and for using military force to achieve certain goals.


53

In the case of the US, the entanglement of normative and military power is underpinned, most evidently in the George W. Bush Administration, by a secure belief in the universal validity of its own norms and a missionary zeal to spread these norms to places marked as ‘evil’. It is such an unreflective normative stance, according to Diez, that legitimizes the use of military force: were there doubts about the underlying norms, military force would not be considered legitimate. This indicates another dimension along which normative powers can be differentiated, and it is one that Diez further explores in his work, namely the degree to which norms are subject to reflection both inside the EU and (in the way that the EU binds itself to international norms) in the context of the international society. ‘Military’ versus ‘Normative Power Europe’ A large part of the discussion about the EU as a civilian and normative power has focused on whether or not those terms adequately describe the EU’s international behavior. Helene Sjursen, for instance, maintains that the trend towards greater institutionalization of international security and the stronger concern for the individual rather than the state as a referent of security is more deeply embedded in Europe than elsewhere (Sjursen 2004: 122). However, not everyone agrees. As far as the focus on civilian means is concerned, the problem stems largely from the fact that the EU has increasingly included military means in its foreign policy machinery (Hill 2004). This is most obvious in the development of the European Security and Defense Policy (ESDP) as part of the EU’s Common Foreign and Security Policy (CFSP) pillar, including the Rapid Reaction Force (RRF) and various political and military committees to govern military efforts on the EU level. In Kagan’s view, the civilian power of Europe largely depends on, and in many instances follows from the military conditions provided by the US – what is often characterized as ‘the US makes the dinner and the EU does the dishes’ (Mason 2003: 256). Robert Cooper has argued that the EU is much more aggressive when it comes to its external relations (Cooper 2000). To Cooper, Europe (with the EU at its core, but not restricted to it) is the prime example of the ‘postmodern world’. As he puts it, the EU’s task is to ‘preserve and extend this post-modern security order and to promote its underlying values, never forgetting that more security can be achieved by cooperation than by competition’ (Cooper 2000: 23). However, Cooper is not at all interested in a complacent pacifism. Instead, he sees it as one of the greatest dangers to the postmodern world. In Cooper’s vision, military force is a necessary part of Europe as long as there are remnants of the ‘modern’ and ‘pre-modern’ outside the sphere of the ‘postmodern’. He warns that ‘when we are operating in the jungle, we also must use the laws of the jungle’. No surprise, then, when he argues that ‘those who speak of Europe, as a ‘civilian power’ do so under the illusion that this could have been done without military power’. Yet the case of the US illustrates the danger of such logic. While normative power and military power are not incompatible, they can be in a serious tension and therefore this fact should not be ignored in the development of ESDP.

54


Another criticism of the EU as a normative power concerns its consistency, both in terms of not discriminating between different external actors, and not undermining norms from inside (Diez 2005: 624). Thus, there have been charges of bias and arbitrariness related to the EU’s application of human rights. Also, since 9/11, the EU and its member states have taken part in the drive towards the securitization of migration, although perhaps less so than the US. One version of this argument is that EU insistence on norms embodies strategic or economic interests. In the strong version of the argument, those interests are cloaked in a mantle of values and norms rhetoric. In a weaker, more sophisticated version, Richard Youngs argues that normative concerns and strategic interests always go together in the EU’s external relations, and that one therefore needs a combination of rationalist and constructivist approaches in order to assess the respective impact of both factors (Youngs 2004: 224). Youngs claims that interests were manifested for instance in the political choices of supporting Yassir Arafat’s Administration rather than channeling funds towards NGOs critical of the Middle East peace process, and in the support granted to Boris Yeltsin in the name of stability in post-Soviet Russia. He further notes that human rights policy has often been instrumental, citing as examples funding that went to pro-Western NGOs rather than Islamist ones and (with respect to decision-making processes) that foreign ministries have ‘syphoned off’ human rights funds to direct them towards politically motivated projects (Youngs 2004: 225). Yet, in order to make judgements about which factor is at play, any such criticism is based on the presupposition of a clear-cut distinction between norms and interests. Such a distinction, however, is determined by ontological assumptions and, indeed political choice, rather than empirical observation. This problem has haunted similar attempts to distinguish empirically between different logics of action, in particular strategic and argumentative behavior. For example, according to Diez, Youngs discounts an interest in stability as a matter of strategic choice when it can easily be seen as a norm competing with human rights (Diez 2005: 625). Similarly, he sees the support of like-minded NGOs as an instance of instrumentality, although the entire logic of a normative power is about the spread of ‘particular’ norms and values. The point is not that normative power is not strategic, but, as Diez suggests, that strategic interests and norms cannot be easily distinguished, and that the assumption of a normative sphere without interests is in itself nonsensical. The criticism of normative power as being driven, at least in part, by strategic interests, therefore runs into self-contradictions if it is presented as an objective analysis rather than a political intervention. Youngs in the end seems to affirm rather than effectively undermine the concept of normative power Europe. He agrees that ‘EU approaches certainly look rather less instrumental than the new … US human rights initiatives’. Diez concludes that Youngs’ criticism that the EU seeks to impose ‘European values’, is not in itself a contradiction, but rather a confirmation, of the EU as a normative power (Diez 2005: 626).


55

Conclusion From the preceded analysis, it becomes apparent that normative, civilian and military powers are not necessarily incompatible. In fact, both civilian and military power can be seen as different forms of normative power. The real question is under which conditions EU military power is to be used for if there is a gap between international norms regarding the use of force and the actual use of force by the EU then the ‘normative power Europe’ which gradually gives its place to ‘military power Europe’. It is widely acknowledged that in today’s complex world, both military and civilian forms of power are central in achieving international peace and security. Therefore, there is little danger that the EU would not lose its character as a normative or civilian power by developing its military capabilities, providing that it remains committed to international law and strictly observes international norms regarding the application of employment of military force. It is rather the reasons for which the EU seeks to develop its military capabilities that may affect the perception of other states for neither the U.S. wishes to see its power and status in world affairs challenged by the EU nor would other states see any real difference by the replacement of one hegemon (US) by another (EU). One could argue that the worse case scenario for international order could be if the US and the EU would begin challenging one another for dominance in international politics. The post-World War II international order was to a great extent dependent on transatlantic cooperation while in the post-Cold War era collaboration between the US and the EU is seen as essential for international peace and stability. Little wonder, therefore, why many have argued that it is the nature of the transatlantic partnership which may, to a considerable degree, determine the future character of international order. Moreover, the increasing of EU military capabilities for the purpose of becoming a hegemonic power without a clear commitment to international law and international norms could also have significant implications for international order since other great powers, like China and Russia, would be obliged to devise policies and strategies to deal with the emerging hegemon and its interests. In addition, the militarization of the EU and its potential deeper involvement in world affairs through interventionist policies would attract the negative reaction of the international public opinion and the menace of terrorist groups. References Alston, P. and Weiler, J. (1999). ‘An “Ever Closer Union” in Need of a Human Rights Policy: The European Union and Human Rights’. In P. Alston (ed.), The EU and Human Rights. Oxford: Oxford University Press. Bull, Hedley (1982). ‘Civilian Power Europe: A Contradiction in Terms?’. Journal of Common Market Studies, 21(2), pp. 149-64. Buzan, Barry and Richard Little (2000). International Systems in World History. New York: Columbia University Press.

56


Buzan, Barry (1991). People, States and Fear, 2nd edition. London: Harvester Wheatsheaf. Carr, E.H. (1962). The Twenty Years’ Crisis 1919-1939, 2nd edition. London: Macmillan. Christiansen, T. (1997). ‘Legitimacy Dilemmas in Supranational Governance’. In N. Nentwich and A. Weale (eds.), Political Theory and the European Union. London: Routledge. Clapham, A. (1999). ‘Where is the EU’s Human Rights Common Foreign Policy, and How Is It Manifested in Multilateral Fora?’ in P. Alston (ed.), The EU and Human Rights. Oxford: Oxford University Press. Cox, Michael (2003). ‘The Empire’s Back in Town’. Millennium: Journal of International Studies, 32(1). Den Boer, Monica and Monar Jorg (2002). ‘Keynote Article: 11 September and the Challenge of Global Terrorism to the EU as a Security Actor’. Journal of Common Market Studies, 40, pp. 11-28. Duchene, Francois (1972). ‘The European Community and the Uncertainties of Interdependence’. In M. Kohnstamm and W. Hager (eds.), A Nation Writ Large? Foreign Policy Problems before the European Community. Basingstoke: Macmillan. Duchene, Francois (1972). ‘Europe’s Role in World Peace’. In R. Mayne (ed.), Europe Tomorrow. London: Fontana. Everts, Steven and Garry Schmitt (2004). ‘Is Military Power Still the Key to International Security?’ In For and Against: Debating Euro-Atlantic Security Options. Brussels: NATO. Ferguson, Yale and Richard Mansbach (1996). Politics: Authority, Identities and Change. Columbia: University of North Carolina Press. Galtung, Johann (1973). The European Community: A Superpower in the Making. London; Allen & Unwin. Haine, Jean-Yves (2004). ‘Idealism and Power: The New EU Security Strategy’, Current History, 103(671), March 2004, pp. 107-12. Hill, Christopher (2004). ‘Renationalizing or Regrouping? EU Foreign Policy ?Since 11 September 2001’. Journal of Common Market Studies, 42(1). Hill, Christopher (1993). ‘The Capabiliity-Expectations Gap, or Conceptualizing Europe’s International Role’. Journal of Common Market Studies 31(3), pp. 30528). Holsti, Kalevi (1996). The State, War, and the State of War. Cambridge: Cambridge University Press. Howorth, Jolyon (2001). ‘European Defense and the Changing Politics of the European Union: Hanging Together or Hanging Separately?’, Journal of Common Market Studies, 39(4), pp. 765-89. Jorgensen, K.E. (1997). ‘Western Europe and the Petersberg Tasks’. In K.E. Jorgensen (ed.), European Approaches to Crisis Management. The Hague: Kluwer Law International, pp. 131-52. Kagan, Robert (2003). Of Paradise and Power: America and Europe in the New World Order. New York: Knopf.


57

King, T. (1999). ‘Human Rights in European Foreign Policy’. European Journal of International Law, 19(2), pp. 313-37. Laffan, B. (2001). ‘The European Union Polity: A Union of Regulative, Normative and Cognitive Pillars’. Journal of European Public Policy, 8(5), pp. 709-27. Lenaerts, K. and de Smitjer, E. (2001). ‘A ‘Bill of Rights’ for the European Union’. Common Market Law Review, 38(2), pp. 273-300. Manners, Ian (2002). ‘Normative Power Europe: A Contradiction in Terms?’. Journal of Common Market Studies, 40(2), pp. 235-58. Manners, Ian (2000). Substance and Symbolism: An Anatomy of Cooperation in the New Europe. Aldershot: Ashgate. Manners, Ian and Richard Whitman (1998). ‘Towards Identifying the International Identity of the European Union’. Journal of European Integration, 21(2), pp. 23149. Manners, Ian and Richard Whitman (eds.) (2000). The Foreign Policies of the European Union Member States. Manchester: Manchester University Press. Maull, Hans (1990). ‘Germany and Japan: The New Civilian Powers’. Foreign Affairs, 69(5), pp. 91-106. Merlingen, M., C. Mudde and U. Sedelmeier (2001). ‘The Right and the Righteous? European Norms, Domestic Politics and Sanctions against Austria. Journal of Common Market Studies, 39(1), pp. 59-77. Mattern, Janice Bially (2005). ‘Why “Soft Power” Isn’t So Soft’. Millennium: Journal of International Studies, 33(3), pp. 583-612. Nicolaides, Kalypso and Robert Howse (2002). ‘This is my EUtopia: Narrative as Power. Journal of Common Market Studies, 40(4). Prodi, Romano (2000). ‘2000-2005: Shaping the New Europe’. Speech to the European Parliament, Strasburg, 15 February. Rosecrance, Richard (1998). ‘The European Union: A New Type of International Actor’. In J. Zieloka (ed.), Paradoxes of European Foreign Policy. The Hague: Kluwer Law International, pp. 15-23. Sjursen, Helene (2004). ‘Changes to European Security in a Communicative Perspective’. Cooperation and Conflict, 39(2). Sjursen, Helene (1998). ‘Missed Opportunity or Eternal Fantasy?: The Idea of a European Security and Defense Policy’. In J. Peterson and H. Sjursen (eds.)., A Common foreign Policy for Europe? Competing Visions of the CFSP. London: Routledge. Smith, K. (2001). ‘The European Union, Human Rights and Relations with Third Countries: Foreign Policy with an Ethical Dimension’. In K. Smith and M. Light (eds.), Ethics and Foreign Policy. Cambridge: Cambridge University Press. Smith, K. (2000). ‘The End of Civilian Power EU: A Welcome Demise or Cause for Concern?’. International Spectator, 23(2), pp. 11-28. Stivachtis, A. Yannis (2005). ‘The European Defense and Security Policy: Evolution and Challenges’. In Yannis A. Stivachtis (ed.), Global Governance and International Security. Athens: ATINER. Stivachtis, A. Yannis (2004). ‘Common Foreign and Security Policy (CFSP) and European Security and Defense Policy (ESDP) After Iraq’. In Yannis A. Stivachtis (ed.), Current Issues in European Integration. Athens: ATINER.

58


Therborn, G. (1977). ‘Europe in the Twentieth-First Century’. In P. Gowan and P. Anderson (eds.), The Question of Europe. London: Verso. Twitchett, K. (ed.) (1976). Europe and the World; The External Relations of the European Market. New York: St. Martin’s Press. Von Bogdandy, A. (2000). ‘The European Union as a Human Rights organization? Human rights and the Core of the European Union’. Common Market Law Review, 37, pp. 1307-38. Weiler, J. (1999). The Constitution of Europe. Cambridge: Cambridge University Press. Whitman, Richard (1998). From Civilian to Superpower? The International Identity of the European Union. Basingstoke: Macmillan. Williams, Appleman William (1962). The Tragedy of American Diplomacy. New York: Delta. Youngs, Richard (2004). ‘Normative Dynamics and Strategic Interests in the EU’s External Identity’. Journal of Common Market Studies, 4292). Zieloka, J. (1998). Explaining Euro-paralysis: Why Europe is Unable to Act in International Politics: Basingstoke: Macmillan.

Chapter 4

Presidency as Leadership? Assessing the EU Presidency through the 2005 UK EU Presidency Richard G. Whitman and Gareth Thomas

Presidencies play an important role in the EU and a dysfunctional Presidency has a significant impact on its effectiveness. Although the member state holding the sixmonth rotating Presidency has few formal powers with which to directly influence the agenda, it is the conductor of the EU’s business and plays a key role in advancing the EU policy agenda during its term of office. The formal responsibilities of the EU Presidency are to act as chair for Heads of State and Government, ministerial and other committee and working group meetings, to represent the Council of Ministers to the European Parliament and the European Commission and to act as EU representative vis-à-vis third countries and within international organizations. Consequently the Presidency is essentially a cheerleader for a well-established programme, rather than a powerful executive position. The EU’s founding Treaties have little to say in defining the role of the Presidency. The Treaty of Rome articles 203-204 and the Treaty on European Union article 48 detail the anticipated role for the Presidency.1 More detailed guidance is provided by 1 Article 203 The Council shall consist of a representative of each Member State at ministerial level, authorised to commit the government of that Member State. The office of President shall be held in turn by each Member State in the Council for a term of six months in the order decided by the Council acting unanimously. Article 204 The Council shall meet when convened by its President on his own initiative or at the request of one of its Members or of the Commission. Treaty on European Union Article 48 The government of any Member State or the Commission may submit to the Council proposals for the amendment of the Treaties on which the Union is founded. If the Council, after consulting the European Parliament and, where appropriate, the Commission, delivers an opinion in favour of calling a conference of representatives of the governments of the Member States, the conference shall be convened by the President of the Council for the purpose of determining by common accord the amendments to be made to those Treaties. The European Central Bank shall also be consulted in the case of institutional changes in the monetary area.

60


for Presidencies by the Council secretariat handbook. The formal responsibilities of the Presidency are chairing European Council, Council of Ministers meetings and working groups; representing the Council before the Commission and the European Parliament; – requires a good working relationship with both these institutions and the Council Secretariat; and acting as the EU representative vis-à-vis third states and international organizations.2 There is a broad consensus among academic analysts of EU Presidencies that any presidency faces a number of constraints: A logistical constraint. The burden of European Council, formal and informal Ministerial meetings and working group meetings is significant. Add to this all the EU-third party summits and political dialogue commitments and it is a significant burden to address. A Limited agenda setting capability constraint. A Presidency – works within the Multiannual Strategic Plan of the Council covering 2004-2006 covering six Presidencies (the Irish, Netherlands, Luxembourg, UK, Austria, Finland) and the UK is also working within the Operational Programme for 2005 which is a joint Luxembourg-UK Presidency Programme. The Intrusion of unexpected events constraint. Second Semester Presidencies additionally face a time constraint as a (short) Presidency – second semester means the loss of the month of August for business. The academic literature providing the basis to evaluate Presidencies is somewhat thin. Bjurulf, Elgström, Tallberg (1999) divide the existing literature into three main three major categories: First, there are a limited number of studies that are directly devoted to the Presidency (Edwards and Wallace 1977; de Bassompierre 1988; Kirchner 1992; Svensson 2003). Second, there are chapters on the Presidency in books describing and analyzing the Council of Ministers (Westlake 2000; Hayes-Renshaw and Wallace 1997; Sherrington 2000). And third, there is a rather voluminous body of articles and conference reports on the experiences of particular holders of the Presidency (e.g., Kirchner and Tsagkari 1993, Ludlow 1998, Luther and Ogilvie 1998). As they note the characteristic of all this literature is its mainly descriptive focus. The empirical literature is typically void of broader, comparative analyses, with the exception of Kirchner (1992) and Wurzel (1996). In general, the literature puts relatively large emphasis on assessing, in empirical terms, the degree of influence and the effectiveness of individual Presidencies and of the institution as such. The possible differences between larger and smaller member states are noted, but no thorough analysis has been carried out. A strong point of the existing literature is, however, its clarification of the various functions of the Presidency. There seems to be relatively broad agreement that the main tasks include (1) management and administration, (2) mediation, (3) leadership, (4) contact point within the EU, (5) external representation and (6) promoter of national interests (see Wallace 1985; Kirchner 1992; Pijpers 1992; Schout 1998; Svensson 1998). This points to the important distinction between managerial tasks and agenda-setting powers. The amendments shall enter into force after being ratified by all the Member States in accordance with their respective constitutional requirements. 2 See Kirchner (1992), Sherrington (2000), Elgstrom (2003) as illustrative for the consistency in the roles played by the Presidency across time.

Presidency as Leadership?

61

I would add a fourth category, the systematic comparative that for shorthand, I will call the Lund School. This encompasses the work of scholars based at the University of Lund in Sweden. What the Lund School does is to take the existing literature on roles and apply this to the Presidency – on in their own words take what is ‘Implicit in existing, empirical accounts of the Presidency is the notion that member states take on different roles when they assume the office of the Presidency.’ Two of the most interesting pieces of work to come out of the Lund School have been the comparative work led by Elgstom and the work on the Presidency as a negotiations broker. The work of Tallberg is extremely interesting in examining the power that the Presidency has in brokering negotiations. The Presidency in Action: The UK 2005 EU Presidency The UK Presidency commenced on 1 July against the backdrop of ‘no’ votes in France and the Netherlands on the EU Constitutional Treaty and an acrimonious summit under the Luxembourg Presidency in mid-June, which failed to reach a deal on the EU budget. For many commentators the EU was in deep crisis. The Commission President had publicly stated that this Presidency would be evaluated primarily on its ability to reach an agreement on the future financing of the EU by the end of its tenure. The issue was unresolved as the Council meeting opened and the success or failure of the Presidency seemed to hang in the balance. Almost six months earlier, in an inspirational speech to the European Parliament on 23 June, Prime Minister Tony Blair had performed a remarkable exercise in (briefly) boosting morale and raising expectations that the UK was to initiate a far-reaching debate on the future of European integration. That the speech, which was universally praised across Europe, had not been systematically followed up by the UK Government was a source of disappointment for other EU member state governments. A number of commentators disparaged the UK’s EU Presidency for failing to address the fundamental disagreements at the heart of the European project. The successful conclusion of budget negotiations would prove yet another stopgap measure delaying much needed reform of the budgetary system. A more detailed examination of the UK EU Presidency showed that the UK actually fulfilled a substantial part of its intended programme. Regrettably for the UK Government, the EU budget issue overshadowed other achievements. The paradox was that reaching an agreement on the EU financing arrangements for 2007–13 was not on the UK Presidency’s original agenda; rather, it was unfinished business inherited from the preceding Luxembourg Presidency. In fact, controversies experienced by the Presiding member state often highlight a deeper failure of institutional design, exposing the Presidency’s impotency, rather than a failure by a member state to fulfil the terms of office. Effective Presidencies resolve differences between member states and broker deals to resolve disagreements. As successful EU Presidencies seek to be a part of a solution to problems rather than at the centre of the EU’s disputes, it was unfortunate for the UK to have found itself so central to disagreement on the EU’s future finances.


62

For many EU member states the UK was part of the problem, rather than part of the solution, in reaching an agreement on the EU budget. A more general evaluation of the effectiveness of the UK Presidency is not an easy task. The Economist recently suggested that it is not even particularly useful, declaring that ‘one of the more pointless Brussels parlour games is to tot up the achievements of whichever country holds the Presidency.’3 However, it is possible to assess the UK Presidency’s achievements on the basis of the programme of work that it set for itself in advance of the Presidency. The work programme for the UK’s six-month Presidency was a part of the Multiannual Strategic Programme for the period 2004–6, designed for the Irish, Dutch, Luxembourg, UK, Austrian and Finnish Presidencies. Multi-annual Presidency work programmes are agreed because, at best, a Presidency can only start, move forward or conclude the EU’s agenda. Six months is too short a period in office to see policy or legislation fully devised or implemented. A more detailed Operational Programme of the Council for 2005, which fleshed out the timetable for implementing this strategy, is submitted jointly by both member states holding the Presidency in any given year. In this case, the operational programme was submitted by Luxembourg and the UK. Importantly, the member state at the helm also faces the challenge of managing the EU’s response to external events and unexpected developments within the EU. The UK was faced with both the domestic challenge of the London bombings on 7 July and the German general election in September, with the subsequent prolonged process ensuring that Germany was preoccupied with building a coalition government. The UK Government was also in the unusual position of holding the G-8 Presidency alongside its EU Presidency (its sixth EU Presidency, and its second under the Blair Government). There was, however, little real linkage between these two Presidencies because of the very different nature of the decision-making processes in the two organizations. The G-8 Presidency provided an opportunity to focus on the big themes of Third World poverty and climate change, and to work for progress in these key areas with some of the most internationally significant states. The EU Presidency was much less glamorous; it required working in a much more circumscribed manner in a more complicated set of institutional arrangements and with more limited objectives. The UK has tended to treat the G-8 Presidency as something to be celebrated, and the EU Presidency as something to be endured. Progress Under the UK Presidency It is important to distinguish between a good Presidency for the EU and a good Presidency for the government of the member state holding the Presidency. These factors are not always mutually exclusive, but they rarely run parallel. Other EU member state governments judged the UK on whether it had the capacity to reach a deal on the EU budget. The British Government seemed to measure its success on this issue by its ability to reach a settlement that preserved the UK EU budget rebate to a degree that minimized domestic political difficulties. The UK Government 3

Charlemagne, ‘Isolation forever’, The Economist, 3 December 2005, p. 48.


63

would originally have been facing a referendum on the EU Constitutional Treaty in spring 2006 and the EU Presidency would have provided a platform to prepare the electorate for the referendum. The government’s decision to suspend the UK’s ratification process, and the subsequent agreement of EU governments to defer discussions on the EU constitutional treaty with a ‘period of reflection’ until 2006, defused to a degree the domestic pressure on the Presidency agenda. However, the UK Government has failed to capitalize on the Prime Minister’s speech to the European Parliament on 23 June calling for the EU to examine how it could engage the interests and enthusiasms of its citizens. Other EU governments expected the UK Government to follow up with a plan for a programme of action and in not doing so the Presidency failed to capitalize on an opportunity to influence the structure of the debate. This was a significant failure. The UK Presidency has, however, generally been a success in handling its role in chairing the ministerial, committee and working group meetings of the EU. This role represents a significant logistical and organizational challenge for the Presidency and there was no criticism of the UK’s handling of this burden or its role in acting as the EU’s representative in dialogue and summits with third countries. An exception to this efficient operation related to the logistics for the informal foreign ministers’s meeting held in the UK in September. These provoked complaints and resulted in an apology from the Presidency. Complaints of a different nature were directed towards the UK Presidency with regard to the agenda for the informal summit of Heads of State and Government at Hampton Court on 27 October. As the Slovakian Prime Minister, Mikulas Dzurinda, complained in advance of the summit: ‘Silence reigns. We do not have information. We lack information, especially from the presiding country.’ The Presidency’s efforts to extend the olive branch to the French Government by supporting the global adjustment initiative at the Hampton Court summit were shot down by clear signals that the new German Government was unwilling to bankroll any new initiative when savings needed to be made elsewhere in the budget.4 Although the UK Presidency successfully delivered Turkish accession and a budget deal, the manner in which they have been achieved will do little to warm the relationship between the UK and the rest of the EU in 2006. For many new member states the Hampton Court meeting was an exercise in Presidential filibustering, with the UK playing for time on the budget issue that other member states felt was of the most pressing concern. There was, however, an important new initiative at the summit with Prime Minister Blair calling for an EU energy security policy. The successful development of such a policy will fall to future EU Presidencies. The UK Presidency has managed to maintain a united EU front in terms of foreign policy. There have been significant foreign policy challenges during its term of office and these have been handled in a manner that has led to divisions between the EU member states. These include difficulties confronting EU nuclear diplomacy with Iran since the election of President Mahmoud Ahmadinejad, maintaining good relations with China while negotiating the voluntary export restraints to limit the impact of Chinese textile and shoe imports; the earthquake in Pakistan; and responding 4

Financial Times, 28 October 2005.

64


to a growing fear of a flu pandemic created by the spread of HN51. Furthermore, renewed complications in the relationship with the US following allegations of CIA interrogation centres on European soil were effectively handled: a collective EU request to the US Government for clarification was a successful exercise in forging a common response. The UK Government set out its own expectations for its Presidency in its White Paper of 23 June 2005, Priorities for the UK Presidency of the Council. This organized the UK’s aspirations under three headings: economic reform and social justice, security and stability, and Europe’s role in the world. A final paragraph pledges to ‘take forward the discussions on future financing’. A second White Paper Prospects for the EU in 2005: The UK Presidency of the European Union, published on 30 June 2005, confirmed these priorities. The success of the Presidency will be assessed under each of these headings. The appendix to this paper details objectives set by the Presidency and offers a colour-coded analysis of the extent to which the Presidency has achieved its objectives. Economic Reform and Social Justice In conjunction with the Barroso-led European Commission, the UK wanted to place an emphasis on resurrecting the Lisbon Agenda during its Presidency. A key litmus test of this achievement would be progress made in the field of Better Regulation, particularly planned reforms of chemical regulation (REACH), as well as development of the Financial Services Action Plan and the Services Directive. On Better Regulation on 25 October 2005, the Commission adopted a Communication calling for the implementation of a three-year programme to simplify 222 basic legislations and 1,400 acts. The French Government and the European Parliament’s rapporteur were both extremely critical of a Commission plan to withdraw 68 legislative proposals from the inter-institutional circuit, particularly those relating to the regulation of heavy goods vehicles. The vagueness of the conclusions of the Competitiveness Council, held on 28 and 29 November, suggests that the Presidency failed to allay these concerns. More substantial success was achieved with the progress made on REACH. Negotiations on the most appropriate way to synthesize Chemical Regulation into one legal structure had been ongoing for a number of years. When the Commission launched the REACH proposals in October 2003, Denmark, Finland France, Germany and Sweden all raised concerns that the simpler legislation could have a detrimental effect on public health and the environment. The UK, whose thinking is more in line with that of the Commission, put discussion of REACH high on the agenda of both the Competitiveness Council and Environment Council. At the Competitiveness Council on 11 November, the UK tabled a compromise position that placated all member states with the exception of France. The compromise established by the main rapporteur, Gaudi Sacconi (PES, Italy), and Harmut Nassauer (EPP-ED, Germany) in the EP saw REACH pass its first reading on 17 November. REACH was once again on the agenda to be discussed at the Competitiveness Council on 28 and 29 November. The UK Presidency had planned a vote on REACH at the 28-29 November Competitiveness Council, but instead allowed Ministers further


65

discussion to allow the recently formed German and Polish Governments to finalize their positions. At a Special Meeting of the Competitiveness Council called on the 13 December 2005, the twenty-five Member States reached an agreement on REACH, which paves the way for other Presidencies to entice EP toward a joint agreement during 2006. There were also a number of developments relating to the liberalization and integration of service markets. Substantial progress was made towards agreement on the Financial Services Action Plan (FSAP). The Commission Green Paper on Financial Services Policy 2005–10, which outlined an agenda for reform of the services sector, was adopted with little controversy. The Commission requested comments on the first part of the FSAP and the Council is currently awaiting the White Paper on Financial Services Policy The Commissions White Paper, issued on 5 December 2005, differed little from the original Green Paper. The Services Directive also passed an important hurdle. The European Parliament’s Internal Market Committee put an end to months of acrimony when it voted through the Services Directive on 22 November. A coalition of centre-right, liberal and East European MEPs managed to vote through a version of the directive that was more in line with British thinking than that of the German PES rapporteur, Evelyn Gebhardt. The committee maintained the ‘country of origin’ principle despite Gebhardt’s efforts to replace it with a ‘mutual recognition’ principle to protect wages from competition. The directive moved to its first reading at a plenary session of the European Parliament on 15 February 2006. Both these events were good news for the Presidency’s agenda and provided positive news coverage for the British Government but the direct role of the UK Presidency in these developments was minimal. As external representative of the EU, the UK Presidency has had an even more tangible success with the progress made towards liberalization of the US–EU aviation market. At the end of a week–long conference in Washington at the end of November, the efforts of Jacques Barrot and Daniel Calleja Crespo, as representatives of the Commission, and Alistair Darling, as President of the Transport Council, bore fruit. The text of the first ever aviation treaty between the US and EU was agreed and linked to a US proposal to ease its interpretation of legislation that limits foreign investors to a 25 per cent voting stake, and a 49 per cent equity stake, in US airlines. The proposal is still undergoing review. The so-called ‘open skies’ deal was on the agenda of the 5 December Council, but full political backing is unlikely to be agreed until the US presents a definitive programme on liberalization in March 2006. These aviation talks were particularly difficult for the UK because of the desire for American airlines to have full access to Europe’s busiest airport, Heathrow. Given that British Airways is a global carrier, the UK had to balance a wish to safeguard a strong national position within the negotiations with the impartial role of the Presidency. The influence of the UK Presidency was clearer still in the stalling of discussions on the Working Time Directive. This represents a victory of British interests over those of the EU as a whole. When the Commission tabled a proposal under the Luxembourg Presidency to change the opt-out clause available to member states within the directive, the UK led a minority of governments who blocked its progress at the June Council. The operational programme for the year commits the Presidency progress the issue further, but explicit discussion of the directive was noticeably

66


absent from the agenda of Employment, Social Policy, Health and Consumer Affairs Councils or Competitiveness Councils during the UK’s tenure. The Presidency tabled a compromise position at the ESPHCA Council on 8 December, but it was rejected by fifteen of the member states. The lack of progress on the Working Time Directive can be viewed as a short-term ‘success’ for the UK Government, but succeeding Presidencies will be forced return to the issue. Security and Stability The aims of the UK Presidency in this area were divided into three further sub-sections: counter-terrorism, people trafficking and enlargement. One headline achievement for the UK Presidency was therefore in this field: the opening of accession negotiations with Turkey on 3 October. Yet there have been other achievements here too. In terms of counter-terrorism, the agreement and implementation of the June 2005 Hague Programme continued, if not at a pace in line within the Council dossier on the EU’s response to the London bombings, adopted on 13 July. The Presidency has achieved success in areas not quite specifically related to counter-terrorism – for example, the draft European Payment Order was approved at the Justice and Home Affairs (JHA) Council on 2 December. The Presidency had hoped for an agreement on a harmonized counter-terrorism strategy to be reached ahead of the European Council on 15 December, but a large number of ministers had their mandate challenged by domestic legislatures. The 2 December Council did make progress on the European Refugee Fund to help protect refugees ‘at source’. The JHA Council endorsed a Spanish proposal brought forward at the Hampton Court summit to release €400 million from the European Neighbourhood Policy to finance the plan. The predominant efforts of the UK Presidency were focused successfully on efforts to reach an agreement to harmonize the retention of telecommunications, email and internet data in all member states for up to two years. Germany, Greece, Italy, Portugal and Slovakia have all raised concerns about the implications for civil liberties and the cost if this legislation is applied to all crimes. Through adroit chairing the Presidency reached agreement, via qualified majority voting, for a directive. In spite of this, the Civil Liberties Committee of the European Parliament agreed to a different version of the proposal, voting to limit retention to only 12 months and to force member states to reimburse industry for any storage costs incurred. Significant divisions remained open ahead of the European Parliament’s vote on the issue at the plenary meeting scheduled for the 14th December. The Council threatened to adopt a more far-reaching framework decision if the EP failed to adopt the directive at the first reading and the Presidency put immense pressure on the EPP/DE and PES groupings in the three weeks preceding the vote.5 The EP eventually adopted the draft directive by 378 votes to 197. It is still possible that the legal base upon which it was agreed may be subject to challenge in the European Court of Justice. In terms of its objectives with regard to enlargement, the opening of negotiations with Turkey was indeed a considerable achievement. The Presidency faced 5 The threat was made in a letter dated 28 October 2005 – http: //www.euractiv.com/ Article?tcmuri=tcm: 29-147671-16&type=PolicyNews.


67

considerable obstacles to achieving this goal. Public opposition to the Constitution in the Netherlands and France had been linked in part to fears that further enlargement would depress wages. In Germany, the Chancellor-in-waiting, Angela Merkel, espoused a ‘privileged partnership’ instead of full membership for Turkey.6 The Austrian Government threatened to veto any attempt to open accession negotiations in the General Affairs Council. The position of the Presidency was helped by two events. The German elections did not present Angela Merkel with as clear a mandate as expected and, distracted by the need to build a grand coalition, the CDU was not represented at the General Affairs Council (GAC) in Luxembourg. It was also precipitate that Carla Del Ponte, chief prosecutor with the UN war crimes tribunal, had reported on 3 October that Croatia had fully cooperated with the ICTY over General Gotovina. This enabled the UK to simultaneously open accession negotiations with Croatia, considerably placating Austrian opposition to Turkish membership. The amount of politicking involved in this decision was well demonstrated by the decision of Croatia’s Catholic Christian Democrat Government to pay reparations to ethnic Germans expelled from Croatia at the end of the Second World War, a decision roundly attacked by Croatia’s President, Stipe Mesic.7 Fortunately the decision to open negotiations with Croatia does not appear to have undermined the EU’s transformative power in the region. On 7 December Gotovina was detained in Tenerife. Stabilization and Association Agreements (SAA) were opened with Serbia and Montenegro, as well as with Bosnia and Herzegovina (BiH). On 4 October, the refusal to open a SAA with BiH until much-needed police reform had begun saw the Police Reform bill forced through the Parliament of Republica Srpska on 6 October. The parliament of the predominantly Serb entity in BiH had previously rejected the bill twice. In this respect it was ‘mission accomplished’ for the UK Presidency, but the manner in which the Presidency handled negotiations on Turkish accession had the potential to damage the relationship between the UK and its European partners. Negative reactions from a number of foreign ministries in the established member states seem to suggest that a crisis could have been avoided had the UK laid the groundwork of consultation more thoroughly leading up to the GAC on 3 October. The representatives of the Central and Eastern European Countries were also incensed by the fact that they were consulted only after a deal had been agreed with Ankara. This does not appear to have been the result of incompetence on the part of the British Government, but rather a choice to focus political energy and effort on dealing with Austria as the recalcitrant member state obstructing the formal decision. Even if the methods used by the Presidency were criticized, the resulting agreement to open accession negotiations was welcomed by member states. Europe’s Role in the World Europe’s foreign policy has remained cohesive during the UK’s Presidency. The EU maintained a united front with regard to Iran. This was made easier by President 6 7

Financial Times, 3 June 2005. The Guardian, 30 November 2005.

68


Mahmoud Ahmadinejad’s call on 26 October for Israel to be wiped off the face of the earth, which received a clear rebuke from Tony Blair as President of the European Union, and a still harsher one from him as Prime Minister of the United Kingdom. The EU3 (Britain, France and Germany) persevered with an offer to renew talks with Iran, if the Iranian Government accepted an offer to place its nuclear energy programme under Russian control. For its part, the EU agreed at the 16 December European Council on the need to keep the EU’s diplomatic options under close review and to continue to calibrate the EU’s approach in light of Iranian declarations and actions. Although ultimately unsuccessful, the Presidency and the EU3 played an admirable part in forging a deal that was plausibly acceptable to the UN Security Council (plus Germany), if not to a defiant Iranian regime. Elsewhere the EU’s international involvement grew at a steady pace in the second half of 2005. In September 2005, the European Union launched the first ESDP (European Security and Defence Policy) operation outside Europe and Africa, the monitoring mission in Aceh (Indonesia), in conjunction with contributions from Norway, Switzerland and a number of ASEAN countries. It agreed a deal at the JHA Council on 12 October, which concluded five years of negotiations with Russia on the granting of visas and readmission of illegal residents. On 15 November the Council adopted a joint action that officially launches the EU Police Mission in the Palestinian territories (EUPOL–COPPS) as of 1 January 2006. The EU’s involvement in Iraq did not grow at as fast a pace as the UK Presidency might have liked. Negotiations on a Third Country Agreement to increase political and trade cooperation were not initiated during the UK’s tenure. Neither was a Commission Delegation Office opened on Iraqi soil. Nonetheless, the EU Political Directors did initiate a dialogue with Baghdad on 24 October and by the beginning of December the Commission had circulated a draft Negotiating Mandate for a Third Country Agreement with Iraq. Progress was made towards the opening of a Commission Delegation Office at the GAC on 7 November and a decision was taken to extend EUJUST LEX (the Rule of Law Mission for Baghdad). In its representation of the EU at major summits with third countries, the UK was a model Presidency. The UK was not able to use the opportunity of its parallel chairmanship of the G8 to promote a European response to two issues high on the public agenda in the second half of 2005: climate change and Third World poverty. The June White Paper appeared to suggest that the UK wanted to ensure the EU led the discussion on climate change at the Montreal Conference from 28 November to 9 December. Yet, the European approach to climate change appeared to undergo a transformation in the same period that the UK held the Presidency. The second European Climate Change Programme, launched by the Commission on the 24th October, gave much greater credence to technology led solutions than its predecessor. The UK Presidency also welcomed the idea of a technology-led approach as an appropriate way to tackle problems created by US obstinacy and the rapid development of China and India. As a result, the UK Presidency returned from Montreal with a deal better than might have been expected when it assumed the Presidency of the EU. The conference successfully agreed to establish a working group that will determine emission targets for the period 2013-17, once Kyoto has expired in 2012. This was an objective of the Government’s White Paper of the 30th June. It remains to be seen whether the


69

working group can be used to agree reduction pathways in the order of 15-30 per cent for developed countries, as the Council had hoped, when it meets in May 2006. The UK also dedicated considerable time and effort to ensuring that the US was reengaged at Montreal. These efforts bore fruit on Saturday 10th December when the US Government, under increased pressure at home, agreed to sign a revised version of a statement calling for cooperation on climate change. Sources within the Foreign Office maintain that this outcome would not have been possible without the consistent elevation of the issue of climate change to the top of the agenda during its Presidency of both institutions, as well as the inclusion of China and India within the discussions at the G8 summit. This move enabled the UK’s EU Presidency to build upon an unheralded level of trust on climate change during its External Summits with India and China. Subsequently it was capable of further taking forward initiatives such as the Commission’s plans for technology exchange with China on near-zero emissions Coal. Shifts in the positions of the two most significant emerging economies in the world, put undeniable pressure on the US administration. The Montreal Climate Change conference had secured the issue of climate change a place on the international agenda. It was perhaps fortuitous that the Presidency of the G8 fell to a member of the EU, but the ability of the UK’s EU Presidency to include the interests of external parties within the European perspective and forge a realistic approach to the issue was admirable. To argue that the Presidency put emphasis on both these aspects as part of some pre-ordained strategy rather undermines the very impetus that the UK’s Presidency brought to the international debate. On Third World poverty, there was something of a disconnection between the UK’s G8 agenda and the policies pursued during its Presidency. In the June White Paper, the UK Presidency stated that it aimed to agree a new long-term strategy on EU–African relations at the December European Council. Unfortunately, the negotiations became embroiled in the wider debate over the future financing of the EU budget. At the informal African Development summit in Leeds, the UK, Luxembourg, Sweden, Denmark and the Netherlands all expressed concerns about the proposal tabled by the Commission for a joint development strategy on Africa. The UK’s major concern was that the strategy should be financed by mechanisms outside the EU budget, so that it did not get embroiled in the protracted dispute over the financial perspective for 2007–13. As it was the budget negotiations dominated the run up to the December Council and the complications they created for progress in this field became yet another stick with which to beat the Presidency while it remained silent with regard to budget proposals. The EU did not present a deal that came anywhere close to meeting the Doha Development Agenda for the ministerial meeting of the WTO in Hong Kong from 13 to 18 December. One major stumbling block was overcome with the conclusion of an agreement on reform of the EU’s sugar regime. The conclusions of the Agriculture Council on the 24th November accepted a deal that cut the EU sugar price by 36 per cent over four years. Unfortunately, the deal that the Presidency has coaxed out of the major players fell short of the 39 per cent reduction over two years originally envisaged in the June council proposals. The ACP producers, those third-country producers who currently benefit from fixed pricing within the EU, have deplored the


70

compensation they have been offered: €60 million is scheduled to be paid to ACP countries in 2006. This deal does not match the Presidency’s original objectives, but the ability to reach an agreement did put the EU in a moderately better negotiating position ahead of the WTO meeting in Hong Kong. Despite this, the EU and other major players are still bogged down in the other parts of the quagmire surrounding agricultural reform. The EU did agree to eliminate export subsidies by 2013. To argue that Hong Kong represented a great shift in the debate would be wrong; to argue that it was a success would be considerable hyperbole. The UK Presidency, for its part, successfully managed to uphold the mandate of Commissioners Peter Mandelson and Mariann Fischer Boel to negotiate on behalf of the EU, despite consistent challenges from the French Government. The French agriculture minister, Dominique Bussereau, maintained in public statements that Mandelson’s offer to cut customs duties by 24.5 per cent on imported agricultural produce far exceeded his mandate. At the Special GAERC on the 13-18 December in Hong Kong, it was emphasized that: The Council expressed at the various stages of the negotiations its full support for the approach and line of action of the Commission.8

Despite considerable efforts the Presidency was impotent to enhance the prospects of the EU being able offer anything that overcame the current obstacles to the conclusion of the Doha Round. On the 26 October, the EU made an offer on a 70 per cent reduction in agricultural subsidies and an average cut of 38.9 per cent in agricultural tariffs. APEC (Asia Pacific Economic Cooperation) and the Cairns group have published statements suggesting that they will block progress in any other area, if further concessions are not made on agriculture. The British Government would have undoubtedly liked to go further, but its inability to drive the debate sufficiently forward underlines the lack of power inherent in the rotating-Presidency. Fundamentally, it underlines the absence of any institutional mechanism by which major ideological questions can be settled at the European-level and provide a mandate through which policy can be driven forward accordingly. Future Financing The problems experienced by the UK Presidency were accentuated by the fact that discussions of agricultural reform led back to two things: the British abatement and the British Government’s overt ideological commitment to a particular model of economic reform. This was most clear in the dispute over future financing of the EU budget in the financial perspective 2007–13. The British Government would have probably liked to postpone discussion of this issue during its Presidency, in much the same way that the ‘period of reflection’ agreed at the June summit saved it from leading discussions on the future of the EU constitution. Other member states and the European Commission did not allow the issue to fall off the Presidency’s agenda. The UK strategy appeared to have two clear strands. First, the UK Presidency 8

http: //ue.eu.int/ueDocs/cms_Data/docs/pressData/en/gena/87672.pdf.


71

continually linked reform of the UK rebate to reform of the Common Agricultural Policy (CAP), as a distorting element of the EU budget. Second, it has adopted the same delaying tactics used to force an agreement on Turkey. The UK did not present detailed proposals on the budget to EU member state governments until 5 December, only ten days before the European Council meeting. The thrust of the proposals attempted to reduce the burden on the current net contributors to the budget by cutting the €160 million regional aid planned for the Central and East European member states ‘by no more than 10 per cent.’9 This reduction was justified on the basis that the East European member states had thus far failed to absorb a substantial amount of aid within the two-year time limit for spending it. The reduction would be linked to an extension of the time limit in which the East European states are allowed to spend aid, as well as a 2009 review of spending, including the CAP. A key point of the UK proposals was that they have decoupled the CAP reform from any alteration to the UK’s rebate. This was done by presenting changes to the rebate as being driven by the UK’s willingness to relinquish a proportion of it in order not to disadvantage the new member states and to make an appropriate contribution to eastern enlargement. The UK proposals were not received warmly and the prospects of a deal on the budget were not auspicious. President Barroso likened the approach to that of the Sheriff of Nottingham, robbing the poor to pay the rich.10 There was a long-standing feeling in Brussels that the British insistence on linking reform of the rebate to the CAP came too late. In 2002, Tony Blair agreed to a set of CAP reforms set for review in 2013, and the UK’s persistence in maintaining the rebate at all other junctures risked undermining attempts to secure a deal that would have ensured a mid-term review of CAP reform prior to 2013. The real failure of the British Government on the EU budget negotiations up to this point was that the UK had not actively advanced the case for a thorough review of all aspects of the EU’s expenditure and financing over the last few years, but instead maintained its position that the UK EU budget rebate was non-negotiable. Still, after fraught negotiations, the UK successfully secured a mid-term review of spending in 2008 at the European Council on the 15–16 December. The UK in its role as President successfully secured a new budget that was announced on the 17th December. The budget deal set total expenditure at 1.045 per cent of the EU’s GNI (€862.3 billion). The deal reduced expenditure by pairing a €10.5 billion reduction to the British rebate over seven years with a €16 billion reduction of aid to Eastern Europe. The UK Presidency successfully secured a deal between Member States, but the saga will run well into the Austrian Presidency with the potential for the deal to falter at the inter-institutional level. 541 MEPs voted to reject the deal at a plenary on the 19th January 2006, with only 56 being in favour and 71 abstaining. MEPs were particularly upset that the deal fell far short of the €974,837 billion requested by the EP in June 2005. They also took umbrage that the hEP appeared to have been written

9 Financial Times, 5 December 2005. 10 Financial Times, 1 December 2005.

72


out of the mid-term review of spending.11 The Commission, Presidency and Council are expected to present a draft inter-institutional position this month (February 2006) although the reconciliation will not necessarily follow a strict schedule. The East European states were eager to guarantee an assistance package prior to the 1st January deadline and were given longer timeframes to ‘absorb’ aid. Nonetheless, the manner of the deal did little to stifle the rising tide of Euroscepticism in Eastern Europe and a lot to enhance the approach to Europe being taken by the governments in Warsaw and Prague. Even though the new Germany Chancellor reverted to the traditional role of paymaster and thereby softened the blow of the budget deal on Poland in particular, the budget deal did not pass through the lower house of the legislature until the 24th January 2006 after weeks of horse-trading. At the time of writing, it has yet to pass through the upper house. Two Cheers for the British Presidency? The UK’s Presidency of the EU was not a disaster. There was notable progress in a number of policy areas despite the potential for the Presidency to become embroiled in all number of external controversies. There has been considerable progress on both REACH and the Services Directive. It is, however, important to note that here the Presidency is dependent on delivery by other EU institutions such as the European Parliament and the European Commission. The Presidency can claim success for progress in these areas but the success is not necessarily its own making. A key success was that the Presidency oversaw the opening of accession negotiations with Turkey. This was essentially reconfirming a decision already made, but a failure to open negotiations would have created considerable difficulties for the EU in its relationship with Turkey. The Presidency secured a budget deal and by conceding €8 billion (over seven years) of the British rebate, secured a mid-term review of spending. The outcome of the budget negotiations were far from satisfactory for all parties concerned but this may be the best deal that a UK Government is in a position to offer without inviting huge domestic political ramifications. If the negotiations had been allowed to rumble on into the Austrian Presidency, Europe would have been faced with a British Government no longer occupying the Presidency (and consequently keen to reach a deal during its term of office) and preparing for local government elections in May 2006 against a renewed opposition in the form of the Conservative Party under David Cameron. The UK would have relapsed into a much less flexible negotiating position. There was also disappointing progress on the Doha Round of WTO negotiations. Perhaps if the Presidency had been in the position of having to devote less energy to the budget issue it might have been able to devote extra political energy to strengthening the European commitment to these negotiations. The UK Presidency achieved a large part of what it planned to achieve. However, its style has damaged the UK’s standing in Europe. The failure of the Prime Minister 11 http: //www.isn.ethz.ch/news/sw/details.cfm?id=14451.


73

to follow up on his June speech on the future for Europe has left the impression that the UK is content with the EU’s current status quo – and with the Constitutional Treaty being consigned to history. Perhaps the most damaging immediate impact of the Presidency on the interests of the British Government will result from its preference for brinkmanship (over consultation) on the EU budget during its term of office. But that a deal was brokered at all during the European Council in December is a significant achievement to the Presidency’s credit. The UK EU Presidency is a case study demonstration of the importance of the role of the Presidency for the EU. The UK Presidency was neither a dysfunctional Presidency nor an overwhelming success. Rather it was effective in realizing the objectives that it set for itself rather than providing inspirational leadership. The UK Presidency was a classic ‘competent Presidency’ in that it exemplified the constraints of the six-month rotating Presidency that provides few formal powers with which to directly influence the agenda. The UK was the conductor of the EU’s business that fell during its Presidency and, as with all Presidencies, that agenda was neither entirely of its own making nor directly under its control. The EU Presidency provides an only a fleeting opportunity for leadership and without the exercise of significant power. References Bjurulf, B., O. Elgström, Tallberg, J. (1999). The Council Presidencies of the Nordic EU Members: A Comparative Study Dnr 1999-5180: 01. http: //www.svet.lu.se/ Projekt/Presidency/Presidency-application.pdf, accessed 4 December 2006. De Bassompierre, G. (1988). Changing the Guard in Brussels: An Insider’s View of the Presidency. New York: Praeger. Elgström, O. (2003). European Union Council Presidencies: A Comparative Perspective. London: Routledge. Edwards, G. and H. Wallace. (1977). The Council of Ministers of the European Community and the President-in Office. London: The Federal Trust for Education and Research. Hayes-Renshaw, F. and H. Wallace. (1997). The Presidency. In F. Hayes-Renshaw and H. Wallace (eds.) The Council of Ministers. London: Macmillan, pp. 134-57. Kirchner, E. (1992), Decision-Making in the European Community: The Council Presidency and European Integration. Manchester: Manchester University Press. Kirchner, E. and A. Tsagkari. (1993). The EC Council Presidency. The Dutch and Luxembourg Presidencies. London: UACES. Ludlow, Peter. (1998). ‘The 1998 UK Presidency: A View from Brussels’. Journal of Common Market Studies 36(4), pp. 573-83. Luther, K. R. and I. Ogilvie. (1998). Austria and the European Union Presidency: Background and Perspectives. Keele: Keele European Research Centre. Sherrington, P. J. (2000). European Union Decision-Making: The Work of the Council of Ministers. Cassell Academic. Svensson, A. (2003). ‘The agenda shaping powers of the EU Council Presidency’. Journal of European Public Policy 10(1),1-19.

74


Tallberg, Jonas. (2004). ‘The Power of the Presidency: Brokerage, Efficiency and Distribution in EU Negotations’. Journal of Common Market Studies 42(5), pp. 999-1022. Wallace, H. (1984). ‘Role and Evolution of the Presidency’. In J-M. Hoscheit (ed.), The Impact of European Affairs on National Administrations –The Case of the Presidency. Maastricht: European Institute of Public Administration. Wallace, H. (1985). ‘The Presidency of the Council of Ministers of the European Community: Tasks and Evolution’. In C. O. O’Nuallain (ed.), The Presidency of the European Council of Ministers. London: Croom Helm. Westlake, Martin. (2000). The Council of the European Union. London: Cartermill. Wurzel, R.K.W (1996). ‘The Role of the Presidency in the Environmental Field: Does It Make a Difference which Member State Runs the Presidency’. Journal of European Public Policy 3(2), pp. 272-91.

Chapter 5

European Union International Strategy Against Proliferation Threats Milagros Álvarez-Verdugo

Proliferation of weapons of mass destruction (WMD) constitutes a renewed risk for international peace and security. The conventional international treaties that control WMD rely on the State, but nowadays their efficiency faces specific challenges. Within this context, the EU has made moves to enhance its role as a non-proliferation actor (Schmitt 2003: 15; Portela 2003: 22),1 specifically since the adoption of the European Union strategy against proliferation of weapons of mass destruction, approved by the European Council in December 2003.2 This document represents the political will of member states to fight against proliferation of WMD in a specific ‘European way’. To assess this EU approach, this chapter examines the diagnosis, objectives, and proposals the EU has put forth with regards to WMD. The conclusions will provide an overall assessment on the effectiveness of the European Strategy and the conditions such success depends upon. Diagnosis of the Threat The EU sees the proliferation of WMD and their means of delivery as an increasing threat to international peace and security – rather than these weapons’ mere 1 Among the EU´s earliest measures were actions in favor of the inclusion of a legally binding protocol to reinforce the Biological and Toxin Weapons Convention (BTWC) and the EU acquis with regards to the Treaty on the Non-Proliferation of Nuclear Weapons (NPT). At the beginning of the 1980’s, EU member states began to address jointly the problems of nuclear proliferation through an informal working group within the framework of European Political Cooperation. Through the Single Europe Act, another working group was formed on chemical and biological weapons. The activity of these working groups, since the adoption of the European Union treaty, has been carried out within the Committee on Non-Proliferation (CONOP), which addresses the questions of WMD and missile proliferation from the perspective of the CFSP. 2 Two other documents are also relevant: the Action Plan for the implementation of the basic principles of an EU strategy against the proliferation of weapons of mass destruction, adopted by the European Council in June 2003, and the European Security Strategy – A Safe Europe in a Better World, adopted by the European Council in December 2003. These documents and other relevant to this topic can be consulted by visiting the web page http: //ue.eu.int/cms3_fo/showPage.asp?id=392&lang=en&mode=g. Hereafter, these documents will be referred to as ‘Action Plan’, ‘EU Security Strategy’ and ‘EU–WMD Strategy’.

76


existence.3 The EU viewpoint reflects that of other international organizations and is consistent with the International Court of Justice’s opinion that it is impossible to establish a general international law rule that bans a particular type of weapons per se.4 Nonetheless, the different status of EU Member States as regards to nuclear weapons (particularly, the status of France and the United Kingdom as legal nuclear powers under the Treaty for the Non-proliferation of Nuclear Weapons – NPT5) shapes the European position and thus preventing the EU from outright rejecting all WMD (Quille and Pullinger 2003; Portela 2003: 3-5). On the other hand, the EU Strategy clearly advocates for a universal ban on chemical and biological weapons because all member states have ratified the Conventions on Biological and Chemical Weapons.6 Other consideration defines the EU diagnosis: the connection between WMD and terrorist groups, which brings a new and critical dimension to the WMD threat.7 According to EU analysis, this connection is particularly strong in terms of chemical and biological weapons because their specific characteristics (dual use of many biological and chemical products) make them especially attractive to terrorists.8 Nonetheless, the EU position does not overlook the risk of nuclear explosive use by terrorists and certainly, the Strategy includes a significant number of measures to enhance the security of nuclear materials and facilities. Lastly, the EU diagnosis addresses the responsibility of some –unnamed – countries and non-state actors in encouraging proliferation, and suggests that the threat stems from limitations in current international regulations (treaty scope).9 However, when the EU tackles the specific problems of WMD proliferation, it broadens the origin of the threat as caused by breaches imputable to states and subject to international treaties (treaty compliance). According to the EU diagnosis, the cause of proliferation stems from both weaknesses in scope and in implementation mechanisms of current international regulations.10 Thus, the EU diagnosis reflects the current historical period because it links WMD with international terrorism and recognizes that international terrorism adds a new dimension to the problem of WMD. This link does not prevent the EU from considering each state ultimately and principally responsible for the proliferation of WMD. In fact, the EU is confident that 3 EU-WMD Strategy, paragraph 1. Indeed, it is one of the five threats identified by the EU Security Strategy document, which states, ‘the proliferation of WMD is, potentially, the most serious threat to our [EU] security’. 4 See Advisory Opinion 1996 ICJ 226, paragraph 39. 5 See UNTS Vol. 729, I: 10485. 6 See Convention on the prohibition of the development, production and stockpiling of bacteriological (biological) and toxin weapons and on their destruction (BTWC), UNTS Vol. 1015, I: 14860, and Convention on the prohibition of the development, production, stockpiling and use of chemical weapons and on their destruction (CWC), UNTS Vol. 1975, I: 33757. 7 EU-WMD Strategy, paragraph 4. The document states that non-proliferation, disarmament and weapons control can make a fundamental contribution to the global fight against terrorism (paragraph 3). 8 EU-WMD Strategy, paragraph 8. 9 EU-WMD Strategy, paragraph 4. 10 EU-WMD Strategy, paragraph 6-9.

European Union International Strategy Against Proliferation Threats

77

exerting control over States may significantly reduce the risk of terrorism. The reason for this is that each internal state action may reduce the access of terrorists groups to the expertise, resources, technical infrastructure, and logistics needed to develop and use WMD. International coordination and cooperation is key to dealing with this problem. Deciding what actions to take against any State unwilling or unable to fulfill its international obligations is an issue that the EU faces when designing its program against proliferation, not in the diagnosis of the problem. Axes of Action With that diagnosis of the threat, the EU objectives are ‘to prevent, deter, halt, and where possible, eliminate proliferation programs of concern worldwide.’11 This is in fact a limited, but realistic objective. Elimination of proliferation is subject to conditions of probability (its characteristics are not explained), and the EU objectives do not include every WMD program (which would be beyond EU capacities). The EU seems to respect the current state of international law on disarmament and arms control. This means that the proliferation programs of States that are not party to present international treaties can be questioned only if the Security Council determines that they are a threat to international peace and security. But the words written in the EU Strategy are obviously ambiguous: concern worldwide does not mean Security Council determination. The EU position is a universal one, but it remains reluctant on this particular point to limit its possibilities of action to only those programs determined by the Security Council to be a threat to international peace and security. In order to achieve those objectives, four main principles guide the European approach: multilateralism, comprehensive action, co-responsibility, and gradualism.12 Multilateralism incorporates the defense, implementation, and reinforcement of international disarmament and nonproliferation treaties and agreements, as well as support to multilateral institutions that verify and control compliance. The comprehensive action principle implies the employment of all the Union’s resources and tools to achieve EU goals, as well as the integration of nonproliferation into all EU policies. Co-responsibility acts in two different directions: first, through export control on dual use goods and technologies and second, through the EU’s contribution to solving the main causes of instability (development assistance, reduction of poverty and promotion of human rights). Lastly, the principle of gradualism guides the application of anti-proliferation measures, which are both preventive and coercive. The former constitutes the first line of defense against proliferation for the EU and includes political, diplomatic actions as well as reliance on competent international organizations. The latter embraces measures envisaged in Chapter VII of the United Nations Charter and under international law, which the EU would consider using only if preventive measures fail.

11 EU-WMD Strategy, paragraph 2. 12 These principles underlie the EU Strategy and they can be found, specifically, within paragraphs 14 and 15.

78


These principles are classical European trademarks in the fight against proliferation. Nonetheless, the document reveals disagreement among Member States concerning the role of coercion, especially military force against proliferation threats and the position of the Security Council. Indeed, the Strategy merely assigns the Security Council a central role, not the primary competence as stipulated in article 24 of the UN Charter. This is a very controversial point: while some analysts recommend linking forcible action to a UN Security Council mandate, in order to make the European Strategy credible (Portela 2003: 34), others consider that this credibility will exist only when the EU declares its willingness to use force against proliferators, with or without the Security Council authorization (Kagan 2003; Toje 2005). The author does not agree with this last point of view: in addition to being illegal,13 this kind of declarations decreases the credibility of the non-proliferation regime and further introduces uncertainties in the international system. The credibility of the non-proliferation regime is grounded on the network of commitments between nuclear and non-nuclear states, the prohibition of chemical and biological weapons (with a different scope under conventional and customary rules), and verification mechanisms in order to guarantee the compliance of States with these obligations. These mechanisms include the Security Council as uniquely empowered with the right to declare a State to be a threat to international peace and security and in a position to determine proper sanctions against this State. Unilateral statements about the willingness to violate international legal rules are usually in the origin (although rhetoric) of proliferation programs, if not the source of fear causing unpredictable arms races. In addition, the threat of use or the use of force has proven ineffective in avoiding or eliminating a proliferation program, as the cases of Iraq (Tuchman 2004)14, Libya (Allison 2004: 171-75)15 or North Korea (Salama 2005)16 have clearly demonstrated. Action Plan From these goals and principles, the EU Strategy designs an action plan with four groups of measures: (1) measures to implement an effective multilateral response, (2) measures to promote international and regional stability, (3) measures to implement cooperation with key EU associates, and (4) internal structural and organizational measures. The actions associated with each of these areas are heterogeneous. 13 According to Article 2 of the UN Charter as well as the rules of international customary law. 14 Iraq proliferation program ended with the UN inspection action in 1991-1998, as the subsequent US occupation of Iraq has demonstrated. 15 It appears clear that Libya’s decision on 19 December 2003 after many years of diplomatic and economic isolation, to renounce its WMD arsenal – although not significant in size – and pursue unilateral disarmament was to a strong degree the result of ‘diplomatic carrots and sticks’, and not threats. 16 The US threats against North Korea seem to have had no effects on the Pyongyang authorities’ decisions; and in fact they utilized US actions to justify their nuclear proliferation program.


79

Nonetheless, it is worth noting that the bulk of EU measures propose effective multilateralism in determining what action to take against those who proliferate WMD, thus highlighting how important multilateralism is in the EU global agenda.17 Implementing Multilateralism The EU tackles the execution of an efficient multilateral response against proliferation with a large set of measures that can be separated into three groups: (i) promotion of relevant legal regulations regarding WMD, (ii) reinforcement of verification mechanisms and control of those international legal regulations and (iii) avoidance of the misuse of dual use (civil and military) goods and processes. The first group consists of the promotion of relevant legal regulations regarding WMD, using three complementary measures. First, diplomatic action seeks the universalization of existing international treaties, including their verification regimes –like those contained in the Additional Protocols of the International Atomic Energy Agency (IAEA).18 Second, direct assistance – technical and/or financial – is provided to third states to ensure the correct implementation of international agreements on WMD. This refers specifically to the implementation of two agreements, the BTWC and the CWC, both of which seek to overcome the administrational (legislative, institutional, etc.) and/or financial difficulties (implementation costs) that some states face in complying with these international commitments. Third, financial support is given to relevant multilateral institutions (IAEA, the Preparatory Commission for the Comprehensive Nuclear-Test-Ban Treaty Organization – CTBTO – and the Organization for the Prohibition of Chemical Weapons – OPCW). The second group of measures seeks to reinforce the verification mechanisms and control of international legal regulations related to WMD. To this end, the Strategy proposes the effective use of existing mechanisms and the design of new ones. This commits the EU to promote challenge inspections within the CWC framework as 17 At the end of each semester, the Council debates and adopts a progress report on the implementation of this action plan. These reports are a great tool in evaluating the advantages and obstacles of the EU as a non-proliferation actor as well as the agreements and disagreements of its member states on specific aspects of measures envisaged in the action plan. See Council of the EU, Document 10448/04, Brussels, 10 June 2004 (First Progress Report); Document 15246/04, Brussels, 3 December 2004 (Second Progress Report); Document 9898/05, Brussels, 8 June 2005 (Third Progress Report); Document 5279/06, Brussels, 12 January 2006 (Fourth Progress Report); Document 10527/06, Brussels, 14 June 2006 (Fifth Progress Report), and Document 5183/07, Brussels, 9 January 2007 (Sixth Progress Report), in http: //ue.eu.int (accessed on 1 February 2007). 18 This measure includes some clear EU action, in particular the Common Position decided 17 November 2003 on the globalization and reinforcement of multilateral agreements concerning WMD. See OJ L 302, 20.11.2003, p. 34. Another precedent, though one of a more specific nature, is the Council Decision 2003/567/CFSP of 21 July 2003 implementing Common Position 1999/533/CFSP related to the European Union’s promotion of early implementation of the Comprehensive Nuclear Test-Ban Treaty (CTBT). See OJ L 192, 31.07.2003, p. 53.

80


well as continuing the study of the verification instruments for the BTWC and the CWC. In regards to the BTWC, the EU seeks to establish a group of experts to assist with compliance with its norms. Additionally, the EU has participated in the annual meetings of States Parties and experts meetings leading up to the BTWC Review Conference in 2006. In March 2005, the Personal Representative put forward suggestions on how the EU could promote universality and the implementation of the BTWC. The Council adopted it on 27 February 2006 in a joint effort to support the BTWC.19 In addition, a Joint Action in support of the CTBTO verification system has also been adopted,20 and the EU endorses the establishment of the IAEA Additional Protocol as the verification standard mechanism.21 The third group contains measures to avoid the misuse of dual use (civil and military) goods and processes through export control, equipment and materials security, and the fight against illegal trafficking. Concerning exports control, the Strategy seeks to reinforce the EU regime, as well as to ensure some degree of EU foreign policy coherence in these matters (Schmitt 2001: 9).22 The EU strategy calls for establishing a program to assist those countries with insufficient knowledge about exports control, and the adoption of two specific restrictive measures. These establish the Nuclear Suppliers Group (NSG) to subject exports to the ratification and implementation of the IAEA Additional Protocol, as well as encourage reinforced export controls over intangible transfers of dual use technology. In regards to physical security, unauthorized access or the potential of diverting equipment and materials, the EU pursues effective control of highly radioactive sources as well as the physical protection of nuclear materials and facilities.23 19 See Council Joint Action 2006/184/CFSP, of 27 February 2006 in support of the Biological and Toxin Weapons Convention (OJ L 65, 7.3.2006, p. 51-55) and Council Common Position 2006/242/CFSP, of 20 March 2006 relating to the 2006 Review Conference of the BTWC (OJ L 88, 25.3.2006, p. 65-67). 20 See Council Joint Action 2006/243/CFSP, of 20 March 2006 on support for activities of the Preparatory Commission of the CTBTO in the area of training and capacity building (OJ L 88, 25.3.2006, p. 68-72). 21 See Council Common Position 2005/329/PESC of 25 April 2005 relating to the 2005 Review Conference of the Parties to the Treaty on the Non-Proliferation of Nuclear Weapons (OJ L 106, 27.04.2005, p. 32-35), and Fundamental elements proposed by the European Union to be inserted in the final document of the 2005 NPT Conference concerning Main Committee I (NPT/CONF.2005/MC.I/WP.1), Main Committee II (NPT/CONF.2005/MC.II/WP.1) and Main Committee III (NPT/CONF.2005/MC.III/WP.1). At http: //www.un.org/events/npt2005 (accessed on 7 July 2005). 22 The Strategy calls for coordinating EU policies within the framework of existing regimes; supporting the compliance of new member states with these regimes; promoting the Commission’s participation, and stimulating when necessary the introduction of catch-all clauses in exports control regimes. 23 Concerning EU internal action, see Council Directive 2003/122/EURATOM, 22 December 2003, on the control of high activity sealed radioactive sources and orphan sources (See OJ L 346, 31.12.2003 p. 57-64). In addition, all member states have ratified the Convention on Physical Protection of Nuclear Materials and have participated in the Amendment Conference of this Convention met in Vienna from 4 to 8 July 2005.


81

Moreover, the EU proposes reinforcing controls on pathological microorganisms and toxins, and promoting a dialogue between EU and US industries to increase the awareness of WMD issues, particularly biological weapons.24 EU external action has focused on radioactive sources and is being implemented through the IAEA structures.25 Nonetheless, EU carries on autonomous actions supporting the nuclear non-proliferation and security programs in Russia.26 Finally, the document proposes three measures to fight illegal trafficking: the adoption of common EU penal sanctions; measures on the transit and transfer control of high-risk material, and support of international initiatives aimed at combating illegal trafficking.27 Promoting International and Regional Stability The action plan proposes reinforcing EU cooperative threat reduction programs and integrating the WMD non-proliferation concerns into the EU’s political, diplomatic, and economic activities and programs. The Russian Federation is the main target of those programs. The Strategy proposes to increase the EU financial support on disarmament and nonproliferation28 by including a specific line in the European Community budget 24 Two of these measures must be emphasized. First is the creation of a center for diseases control. See Regulation (EC) No. 851/2004 of the European Parliament and of the Council of 21 April 2004 establishing a European centre for disease prevention and control (OJ L 142, 30.04.2004, p. 1-11). Second, a proposal encouraged by the EU and its member States during the BTWC annual experts meeting to elaborate guidelines on how to boost efficient national legislations as well as compliance with the BTWC dispositions –the EU stance was actually contrary to the US one. See Tucker, ‘The BWC New Process: A Preliminary Assessment’, p. 32-33. 25 See Council Joint Action 2004/495/CFSP of 17 May 2004 on support for IAEA activities under its Nuclear Security Program and in the framework of the implementation of the EU Strategy against Proliferation of Weapons of Mass Destruction (OJ L 182, 19.05.2004, p. 46-50). 26 Once the European Union Cooperation Program for Nonproliferation and Disarmament in the Russian Federation ended on 24 June 2004, the Council adopted on 22 November 2004 the Joint Action 2004/796/CFSP in support of the physical protection of a nuclear site in the Russian Federation (OJ L 349, 25.11.2004, p. 57-62). 27 Their implementation include an EC Regulation amending the Community Customs Code to ensure enhanced safety and improvement of risk analysis (23 May 2005), the declaration of the EU Council of 1 June 2004, which supports the Proliferation Security Initiative (PSI) and, in particular, the Statement on Interdiction Principles adopted on 4 September 2003 by the states that participate in the PSI (See Council of the European Union, Non-Proliferation Support of the Proliferation Security Initiative, Brussels, 1 June 2004, document 10052/04 (Presse 189). The Declaration confirms the connection between the PSI and the UN Security Council resolution 1540, 28 April 2004). In contrast, the discussion continues on the adoption and possible implementation of common policies related to criminal sanctions. 28 The EU committed itself, during the G8 Summit in Kananaskis, to support the G8 International Association with €1000 million over a period of 10 years in order to fight against the proliferation of weapons and materials of mass destruction.

82


for WMD disarmament and nonproliferation activities, and encouraging member states to contribute financially. Unfortunately, no specific Community budget line for WMD existed until now.29 The EU has also yet to adopt the technical assistance program for third countries envisioned into the Strategy. This should have the aim of guaranteeing security and control over high-risk material, facilities and information, through facilitating the conversion of WMD expertise. Better results have been achieved with the implementation of mainstreaming non-proliferation policies into the EU’s relations with third countries, including a non-proliferation clause in agreements with those countries.30 Although the clause does not include the same language and scope in all treaties, in all cases, it requires effective action against proliferation risks. Implementation is then monitored using the regular political dialogue between the parties to the agreements at both ministerial and official levels.31 Lastly, the Strategy refers to increasing EU efforts to solve regional conflicts by using all available instruments, in particular within the framework of the Common Foreign and Security Policy (CFSP) and the European Security and Defense Policy (ESDP). The EU Strategy does not specify particular measures for the Mediterranean region, despite previously classifying it as a priority. Nonetheless, EU is taking steps in order to restart a dialogue on disarmament and non-proliferation in the context of the Barcelona process.32 Implementing Intergovernmental Cooperation The point of departure is simple: international cooperation on non-proliferation should begin with agreement among associate and main ally countries. Consequently, non-proliferation is on the agenda of every EU–US summit meeting. A cooperative 29 The credits included in the EU budget under the heading ‘Non-proliferation and disarmament’, are meant for two purposes. First, to fund actions which contribute to the reduction of WMD and, second, to fund operations to fight against the spread of light weaponry and illicit arms trafficking, unless these actions are mentioned in the Cotonu Agreement (which deals with this type of actions within the ACP countries). This budget structure maintains so far. 30 This clause includes a commitment against the proliferation of WMD and its vectors by, amongst other means, the complete implementation of existing international instruments and the creation of an efficient system for national exports control. 31 The non-proliferation clause has been inserted in the Partnership and Cooperation Agreement with Tajikistan and in the Association Agreement with Syria. In addition, a nonproliferation clause reference to the cooperation in countering proliferation of WMD (based in the nonproliferation clause) has been inserted in the revised ACP-EU Cotonou agreement concluded by the EU with 78 countries and signed on 24 June 2005. In parallel, Action Plans with the countries of Eastern Europe and the Mediterranean in the context of the European Neighborhood Policy include a WMD chapter, containing the key elements of the WMD clause. In the case of Pakistan, a parallel instrument to the Community Agreement that would contain a non-proliferation clause is to be negotiated by the Council and, as a follow-up to the EU–Indian Summit in 2004, an Action Plan with India is being negotiated which would include some actions related to WMD. 32 See Third Progress Report, p. 14 and Fourth Progress Report, p. 20.


83

action plan was agreed upon at the June 2004 summit and was renewed since 2005. Besides, the EU and the US have developed a tradition of consulting whenever important international events in the area of non-proliferation and disarmament arise. There are also regular staff-to-staff contacts (Gianella 2005: 43). The effectiveness of these regular contacts does not obviate differences, such as the role of verification mechanisms, disarmament, and particularly in assessing how to address specific proliferation challenges. The Proliferation Security Initiative and the UNSC Resolution 1540 (2004) clearly fall into the area of positive EU–US cooperation. Nonetheless, the mechanisms for fulfilling BTWC obligations, the characteristics of a Fissile Material Cut-off Treaty, the US noncompliance with some of the commitments adopted at the 2000 NPT Review Conference and, in a broad sense, the different US-EU approach to the 2005 NPT Review Conference remain as areas of disagreement. EU interaction and cooperation with other international actors exists as well, but with different features. EU assists Russia and other ex-Soviet Republics financially and technically in the area of non-proliferation and disarmament (protection of sites, conversion of scientists, etc.). Besides, India, Pakistan, and China are all on the priority list of the Strategy. The EU specifically plans to assist them with the setting up of export control legislation and implementation systems. Developing EU Structures The EU was reluctant to adopt a WMD Strategy based on a Common Position, a Joint Action or a Common Strategy, the legal instruments available under the CFSP. Consequently, the Strategy is a political declaration with an informal character. Concern that this would undermine implementation was offset by the commitment to review policy impact regularly. In addition, every six months, the External Relations Council discusses a progress report on the implementation of the EU Strategy. In terms of implementation, the EU Strategy calls for the establishment of a specific unit within the Council’s Secretariat to reinforce the present arrangements.33 This unit, as agreed in the European Council of Thessalonica of June 2003, would function as a monitoring centre – entrusted with the monitoring of the consistent implementation of the EU Strategy and the collection of information and intelligence – in liaison with other EU agencies (i.e. the Situation Centre) and as a full associate of the Commission. The creation of the Centre, not yet put in place, confronts two specific problems. First, the EU reform process would lead to a new structure where a single foreign minister, also Vice president of the Commission, would be in charge of foreign affairs

33 In October 2003, Javier Solana appointed Ms Annalisa Giannella as his Personal Representative in charge of the Non-proliferation of WMD. In addition to this, the Council machinery dealing with the implementation of the EU Strategy includes three Working Groups acting under the CFSP pillar: CONOP (non-proliferation), CODUN (on UN Disarmament issues) and COARM (on conventional arms exports). These all include representatives from Member States, the Commission and the Personal Representative, and meet once a month.

84


and external relations.34 Second, the functions finally assigned to this monitoring centre could affect specific Community competencies, currently in the hands of the European Commission. None of these problems counter-indicates the convenience of establishing such a centre, which certainly would improve coordination not only between the Council and the Commission structures, but also with and among the Member States themselves (Gianella 2005). In the meantime, on December 2006, the Council endorsed a concept paper establishing a cooperative working method which allows the Council Secretariat/ HR, the Commission services, and Member States to work together in several areas of implementation of the EU Strategy. The aim of the paper is not to create a new structure or a new Agency, but to endorse and make official a working method after a practice acquired over three years of work.35 Conclusion The EU Strategy against WMD proliferation is clearly grounded in the EU heritage of the rule of law, multilateralism, economic and political pressure on third States, a focus on the political causes of international problems, and international cooperation. Thus, it does not reflect any revolutionary change in European policies or actions. In this sense, the Strategy represents a ‘European way’ for approaching this ‘renewed classical problem of international peace and security’ through mixing traditional tools of international law with new policy instruments. This policy mix is reflected in how Europeans diagnose the threat as well as in EU objectives and action plan. The EU linking of WMD to international terrorism gives the proliferation problem a ‘new dimension’, but this approach is expressed as concern, not alarm. The EU has not launched a ‘war against terrorism’ (with or without WMD) even though it recognizes the risk that terrorists will acquire WMD. Indeed, the EU structure explains the reliance on the State to diminish the risk of terrorism. Moreover, European experience with terrorism since the seventies may also explain EU particularities of tone, attitude, and strategies. Given this background, it is not unusual that EU documents consider international terrorism very differently than the current US Administration. Most important, the European experience leads to a preference to use anti-criminal policies to fight terrorist organizations. Obviously, there are differences among European States, but the EU process synthesizes them into a specific policy orientation focused on prevention, intelligence gathering, judicial action, and police investigation, both within countries and through international cooperation. Is the EU Strategy effective? As compliance is the responsibility of each State, effectiveness means making positive contribution to the general goal of WMD non34 The two negative referendums in France and Holland have generated a crisis concerning the future of the European Constitution. Nonetheless, almost everybody agrees on the necessity that some of its innovations should put in practice. The creation of a single Foreign Minister/Vice President of the European Commission is one of the chief innovations. 35 See Council of the EU, ‘EU Strategy against the proliferation of WMD: Monitoring and enhancing consistent implementation’, Brussels, 12 December 2006 (Doc. 16694/06).


85

proliferation, through assisting in reducing or eliminating WMD programs and stockpiles and helping to diminish the risk of dispersion of WMD products and related materials. From this point of view, it is possible to assess that the European Strategy is effective, because it makes a real and important contribution to both the elimination of WMD, and the reduction of the diversion risk. EU action focuses on assistance programs to third countries helping to reduce/eliminate WMD stockpiles and to improve control of dual use products and technology. Additionally, EU action tries to be coherent with the concept of effective multilateralism: when there is an international agency with a mission in a specific WMD regime, EU acts through these agencies, giving them political and financial support and cooperating with them in the implementation of projects of assistance to third countries. But these successes do not exclude some obvious weaknesses of EU policies. It is urgent that the EU increases its financial support of international action to secure WMD stockpiles and destroy them. As well, the EU has to improve its activities in the biological field, as this area represents a gap in the EU fight against proliferation. Even more crucial is to improve coherence. If the EU wants to maintain the credibility of its ‘effective multilateralism’, Member States must agree on measures to reinforce international regimes, organizations and agencies (i.e. BTWC) competent in this field and the reinforcement and credibility of the NPT must become a central pole of EU action. The case of Iran provides a good example of both the effectiveness and weakness of the EU nonproliferation policy. The EU action has been effective because it has permitted during a period of time, the suspension of dangerous – but not illegal – activity, keeping the issue under the IAEA control. However, the EU action was not enough. Certainly, several factors make the Iranian proliferation program an international issue: the regional crisis in the Middle East, with the Israel-Palestinian Peace Process, and the Iraq conflict as major focus for attention, are the main examples. But even more crucial, European action is stagnating, if not regressing, at the very moment when unity is needed more than ever. EU members must find (again) the way to act jointly and with determination to prevent the two worst developments in Iran: war and nuclear armament. Finally, there are two other axes where the EU should increase its emphasis: disarmament and the international transfer of dual use products and technology for peaceful application. The EU intergovernmental cooperation through the existing CFSP structures should lead to common proposals on nuclear disarmament that could encompass other European initiatives leading to the destruction of the chemicals and biological stockpiles of third countries. Besides, one should not forget that international transfer of products and technology of dual use involve peaceful uses and the right of developing countries to acquire them, while export control measures can have negative effects on this right. If developing countries find limits to their legitimate goals, they will be more reluctant to cooperate in fighting against proliferation. The fight against proliferation of WMD has to consider all these issues in order to be effective. Otherwise, there will be a new line dividing the international community of the 21st century.

86


References Allison, Graham (2004). Nuclear Terrorism: The Ultimate preventable Catastrophe. New York: Times Books. European Council (2006). EU Strategy against the proliferation of WMD: Monitoring and Enhancing Consistent Implementation. Brussels, December 12; Doc. 16694/06. European Council (2003). Action Plan for the implementation of the basic principles of an EU strategy against the proliferation of weapons of mass destruction. European Council (2003). European Security Strategy – A Safe Europe in a Better World. Giannella, Annalisa (2005). Preventing Proliferation of Weapons of Mass Destruction: The EU Contribution. European Union Committee. House of Lords; 13th Report of Session 2004-2005, April 5, 2005, Minutes of Evidence Kagan, Robert (2003). Of Paradise and Power: America and Europe in the New World Order. New York: Alfred A. Knopf. Quille, Gerrard and Stephen Pullinger (2003). ‘The European Union: Tackling the Threat from Weapons of Mass Destruction’. ISIS Report, November 2003 (http: //www.isis-europe.org/, accessed on July 1, 2005). Portela, Clara (2003). ‘The Role of the EU in the Non-Proliferation of Nuclear Weapons: The Way to Thessaloniki and Beyond’. PRIF Reports No. 65. Salama, Sammy (2004). ‘Was Libyan WMD Disarmament a Significant Success for Nonproliferation?’. Center for Nonproliferation Studies (CNS), September 2004 (http: //www.cns.miis.edu/research/mideast.htm, accessed on June 15, 2005). Schmitt, Burkard (ed.) (2003). ‘EU Cooperative Threat Reduction Activities in Russia’. Chaillot Paper 61 (June 2003). Schmitt, Burkard (2001). ‘A Common European Export Policy for Defense and Dual-use Items?’, ISS-European Union Occasional Papers, No. 25. Toje, Asle (2005). ‘The 2003 European Security Strategy: A Critical Appraisal’. European Foreign Affairs Review, Vol. 10, pp. 117-133. Tuchman, Jessica (2004). ‘Weapons of Mass Destruction and the United Nations’. Global Governance 10, pp. 265-271.

PART II Enlargement


Chapter 6

A Union of Disenchantment: The New Politics of post-Enlargement Europe Christopher J. Bickerton1

Three years after the European Union (EU) increased its membership by two thirds, from 15 to 25, we can begin to consider how the enlargement process has transformed the EU.2 Whilst numerous analysts have addressed this question, two features of the post-enlargement EU are often underplayed. The first is the rise of political inequality in Europe. Increasingly, structural inequalities between member states are being formalized and institutionalized via a diverse number of arrangements. This is in line with a pre-existing tendency towards fragmentation, what has been called the rise of a ‘two-speed’ Europe, of ‘variable geometry’, ‘co-centric circles’ and Europe à la carte. Yet whilst these developments often reflected political disagreements over the final goals of EU integration, fragmentation today increasingly reflects the peripheral positions of new member states, many of them much poorer than the ‘core states’ of the EU-15. The second feature is the growing political instability experienced across the Union, which has stalled the EU integration process. This is often understood in terms of a clash between East and West, with a particular focus on the virulent nationalism and populism of post-Stalinist regimes. It was this kind of danger which was anticipated by those who saw in enlargement the risk of ‘importing instability’. Moreover, many argue that the instability we have seen in Western Europe states is itself a response to enlargement, and particularly to the Westward emigration of East European workers. In fact, it is the other way around: the political instability in the East mirrors instability in core European states. Violence in Budapest in October 2006 echoed in a more moderated fashion the violence which broke out in France almost exactly a year earlier. The roots of this problem are similar: the disenchantment of domestic populations with national governments and European institutions, both of which appear distant and unable to address local concerns. The enlargement process was a concentrated and condensed process of Europeanization, resulting in a growing separation between government and society in new European member states. This resembles 1 This chapter is a much reworked version of a paper presented at the 2005 British International Studies Association (BISA) conference in St Andrews, Scotland. My thanks to William Bain for convening the panel at BISA, and to all the participants for their comments and discussion. All remaining errors are obviously my own. 2 In January 2007, Romania and Bulgaria joined the EU, bringing the total number of member states to 27. This article focuses on the ‘big bang’ enlargement of 2004.

90


the more drawn out process of integration that core states have undergone since the mid 1980s. These two features of an enlarged Europe interact with each other. The fragmentation of the Union and the deepening of political inequality stem from a combination of enlargement and the pre-existing centrifugal trends within the Union. Such fragmentation only further weakens the legitimacy of the integration process, which in turn fuels the political backlash against the EU. Rather than create greater diversity within the EU, we can say that enlargement has helped draw out an underlying trend of popular disenchantment that transcends the East-West divide. Europe united, perhaps, but not on the terms hoped for by Euro-enthusiasts. Europe After the Enlargement Party There was much speculation leading up to the ‘big bang’ of May 2004 on the impact that the ‘widening’ of the Union would have on the process of integration itself (known as ‘deepening’). Views were mixed: some were positive, others negative. Much of the attention was paid to the dangers of importing stability. In recent months, with violence breaking out in the streets of Budapest and the Czech Republic paralyzed by its inability to find agreement to form a governing coalition, some of the scaremongers have felt vindicated. More optimistic voices had argued that enlargement would be a way of diffusing, rather than importing, instability (Friis and Murphy 1999). They have cited the example of Polish mediation in the Ukrainian ‘Orange Revolution’ as an example of how the weight of the Union, when put behind new member states, can result in favourable outcomes. Attention was also given to the problem of institutional absorption. One of the Copenhagen Criteria of 1993 addressed this issue: enlargement would only take place if the absorption of new members did not undermine the momentum of the integration process. The EU itself dedicated considerable time and effort to this question, from its inter-governmental summits of Amsterdam and Nice, to its 1997 Agenda 2000 document. Since 2004, attention has remained on absorption, many analysts taking the failure of the EU Constitution in the 2005 referenda in France and Holland as a sign that maximum capacity has been reached and further enlargement should only occur once the EU has reformed its own institutions. Western Balkan states hoping to join the EU in the next few years argue that ‘absorption capacity’ has been introduced as a whole new criterion for enlargement, serving as a convenient excuse for deferring the question of further enlargement (Bickerton 2006). Finally, some argued that enlargement would qualitatively transform the Union, making it into a different kind of ‘beast’. Jan Zielonka has argued that enlargement would deepen and extend the EU’s identity as a ‘neo-medieval empire’, defined by a mixture of overlapping authorities, shared sovereignty and diversified institutional arrangements (Zielonka 2001; 2006). Situating itself within the debate over the consequences of enlargement, this chapter argues that analysts have overlooked the rise of political inequality within the Union. They have also concentrated too much on post-enlargement diversity. What is significant is the way in which enlargement has brought greater uniformity to the popular discontent that exists across the Union today.

A Union of Disenchantment: The New Politics of post-Enlargement Europe

91

The New Inequality That enlargement has introduced new divisions in Europe is a point often made by analysts of European integration. Former US Defence Secretary Donald Rumsfeld famously observed that in the support given by East European states to the war in Iraq, a breach was opening up between New and Old Europe. French President Jacques Chirac added to Rumsfeld’s claims by suggesting that candidate states should chose between Brussels and Washington when taking positions on foreign policy matters. Such events augured badly, suggesting that once the EU’s membership had grown to 25, it would be impossible for the continent to achieve any geopolitical unity. For Stephen Haseler, an enlarged Europe – in conjunction with events such as the Iraq war – has placed the necessity for a core FrancoGerman Europe firmly onto the agenda. He imagines that a new ‘Charlemagna’, composed initially of France and Germany, can realize the EU’s geopolitical ambitions (Haseler 2005: 98). Ian Buruma writes of a division between seafaring lands (Britain, Atlantic coast France, Hamburg and the Hanseatic League) and a Europe ‘of the interior’, stretching from Paris to Brussels, across the Rhine valley to Berlin and south to Munich and Rome (Buruma 1999). What is missed in these attempts to identify some underlying cultural or geopolitical difference is the rise of what is termed here the new political inequality. The process of EU integration has always occurred unevenly, a consequence of the diverse interests and powers of individual member states. The history of integration presents us with a clash between supranationalism and intergovernmentalism. Functionalists and neofunctionalists have placed the emphasis on integration ‘beyond the state’. Intergovermentalists have stressed the agency of the state as the central explanatory dynamic behind integration. These different approaches have been tied to a parallel tension around the equal representation of states versus peoples. Originally, formal equality was enshrined in the Treaty of Rome: states were signatories to the treaty, and equally shared the right to renege from the treaty. Moreover, they shared voting rights in intergovernmental fora. Intergovernmental integration therefore tended to enshrine the formal political equality of states in the treaty-setting of EU integration. Yet this set of formal rights coexisted alongside very different ‘power political’ considerations. West Germany sought above all to pursue the Community route to integration, so that its own interests could be constructed in terms of the wider ‘European interest’. The smaller states of the Union, such as the Benelux states, also opted for Commission-led integration, since any intergovernmental forum, such as the European Council, saw the voices of smaller states drowned out by the considerations of the more powerful states like France and Italy. France pushed itself forward as defender of intergovernmentalism, which was in the eyes of many merely a façade for Gaullist pretensions to creating a ‘French Europe’ more than a European France. This confusing mixture of supranationalism and national interest politics continues to this day. A definite feature of the above, however, was a resistance to any formalization of the manifest inequalities that existed between member states. Any constitutional changes that did occur were the fruit of inter-state bargaining.

92


No state, however small, accepted a politics of the fait accompli, where relations of hierarchy within the Union were imposed upon states. Today, enlargement has quickened the move away from this model of formal equality between member states. Most importantly, new member states are expected to accept, without the chance of any compromise, an inferior status within the Union. This might not be apparent at first sight: enlargement, after all, forced leading EU members to exchange their right of having two commissioners for the right to have only one. However, enlargement has also created new institutional divisions between member states which did not exist before.3 Many of the new member states have considered such differences a sign of inferior, second class citizenship. In the run up to May 2004, disappointment in new member states at the deal which they had managed to secure was considerable. As a sign of frustration, when the French president criticized new member states for supporting the 2003 Iraq war the Eastern European press accused the French president of espousing a moribund Stalinism, comparing his remarks to the famous doctrine of ‘limited sovereignty’ articulated by Soviet leader Leonid Brezhnev in 1968. These same sentiments were expressed in the debate on the 2007-2013 budget that was had in late 2005. In the proposals made by the UK, as acting presidency of the EU, the new member states were to receive less money than had been promised. New member states, it seemed, were paying the cost of the recent constitutional crisis in Western Europe. Disappointed at the conduct of the EU’s more powerful members, the Estonian prime minister at the time argued at the time that, We have reasonable expectations to receive from the EU what we were promised when we joined. The new member states were told they will receive a certain amount of aid money, and now we hear cuts to this. We cannot agree to this (BBC News, 6 December 2005).

In the words of a BBC report on the UK budget proposal, ‘if this were a soccer match, a collective groan of “We woz robbed” would go up from the Eastern European terraces’ (BBC News, 2 December 2005). Labour Market Restrictions When the EU membership perspective was first offered to Eastern European states, it was expected that they would be granted the same rights as existing member states.4 This would mean incorporating them into a space where there was a right of free movement for goods, services, capital and labour. Yet seven out of fifteen member states declared in the run up to accession that they would maintain labour 3 An exception to this is Britain’s withdrawal from the Social Chapter in 1992. However, as argued in the text, such derogation was based on a state’s right to withdraw from or not commit itself to various aspects of integration. New member states have had their access to various pan-European regimes determined independently of their wishes. 4 In John Kampfer’s words, ‘The bottom line for all [candidate states] was reciprocal access to the rest of the EU for the Union’s 73 million new citizens. They did not expect that all 15 members would impose restrictions (although Britain’s hasty response has been to restrict welfare rights but not work)’. See Kampfer 2004.


93

market restrictions. The UK at the time was one of the few countries that decided not to impose any restrictions. As May 2004 drew closer, the UK did introduce some restrictions regarding access to welfare allocations, but not restrictions on the right to work (Financial Times 4 February 2004). Since 2004, there has been a shift in the UK towards greater restrictions, in response to the unexpectedly large number of migrants that have arrived, mainly from Poland. When the EU Commission declared at the end of September 2006 that Romania and Bulgarian would both join the EU at the start of 2007, the UK responded with a ‘managed migration’ scheme in place of its open door policy of 2004. The UK restrictions for Romania and Bulgaria are complex. Only food processing and agricultural sectors will be open to low skilled migrant workers, with around 20,000 places available. Those with specific work permits and who enter as part of a programme for highly skilled labour will be allowed to work, and students can work part-time. Individuals wanting to set up their own businesses will also be allowed to do so. For all others, access to the UK will be as tourists, without the right to work (BBC News 24 October 2006). Alongside these new restrictions by the UK, four other regimes of labour movement exist, all imposed with varying time scales.5 These different regimes are listed in the table below.

Table 6.1

Transitional labour market restrictions for new member states (NMS)

Type of regime

EU Member State

Restrictive immigration regime (NMS Belgium, Finland, Germany, Greece, citizens have no more rights than non-EEA France, Luxembourg, Spain citizens). Main channel of entry is family unification. Restrictive regime plus quota for new Austria, Italy, Netherlands, Portugal member states Restrictive regime plus quotes and some United Kingdom for Bulgarians and derogations for specific groups (e.g. those Romanians, starting January 2007 wanting to set up a business) Ireland, United Kingdom General access plus limits on welfare. Work and residency permits are only granted if certain requirements concerning working conditions and wage levels are met. No restrictions or derogations Sweden Source: European Citizen Action Service; Boeri and Bruckner 2005.

5 The maximum time scale is seven years. The model is of two plus three plus two years. The minority Swedish Government did propose to issue residency and work permits to only those workers from new member states who could prove that their jobs met national wage agreement requirements. The proposal was over-ruled in parliament. See Boeri and Brucker 2005.

94


Unsurprisingly, restrictions on the movement of labour has been viewed as a way of introducing second class membership for new member states, making them into what John Kampfner has called ‘second class allies’. Pointing to these restrictions, the Czech newspaper, Lidove Noviny, observed that ‘just a few years ago Czechs believed that joining the EU, they would become fully fledged Europeans. Now it is obvious that was just an illusion … Czechs will feel like ‘second class’ citizens much more than they used to’ (Kampfner 2004). Observing celebrations in Hungary on 1 May 2004, BBC correspondent Nick Thorpe pointed out that ‘Hungary goes into the European Union with high hopes, but many fears as well. There is a sense that the new members are not being treated on an equal basis’ (BBC News, 1 May 2004). Questioned about EU membership in September 2006, Bulgarian Prime Minister Sergei Stanishev stated clearly that the mere fact of membership was different from a more meaningful integration into all of the EU’s structures. In his words, ‘it is important not only that we formally join the EU – although this is a historic event... the final fall of the Berlin Wall for Bulgaria – but it is equally important how Bulgaria’s economy will integrate [into the EU] ... how we will implement Europe’s social model’ (BBC News, 26 September 2006). One of the main reasons why such labour restrictions did not provoke more of a backlash in Eastern Europe has been the relatively benign economic situation that has followed the May 2004 enlargement. Economist William Buiter has remarked that earlier free trade agreements had not exhausted Eastern Europe’s trade potential as ‘quite a few people were willing to make the necessary investments only when these countries were in the EU’ (Economist 26 November 2005). Katinka Barysch, chief economist of the Centre for European Reform (CER), notes that there were improvements in those sectors that have been most vocal in their opposition to enlargement. In agriculture, ‘export growth, strong domestic demand and farm subsidies led to a doubling of farm incomes in the Czech Republic, a 75 per cent increase in Poland and a rise of 50 per cent in the Baltic countries’ (Barysch 2005). This positive economic outlook makes for a more stable political situation than would otherwise have existed. But there is no guarantee it will last. European Monetary Union Another source of differentiation between old and new member states is the European monetary union (EMU). For the EU-15, EMU was optional, and some member states, such as the UK, decided to opt-out. Presently, the UK, Sweden and Denmark are the three EU member states outside of the Eurozone. In contrast, for new member states, EMU has been mandatory. This has forced countries to plan for EMU, regardless of whether joining the single currency is the optimal decision for a country seeking to catch up with Western European economies.6 The table below sets out the target dates for the new member states.

6 For the suggestion that EMU is not in the economic interests of new member states, see ‘Perils of convergence’ The Economist 3 April 2003.


Table 6.2

Target dates for European Monetary Union for new member states

Country Czech Republic Estonia

Target date for EMU 2010 1st January 2007

Date of ERM II membership – June 2004

Cyprus Latvia Lithuania

2008 1st January 2008 1st January 2007

May 2005 May 2005 June 2004

No target date1 – 2008 May 2005 No official target date Slovenia 1st January 2007. June 2004 Confirmed by the EU Commission in June 2006. Slovakia January 2009 – Source: EU Commission Staff Working Paper 2005 Hungary Malta Poland

95

Exchange regime details – Currency board since 1992

$-based currency board established 1994. Converted to Euro-peg in 2002. – – – –

–

Note: 1 Hungary had set itself the target date of 2010 to join the Euro. Recent budgetary problems by the government have forced it to drop this target. In its Convergence Programme submitted to the EU in September 2006, there was no target date included. See Portfolio.hu, 9 November 2006

As is clear, these dates differ widely. Some states have made EMU a political priority, seeing it as the final stage in full integration into the EU. Other states have balked at the economic requirements, which include keeping the national currency within a pegged exchange rate system (ERM II) for a minimum of two years, and meeting the ‘Maastricht rules’ of price stability and sustainable government finances (both government debts and deficits). In the case of Poland, for instance, no target date for adoption of the Euro has been set. The new government has declared its intention to hold a referendum on the issue of EMU, a view which has been opposed by the EU Commission and other member states. Adoption of the Euro is mandatory, and it is feared that public discontent would produce a No vote, which would make subsequent entry into the Eurozone difficult. The outcome of this mandatory but delayed membership of EMU has been to introduce new divisions between laggards and forerunners. Slovenia and Estonia are at the forefront, with Poland, Hungary and the Czech Republic lagging behind. In June 2006, the EU Commission formally accepted Slovenia’s demand to join EMU, making Slovenia the first country of the 2004 batch of new members to adopt the common currency (BBC News, 15 June 2006). What is significant is that new member states were faced with EMU as a condition for EU membership. Giving up control over monetary policy, and conforming to a set of fiscal rules, was not the result of inter-state bargaining; it was part of the integration of these states into the procedures


96

and mechanisms of European governance. Signature of the 2004 Accession Treaty was thus the final stage in a protracted process of regulatory harmonization, coming only once candidate states had taken on board all the EU’s acquis. This contrasts with the model of discrete decision-making and ‘diplomatic bargains’ which had been a feature of EU integration in the past and which had also figured in previous accessions where states had been offered many more derogations and flexibility. Schengen A third source of discrimination between old and new member states is Schengen. Once again, full participation in Schengen is mandatory for new member states. This contrasts with the opt-outs negotiated by both the UK and Ireland. In Heather Grabbe’s words, the integration of Schengen into the institutional framework [of the EU] has resulted in special arrangements for 3 EU member states (Denmark, Ireland and the UK) … However, candidate states are not being offered the opportunity to negotiate similarly flexible arrangements; the European Council has made it clear on several occasions that new members will not be allowed opt-outs or other forms of flexible integration (Grabbe 2000: 525).

Whilst new member states have signed the Convention that applies the Schengen Agreement, full implementation has been divided up into two phases. These are set out below.

Table 6.3

Integration into the Schengen ‘space’

Phase First phase (on accession, May 2004)

Second phase (by 2007)

Requirements Checks and controls at external frontiers of the EU Common policy towards third countries regarding visa requirements Rules for crossing external frontiers Policy and customs cooperation Anti-illegal migration and organized crime measures SIS II be made operational Existing member states all support integration of state into Schengen (positive peer review)

Source: EurActiv

One of the main hurdles has been SIS II, an updated version of the original SIS. The SIS was designed for use by a maximum of 18 states, and was developed in the context of technology which has since become obsolete. SIS II is thus an updating of the existing information system, and its adaptation to the requirements of an EU with 25 members. The significance of Schengen, and the sense of discrimination it generates, comes from the role played by immigration and asylum issues in the accession process,


97

and in relations between the EU-15 and Eastern Europe in the post-1989 period. One of the reasons for the delay between the signing of the Schengen agreement in 1985 and its eventual ratification in 1990 was the concern about the strengthening of external borders, as a key condition for abolishing internal borders. The concern of countries such as Germany was that the abolition of internal borders would make it the prime target for migrants. In response to this, Germany developed the ‘first host country’ principle, enshrined in the 1990 Dublin Convention. This stipulated that illegal immigrants were the responsibility of whichever country they first arrived at. To this principle was added the ‘safe third country’ principle, which stipulated that illegal immigrants were the responsibility of the first ‘safe’ country into which they entered (Lavenex 1999). The goal was to make Eastern European states into safe third countries. This was done by signing readmission agreements with these countries, in exchange for financial assistance directed at securing the Eastern border. By 1995, Germany had for instance invested over 2 million DM in general border equipment in CEE states, namely Poland. Germany’s bilateral TRANSFORM program, originally intended as support for transition to democracy, was gradually earmarked for border-related programs (Bickerton 2003: 48). Along with being made into a buffer zone for immigration, the Schengen agreement was also integrated into the acquis communautaire, making it part of the Justice and Home Affairs component of the accession negotiations. This presented candidate states with a variety of contentious measures over which there was no room for negotiation, such as visa regimes. These regimes ‘have been presented as non-negotiable (because they are in the first pillar) so the applicants will have to abolish the visa-free regimes currently operating with their Eastern and Southern neighbours which remain on the EU’s visa ‘black-list’ (Grabbe 2000: 526). Such mandatory demands made clear to candidate states their dependent position vis-àvis the EU. On border issues, Richard Bernstein reported in March 2004 that ‘the mood in Poland seems to be less one of unmitigated joy at the prospect of joining the rest of Europe and more a sense of gains measured against losses – gains with the West, losses with the East’. Three years since enlargement, new member states continue to have complex relations with the Schengen space. Put in the context of earlier readmission agreements and the controversies over visa regimes, Schengen remains a source of tension between old and new EU member states. That this will continue with future enlargements is likely. Goran Svilanovic, former foreign minister of Serbia, noted sardonically that not all the bricks from the Berlin Wall are in museums; some are being used to build a new wall today dividing countries like Serbia from the rest of Europe (Bickerton 2006). Political Instability East and West Pierre Moscovici, former French minister for Europe and currently Vice-President of the European Parliament, recently published L’Europe est Morte, Vive l’Europe!, a title which illustrates the problems currently faced by the EU integration process. The collapse of the EU constitution added to a wider sense of political instability across Europe. The Dutch No vote came on the back of a growing crisis of social integration.

98


The murders of politician Pim Fortuyn and film director Theo Van Gogh have led to an unravelling of the renowned Dutch model of multiculturalism (Buruma 2006). A few months later, France saw thousands of cars burnt in a series of riots across the country’s suburbs (Baudrillard 2006). 2005 was also the year when German politics reached a stalemate: the Christian Democrats and Social Democrats failed to win decisively the September election, leading eventually to a ‘grand coalition’ under the leadership of Christian Democrat candidate Angela Merkel. Similar electoral wrangling beset Italy in its 2006 general elections. The Socialist candidate, Romano Prodi, was declared the winner with only the smallest of margins, and for a time it seemed as if outgoing Prime Minister, Silvio Berlusconi, would contest the results. Anatole Kaletsky, writing for The Times, captured the dominant mood of pessimism: All three of the great European nations that have dominated the Continent’s history for 2,000 years – Germany, France and Italy – are effectively leaderless. They will almost certainly remain politically paralysed at least until the French presidential election of 2007. The power vacuum now covering the whole of continental Europe is almost unprecedented, at least since the disastrous period between the two world wars (Kaletsky 2005).

Such political stalemate is mirrored in the new East European member states. The Czech Republic had parliamentary elections in June 2006, which left the country deadlocked. A minority government was finally put in place, led by the Civic Democrats, that fell after losing a confidence vote in October. Mirek Topolanek, leader of the Civic Democrats, has ruled as prime minister of a caretaker government since October 2006. The violence in Budapest in October 2006 was widely reported, and labelled the Goulash Revolution by western commentators. Sparked off by a revelation that the ruling Socialist Prime Minister, Ferenc Gyurcsany, had purposefully lied during the last elections in order to retain power, the violence was blamed on far right nationalist movements in Hungary. In Poland, the rise to power by the Kaczynski brothers has been viewed with concern by many in the EU. The brothers have pushed a strongly Catholic and nationalist agenda, with a focus on ridding Poland of its ex-communist political and bureaucratic elite. The Financial Times (FT) reported in August 2006 that the Kaczynskis were undertaking a ‘purge’ of the Polish state, the FT journalists using language that associated contemporary Poland with the pre-1989 regime. A common perception of the above is that such instances of political instability are unrelated. On the side of East European states, we can observe the distance these countries have yet to travel before they can fully assimilate the EU’s values. The liberal European press was critical of a Polish Government that relied upon the ultraCatholic League of Polish Families and the ‘populist’ Samoobrena (Self-Defence) for its parliamentary majority. The French liberal daily, Le Monde, warned that Rather than encouraging the reflexes of a public opinion all too often allergic to the democratic traditions of Europe, we expect from the Polish leaders that they assist their population to come closer to political Europe, to its rules, its principles. EU membership grants rights, but also confers duties (Le Monde, 12 November 2005).


99

Hungary’s violence was reported as an atavistic residue of its nationalist past (Furedi 2006). In Western Europe, the problems are understood differently. They are the consequence of managing the diversity of contemporary European societies. Whilst populist forms of nationalism may assert themselves in the East, in the West the struggle is to reinvent a more inclusive national identity that can accommodate diversity. In truth, the political instability East and West have common roots. In the East, we can trace some of the present instability back to the enlargement process itself, and its impact upon state-society relations in post-communist states. In the West, we are seeing a reaction against EU integration, which illustrates a deep-seated problem which EU institutions face when trying to connect with domestic populations in Europe. Both East and West, the problem is the low levels of legitimacy that exist for both pan-European and national governing institutions. Enlargement has united most of Europe, but it has created a Union of disenchantment. EU Enlargement and Problems of Political Instability It would be a mistake to tie all the current political problems of the new EU member states to the process of enlargement. In many ways, enlargement acted upon and deepened existing trends. Most significant amongst these trends was an indigenous process of depoliticization, the result of the pre-1989 period. Ekiert and Hanson sum up the legacy of 1989 in their reference to ‘a general public cynicism regarding professions of ideological faith, (Ekiert and Hanson 2003: 27). Elster, Offe and Preuss point out that in Eastern Europe in 1989, ‘there was no counter-elite, no theory, no organization, no movement, no design or project according to whose visions, instructions and prescriptions the breakdown evolved’ (Elster et al. 2002: 11). State socialist systems were not overthrown in 1989, but rather collapsed, leaving a political vacuum which post-1989 political parties have been trying to fill since. The most successful have been the pragmatic ex-communist parties, able to transform themselves into vote-winning machines (Grzymala-Busse 2003). However, the absence of any organic social base for these new parties imparted to post-communist politics considerable instability. Incumbents are rarely voted back into power, generating a high political turn over labelled ‘feckless pluralism’ (Carothers 2002). Such instability made the prospect of EU membership particularly attractive. It gave political parties a firm programme around which they could situate their policies and strategies. As a result, the enlargement process was marked by crossparty consensus on the necessity of EU membership. This consensus is referred to by some analysts as the ‘tipping point’, where enlargement and its obligations are no longer contested, but rather serve as the accepted backdrop for more minor political squabbles (Vachudova 2005; Knaus and Cox 2005). The downside of such a consensus is the demise of meaningful political contestation. Any serious challenges to the status quo are tarred with the brush of anti-Europeanism; in the words of Grzymala-Busse and Innes, the non-negotiable nature of the accession process has ‘eradicated both detailed and ideological debates over many areas of public policy’

100


(2003: 64). Grzymala-Busse and Innes go on to note that this pro-European consensus served to inhibit the political development of candidate states. In their words, The effort to plough through reform blueprints in all the core public policy areas of the modern state resembles a form of dependent development, to the point of precluding the ‘organic’ development of accountable domestic institutions, and of public debate over the substance of potential alternatives to the EU’s regulatory model (2003: 66).

Pushing political opposition to the margins has had a severe impact on politics in East European states. Rather than operating in a vertical manner, where social interests are aggregated upwards through forms of political representation, politics takes on a horizontal form: political élites agree on a programme, which they try to push through over the heads of either recalcitrant or quiescent populations. Under such circumstances, political parties do not develop close ties with their societies. This was demonstrated in Gyurczany’s highly instrumental approach to elections in Hungary: they were a hurdle to jump, at any cost, which would then give him the freedom to pursue his planned course of action. It is of little surprise that when he was faced with rioters outside the Hungarian parliament building, most vocal in his defence were European parliamentarians and officials – those with whom he had had the closest contact over the last few years. This evokes a comment made by the Czech negotiating team on EU accession. At the end of the negotiations, a negotiator on the Czech side expressed disappointment that accession was over. It would be, he reportedly said, much more difficult to push through reforms without the EU’s help. Without the sword of EU membership, like the sword of Damocles, hanging over the heads of domestic populations, governing has become more difficult. Politicians across Eastern Europe are struggling to establish any real social consensus, having been able to rely upon external support for so long. Weak political parties and underlying political consensus on the subject of reform has unsurprisingly impacted upon the institutional development of East European states. Two key developments are worth emphasising, as they relate to the current problems of instability. The first is that without any need for political contestation, enlargement-related reform was treated as a technical programme, to be conducted by experts, implemented by fiat, or at most by a rubber-stamping process undertaken by the parliament. Associating enlargement with expertise meant that in the course of the accession process, negotiations were conducted by an expanded executive, at the expense of the national parliaments. Heather Grabbe called this the rise of ‘islands of excellence’ within candidate state bureaucracies, which were responsible for the enlargement process. This channelled resources away from government departments, and often resulted in EU-related matters taking priority over the more basic tasks of government. This elevation of the executive over the legislature appeared to indicate a shift of power to the former. However, without close ties to elected representatives, the executive often found itself weakened. Attila Agh notes, in the case of Hungary, that in 1999 the country ‘cannot yet adequately present and represent its national interests at the negotiations, since on the Hungarian side there is too small an elite team of negotiators, without enough assistance from the large group of [elected]


101

representatives who could channel the particular interests of social strata into the national interest’ (Agh 1999: 851). Contemporary instability comes from the fact that governments in Eastern Europe are no longer able to rely upon the authority of Brussels to push through their reform initiatives. They are forced to govern on the basis on their own domestic authority, which is weak given the low levels of public support and public involvement in national political life. The weakening of national parliaments has been the second key development. This was seen most vividly in the various ‘fast-tracking’ measures introduced by candidate states in the late 1990s. These measures were developed in order for governments to meet the huge legislative demands of accession. Rather than deliberate and debate proposed laws and amendments in the parliamentary chamber, they are passed using these ‘exceptional’ measures, without any discussion. Malova and Haughton argue that fast-tracking undermines the development of proper parliamentary procedure, and eventually inhibits the institutionalization of democratic norms. Parliamentary committees, that serve to scrutinize legislation, are side-stepped, limiting the opportunities for political bargaining and cross-party cooperation (Malova and Haughton 2002: 112). The function of parliament as a deliberative body, re-enacting through elected representatives the deliberations and conflicts that structure the social body as a whole, is thus lost. Another important consequence is that such a side-stepping of the legislature inhibits the implementation of new laws. A striking example of this is given by Kristi Raik in her account of the impact of enlargement upon Estonian democracy. Raik’s key finding was that the Estonian public dealt with the upsurge in new regulations from Brussels much in the same way as it had dealt with Soviet-era regulation. In Raik’s words, Estonians employ the tool of ‘doublethink’, which means doing one thing, but believing another. In this case, laws were complied with, but only in a tokenistic and superficial manner. Raik explains that this was the result of a disappointment with the EU itself: rather than appearing as an inspirational political project, it presented itself as a system of rules and regulations. Political Instability in ‘Core Europe’ Many of these problems and themes are reflections of existing trends within the Union. These trends are the result both of the form that integration has taken over the last twenty years, and the problems that the EU has faced in trying to legitimize an expanding role in the domestic affairs of member states. On the issue of cross-party consensus over Europe, we can note a similarity with the Eastern European experience. There was a particular period in the history of European political parties where much of the resistance to EU integration came to an end. This coincided with the collapse and failure of many national strategies for political and economic renewal. Such failures pushed political elites towards Europe, as the easiest way in which they could transform such failures into a more positive programme of ‘Europeanization’. Examples of this abound, from France, to Spain, Italy, and Scandinavian countries. Most well-known is the u-turn made by French President Francois Mitterand in the early 1980s. From a national programme of Keynesian economic medicine promised in 1981, Jacques Delors declared famously

102


in October 1983 that ‘Our only choice is between a United Europe and decline’. This is not to say that France had not been involved in European integration before 1983, or that its sense of its own exceptionalism entirely disappeared after this point. Rather, 1983 was a turning point of sorts, signalled by a manifest failure of nationalist strategies of renewal. Consensus rested upon an exhaustion of alternatives. Other examples of a ‘turn to Europe’ reflecting a national disenchantment exist across the continent. In Italy, Italian political analyst Indro Montanelli commented on the European vocation declared by Italy’s political élites in the early 1990s: ‘ours is a servile race, incapable of self-government, which is looking to Europe for salvation’. The contrast between the above and intergovernmental theories of integration is clear. Rather than seeing the forward movement of integration in terms of an assertion of national priorities, integration from the 1980s onwards has tended to reflect the weakness of national governments. They have turned to Europe after having been unable to successfully pursue their own national programs. This has important ramifications for the legitimacy of the EU. In the past, when the intergovernmental logic was more self-evident, the EU could be legitimated indirectly, through the authority of the member states. As Beetham and Lord argue, in the case of international organizations, It is not the direct cooperation of ordinary citizens that is required to maintain the authority of the United Nations, of GATT, of NATO etc., but that of the member states and their officials; and it is for the behaviour of these alone, therefore, that considerations of legitimacy are important (1998: 12).

However, if it is a prior loss of authority by nation-states that has motivated their ‘turn to Europe’, this makes it difficult for the EU to be legitimized via member states.7 Instead, the EU needs its own ways of generating legitimacy, and the only one it has developed is that of technocratic legitimacy, a ‘Europe of results’ to use Tony Blair’s phrase. The key difference is that once competences have been transferred to the EU they are no longer the subject of public contestation. This transfer indicates that such issues can be decided by non-accountable bodies of experts, rather than through a process of public deliberation. A perfect example of this is the European Central Bank: with the power to determine interest rates, the Bank is made up of economists rather than politicians, and suffers no interference by the latter in its decisions. Monetary policy, a highly contested economic lever in previous decades, has become in Europe an entirely technical matter. What marks the shift of competence from the national to the EU level is the understanding that such powers are best left in the hands of experts, rather than exposed to the populist instincts of national politicians. Under such circumstances, legitimation becomes

7 This can help explain why the power of the Commission has appeared to wane in recent years. Since Commission members are nominated by states, their authority does rest upon the authority of member states. If the latter are weakened, so the Commission will be weak and will lack legitimacy. The Commission may exist separately from nation-states, but its only connection to European populations is through member states.


103

a matter of results, of outputs, rather than of authorization on the part of citizens themselves. What we have seen in the last decade is an expansion of the powers of panEuropean institutions, but without the requisite expansion of legitimacy. For an increasingly political Union, legitimation by results is no longer sufficient. In Beetham and Lord’s words, ‘technocratic legitimacy’ models are ‘inadequate to the political character of the EU’s decision-making’ (1998: 22). Hansen and Williams note that the EU’s ‘legitimacy crisis’ can be ‘traced to the fact that the growing supranational character of the EU has made it increasingly difficult to represent the institution in terms of objective economic efficiency’ (1999: 234). Yves Mény has also written that ‘the growing dissatisfaction with democracy, particularly in Europe, is the result of the continuing expansion of the constitutional pillar to the detriment of the popular one’ (cited in Zielonka 2006: 129). The gap between the powers of the EU and the powers of European citizens over the Union has grown, giving rise to concerns about the ‘democratic deficit’. For a number of years, the solution was understood to lie in institutional revisions of the EU: strengthening the European Parliament, increasing the transparency of European Council meetings, revising the voting methods in the Council, and most recently Valéry Giscard d’Estaing’s ‘two presidents model’ that was debated at the Convention – a president for the Council and a president for the Commission. Some of these strategies contradicted each other, raising questions about the formal equality of member states versus greater equality based on the population sizes of member states.8 As Stephen Haseler puts it, what was most difficult for those participants in the Constitutional Convention was agreement on ‘what is a majority?’ in the Council (2005: 109). However, in recent years many have come to realize that an institutional fix cannot be sufficient to address the EU’s problems. They lie at a deeper level. This has been recognized by a number of authors who point to the legitimation deficit in the EU and the need to resolve it through the creation of a European political identity or European ‘myth’. In other words, a more political Union must be legitimized through more political means. Hansen and Williams note this shift when they observe that Scholars and politicians who diagnose the current crisis in [legitimacy] terms direct attention to the relationship between governments and the EU on the one side, and the electorates on the other, not, as has normally been the case in European integration studies, to intergovernmental relations. This construction of the crisis turns the discussion towards

8 Beetham and Lord view this as a clash between direct and indirect forms of legitimacy. The Council of Ministers has only a weak connection to national parliaments since its meetings are conducted behind closed doors. The Commission is only weakly connected to the European Parliament. If the Commission were to be made more accountable to the Parliament, in the name of direct legitimacy, then the indirect legitimacy of the Council of Ministers would be undermined since they would agree on policies, then would have to implement ones that had subsequently been modified by the European Parliament via its control over the Commission. National governments would then be forced to implement agreements which were no longer direct outcomes of their own participation in negotiations. For Beetham and Lord, these kinds of difficulties mean that the EU can only really manage the dilemmas it faces, rather than solve them in any definitive way. See Beetham and Lord 1998: 30.


104

questions of legitimacy and democracy, and more specifically, asks how improving the latter can alleviate the scepticism towards the EU (1999: 234-35).

The above quote indicates the similarities and parallels between political instability East and West. In both cases, we see that the dividing line is between domestic populations and all governing institutions, be they national or panEuropean; electorates on one side, governments and the EU on the other, as Hansen and Williams observe. The problem ultimately concerns the relations between state and society; at issue is the principle and practice of political representation. For this reason, it is no longer useful to approach the question through asserting a contrast between a Western Europe attached to ‘EU values’, and an Eastern Europe still stuck in the mire of nationalism and populism. The growing disenchantment of European populations now transcends the East–West divide. Future Enlargements What will be the contribution of future enlargements? It is always difficult to speculate, but two points are likely to hold true. The first is that enlargement as process will continue to throw up the political instability mentioned above. The second is that continued expansion exacerbates the EU’s legitimacy crisis. The case of Turkey is the most obvious example: enlargement forces the EU to address the question of its borders, and therefore of its identity. The debate around Turkish membership has exposed the lack of consensus that exists surrounding the EU’s identity, and what common principles and values it should espouse to future member states. Enlargement in the Western Balkans It was argued above that a central feature of the enlargement process was a distancing of the candidate states from their own domestic constituencies, and the strengthening of accountability of candidate states to outside powers. The result was national political élites forging closer relationships with pan-European institutions in Brussels than with their own electorate. This, since 2004, has been an important source of political instability. In the Western Balkans, where all states have either begun official accession negotiations or are hoping to do so soon, we see similar trends in a more exaggerated form. One case in point is Bosnia. Here, the EU has increasingly come to replace the Peace Implementation Council as the main external actor responsible for Bosnia’s political and social development. In this shift from the Dayton framework to that of EU accession, we can see parallels with the recently completed Eastern enlargement. Most obvious is the strengthening of executive institutions. In the case of Bosnia, the attention has been on the Directorate for European Integration (DEI). David Chandler writes that the DEI has ‘become the key executive body of the Bosnian Government, supported in its operational structuring and institutional linkages by funding directly from the European Commission’ (2006: 137). In fact, in order for Bosnia to manage with the vast amount of directives that it is expected to implement from Brussels, the EU has sent civil servants to work as advisors to Bosnian officials, and it has provided


105

technical assistance (Chandler 2006: 140). The shift from the Dayton framework to that of EU membership has only served to weaken further the links between Bosnia’s incipient political institutions and the Bosnian people. David Chandler claims that ‘this transition has take place through informal and unaccountable mechanisms of external regulation, and has been imposed from above without any debate or genuine involvement of the people or elected representatives of Bosnia’ (2006: 125). Something similar has been observed in Serbia, where external involvement has undermined national capacities, and in particular has stripped away from central government much of its authority. The European Agency for Reconstruction (EAR), for instance, was found to have crowded out much domestic state capacity. In the words of one evaluation report of the EAR’s activities in Serbia, ‘the EAR’s current functioning does not yet allow an optimal level of involvement from partners in the project cycle’ (EuropeAid Evaluation Report 2000). This echoes a general problem found with much state-building type interventions: institutional sucking-out, where external agencies find themselves substituting for local capacity in ways that create dependency. PHARE programs in Eastern Europe were found to have a similar effect. In a critical 2004 report of the PHARE program produced by a European consortium, many PHARE projects were labelled unsustainable, meaning that such projects cannot continue once external assistance is removed. Of the Twinning Projects launched under PHARE, where national experts of EU member states work directly alongside local state officials in candidate states, the report stated that ‘unless accompanied by widespread reform in public administration, twinning risks raising structures on very shaky foundations’ (McClements 2004: 25). This is what has happened in Serbia, where a recent SIGMA9 report stated that the country ‘for all intents and purposes … does not have a centre of government’ and ‘there is a lack of strategic focus for the policy system’ (SIGMA 2006: 6). If these are the foundations for future EU membership for the Western Balkans, we can expect many of the same problems of political instability to reoccur when these countries eventually join the Union. EU Membership of Turkey The question of Turkish membership of the EU has left Western European political parties divided, and has revealed the difficulty the EU has in clearly defining an integration project for the twenty first century. Former French president Jacques Chirac, an erstwhile supporter of Turkish membership, has distanced himself in recent months from earlier decisions and statements he made. Most recently, he argued that recognition of the Armenian ‘genocide’ should be a pre-condition for Turkish membership. The new French President, Nicolas Sarkozy, has firmly argued against Turkish membership, whilst Socialist party candidate, Ségolène Royal refused to take a position during the presidential campaign. In her words, she will follow the wish of the French people. This displeased many on the left in France who

9 SIGMA stands for Support and Improvement for Governance and Management, and is a joint OECD-EU initiative.


106

are in favour of Turkish membership. In Germany, the two main parties are split: the Social Democrats in favour, Merkel’s Christian Democrats against. The real confusion, however, lies in the reasons given for or against Turkish membership. In looking at these reasons, it is clear that the issue has more to do with Europe’s own identity crisis, and its difficult relationship with Islam, than it does with Turkey. For instance, those in favour of Turkish membership routinely argue that this would be of benefit to Western European governments in their dealings with their own Muslim communities. Jack Straw, British foreign minister, argued in a visit to Denmark in 2004 that To support Turkish candidacy is very important to reconcile with moderate Islam which is a part of the war against terror … Islamist militants want to divide Muslim and Christian worlds. We could fight against this by stressing history and common values that Europe shares with the Islamic world. For me the most crucial test in this domain is the process of inclusion of Turkey in the European Union.

Very similar arguments are made by Tony Blair, Gunter Veheugen (Vice-President of the Barroso Commission) and other European leaders. Those who oppose Turkish membership do so largely for cultural reasons. In their eyes, Turkey is not European. This begs the question of what being ‘European’ means, which elicits no consensus. What the debate around Turkey reveals is the EU’s difficulty in finding any workable definition for what integration and enlargement are expected to achieve. Michel Rocard, former French prime minister, was right when he argued in September 2004 that ‘the Europe of institutions was built without any reference to a particular vision of society … . There was no agreement on the intention or the need to adopt such a vision, nor on what it could have meant, not at the beginning of the integration process and not today’ (Le Monde, 22 September 2004). This inability to define its goals and purpose go a long way to explaining the EU’s legitimacy problems, and the issue of Turkish membership only serves to highlight them. Conclusion In studies of the impact of enlargement on the EU, the emphasis has been on managing the EU’s increasing diversity. This chapter has argued that a better framework for understanding post-enlargement Europe is in terms of greater unity. The new division of Europe are not cultural or geopolitical, but rather reflect an institutionalization of structural inequalities in Europe. This challenges assumptions about formal political equality in the Union that are of concern to member states in both the core and new periphery of the EU. At the same time, the East-West division is transcended today by a common experience of disenchantments felt by national populations vis-à-vis both national governments and pan-European institutions. This raises questions of legitimacy that are as pressing for Western political élites as they are for their Eastern counterparts. The dynamics of future enlargements are likely to be shaped by this emerging Union of disenchantment.


107

References Academic Sources Agh, A. (1999). ‘Europeanisation of Policmaking in East Central Europe: The Hungarian Approach to EU accession’. Journal of European Public Policy. 6(5): 839-54. Baudrillard, J. (2006). ‘The Pyres of Autumn’. New Left Review. 37: 5-7. Beetham, D. and C. Lord (1998). Legitimacy and the EU. London: Longman. Bernstein, R. (2004). Poland’s New Role: European Border Guard, International Herald Tribune. Paris. Bickerton, C.J. (2006). ‘No Welcome for Serbia in the EU’, Le Monde Diplomatique. Bickerton, C.J. (2003). Demystifying Europe: Labour and Capital Flows in EU Enlargement. University of Geneva. Boeri, T. and H. Brucker (2005). ‘Migration, Coordination Failures and EU Enlargement’. IZA Discussion Paper Series. Buruma, I. (2006). Murder in Amsterdam – The Death of Theo Van Gogh and the Limits of Tolerance. London: Atlantic. Buruma, I. (1999). Voltaire’s Coconuts or Anglomania in Europe. London: Wiedenfeld & Nicolson. Carothers, T. (2002). ‘The End of the Transition Paradigm’. Journal of Democracy. 13(1): 5-21. Chandler, D. (2006). Empire in Denial: The Politics of State-building: Pluto. Dimitrova, A. 2002. ‘Enlargement, Institution-buidling and the EU’s Administrative Capacity Requirement’. Western European Politics. 25(4): 171-190. Elster, J., C. Offe, and U.K. Preuss, U.K. (1998). Institutional Design in PostCommunist Societies: Rebuilding the Ship at Sea. Cambridge: Cambridge University Press. Ekiert, G. and S.E. Hanson, (eds.). (2003). Capitalism and Democracy in Central and Eastern Europe: Assessing the Legacy of Communist Rule. Cambridge: Cambridge University Press. EuropeAid. (2004). Evaluation of Regulation 2667/2000 (European Agency for Recontruction) Ref. 951652. Brussels: European Union. Gillingham, J. (2003). European Integration 1950-2003 Superstate or New Market Economy? Cambridge: Cambridge University Press. Grabbe, H. (2000). ‘The Sharp Edges of Europe: Extending Schengen Eastwards’. International Affairs. 76(3): 519-536. Grzymala-Busse, A.M. (2002). Redeeming the Communist Past: The Regeneration of Communist Parties in East Central Europe. Cambridge: Cambridge University Press. Grzymala-Busse, A. and A. Innes, (2003). ‘Great Expectations: The EU and Domestic Political Competition in East Central Europe’. East European Politics and Societies. 17: 64-73. Haas, E.B. (1961). International Integration: The European and Universal Process. International Organization. 15(3): 366-392.

108


Hansen, L. and M.C. Williams, (1999). ‘The Myths of Europe: Legitimacy, Community and the ‘Crisis’ of the EU’. Journal of Common Market Studies. 37(2): 233-249. Haseler, S. (2005). Super-state: The New Europe and its Challenge to America. London: I.B. Tauris. Hoffmann, S. (1995). ‘Obstinate or Obsolete? France, European Integration and the Fate of the Nation State’. In S. Hoffmann (ed.), The European Sisyphus: Essays on Europe, 1964-1994. Boulder: Westview Press. Hughes, J., G. Sassen, and C. Gordon, (2002). ‘Saying “Maybe” to the Return to Europe. European Union Politics. 3(3): 327-355. Kaletsky, A. (2005). ‘The People of Europe have voted for paralysis – and perhaps obliteration’. The Times. London. Kampfer, J. (2004). ‘Second-class Allies’. New Statesman. Knaus, G. and M. Cox, (2005). ‘The “Helsinki Moment” in Southeastern Europe. Journal of Democracy. 16(1): 39-53. Kydland, F.E. and E.C. Prescott, (1977). ‘Rules Rather than Discretion: the Inconsistency of Optimal Plans’. Journal of Political Economy. 85(3). Lavanex, S. (1999). Safe Third Countries: Extending the EU Asylum and Immigration Policies to Central and Eastern Europe. Budapest: Central European University Press. Malova, D. and T. Haughton, (2002). ‘Making Institutions in Central and Eastern Europe, and the Impact of Europe’. Western European Politics. 25(2): 101-120. McClements, C. (2004). From Pre-Accession to Accession: Thematic Evaluation of PHARE support allocated in 1999-2002 and implemented until November 2003, Second Generation Twinnings – Preliminary Findings. 1-80. Brussels: DG Enlargement. Moravcsik, A. (1993). ‘Preferences and Power in the European Community: A Liberal Intergovernmentalist Approach’. Journal of Common Market Studies. 31(4): 473-524. Moscovici, P. (2006). l’Europe est Morte, Vive l’Europe! Paris: Librairie Académique Perrin. Parker, G. (2004). ‘Doors slammed shut as new EU members look for their rights’. Financial Times. London. Puchala, D. (1972). ‘Of Blind Men, Elephants and International Intergration’. Journal of Common Market Studies. 10(3): 267-285. Raik, K. (2004). ‘EU Accession of Central and Eastern European Countries: Democracy and Integration as Conflicting Logics’. East European Politics and Societies. 18(4): 567-594. Rocard, M. (2004). De l’Europe, du Socialisme, et de la Dignité, Le Monde. Paris. SIGMA. (2006). Policy-Making and Co-ordination: Serbia, SIGMA Balkans Reports: SIGMA. Vachudova, M.A. (2005). Europe Undivided: Democracy, Leverage and Integration After Communism. Oxford: Oxford University Press. Zielonka, J. (2001). ‘How New Enlarged Borders will Reshape the European Union’. Journal of Common Market Studies. 39(3): 507-536.


109

Zielonka, J. (2006). Europe as Empire: The Nature of the Enlarged European Union. Oxford: Oxford University Press. Press The Cultural Curtain, Chris Bickerton, spiked-online. 19 October 2004. http: //www.spiked-online.com/Articles/0000000CA742.htm Q&A: Schengen Agreement, BBC News, 2 August 2005. http: //news.bbc.co.uk/1/hi/world/europe/4738063.stm Central Europe desperate for a deal, BBC News, 2 December 2005. http: //news.bbc.co.uk/1/hi/world/europe/4492958.stm In Quotes: UK’s EU Budget Plan, BBC News, 6 December 2005 http: //news.bbc.co.uk/1/hi/uk_politics/4488164.stm Slovenia gets euro green light, BBC News, 15 June 2006 http: //news.bbc.co.uk/1/hi/business/5082438.stm Twin leaders are remaking Poland, Jan Cienski and Stefan Wagsyl, Financial Times, 30 August 2006 http: //www.ft.com/cms/s/ed9b7306-3851-11db-ae2c-0000779e2340.html Hungary: A ‘hooligan revolution’? Frank Furedi, spiked-online. 25 September 2006. http: //www.spiked-online.com/index.php?/site/article/1695/ Migrant workers: what we know, BBC News, 27 September 2006 http: //news.bbc.co.uk/1/hi/uk/5384516.stm Q&A: Romanian and Bulgarian Workers, BBC News, 24 October 2006 http: //news.bbc.co.uk/1/hi/world/europe/5381990.stm Hungary’s Euro-readiness not in sight – Almunia, Portfolio.hu, 9 November 2006. http: //www.portfolio.hu/en/cikkek.tdp?cCheck=1&k=2&i=10151


Chapter 7

Turkey’s Accession to the European Union: Dilemmas, Opportunities, and Constraints Joseph S. Joseph

The history of contemporary Turkey is characterized by change, the main causes of which have been external stimuli and incentives, particularly the drive for transformation from an oriental Islamic empire to a secular national state. This transformation – known as Westernization – has been slow and occasionally painful. It has been aptly called ‘the Turkish revolution’ and, as Bernard Lewis pointed out in his classic work on modern Turkey, it could not be defined only ‘in terms of economy or society or government, but of civilization’ (Lewis 1968: 486). It gained momentum with the establishment of the Turkish Republic in 1923 and the ascent of Kemalism, when ‘everything had to be rebuilt, above all a new identity’ (Pope and Pope 2004: 59). Its main goal was to move Turkey from being a medieval Islamic theocracy to becoming a modern capitalist Western democracy. At the center of the Kemalist ideology and its state-building and nation-building efforts was the consolidation of the Turkish Republic which was based on a political system the core principles of which were ‘heavily tainted by a historically developed authoritarian understanding of the unitary state and its functioning as well as an organic and homogenous understanding of the nation’ (Kramer 2000: 9). Eventually the scope of Westernization was broadened to include economic, social and cultural changes that were intensified by industrialization efforts and rapidly increasing urbanization. In the wake of the dismantling of the Ottoman Empire and in the process of reformation and sociopolitical reorientation ‘the replacement of old, Islamic conceptions of identity, authority, and loyalty by new conceptions of European origin was of fundamental importance.’ In the theocratically conceived polity of Islam, God was to be twice replaced: as the source of sovereignty, by the people; as the object of worship, by the nation. (Lewis 1968: 486)

As a result of these changes, which have taken decades to consolidate, Turkey has become a secular democracy, although the politicization of Islam and the political role of the military are still striking features of the Turkish political landscape. The success or failure of these protracted reforms has been the topic of an ongoing debate with differing opinions. To this, Turks are ‘still struggling to digest the heavy burden of Ataturk’s legacy’ (Pope and Pope 2004: 67) while the prospect of accession to the

112


EU is posing new challenges. Recently, French President Jacques Chirac commenting on Turkey’s European aspirations suggested that it will have to undergo a ‘major cultural revolution’ to realize its dream of joining the EU.1 It can be argued, however, that during the last few decades, in many areas of public life including government, economy, society and culture, changes and achievements have been remarkable and irreversible. Today the challenge of Westernization is taking the form of Europeanization, that is, the reform of domestic structures, institutions and policies to meet the requirements of the systemic logic, political dynamics and administrative mechanisms of European integration. Turkey is, once again, facing a Western challenge as it is preparing to become a member of the EU and join the ‘process of creating an ever closer union among the peoples of Europe.’2 The role of Turkey in this process can be catalytic, as the EU will be welcoming its first Islamic member state. The deepening and widening of the integration process will acquire a new meaning, as Europe will be redefining itself with reference to the future, not to the past. Indeed, the challenge and promise for both Islamic Turkey and Christian Europe is about seizing the moment and moving beyond the clash of civilizations as the modus operandi of history and the modus vivendi of governments and peoples. A Long Road of Ups and Downs Following a protracted period of ups and downs in EU–Turkish relations, accession negotiations started in October 2005. The Brussels European Council made the decision for the commencement of accession negotiations in December 2004 ‘on the basis of a report and recommendation from the Commission, that Turkey fulfills the Copenhagen political criteria.’3 Although accession negotiations and preparations will last for many years and accession is unlikely to take place within the next decade, in political terms Turkey is at the threshold of the EU.4 Less optimists point to the fact that although the objective of the negotiations is accession, there can be no guarantee in advance that they will be successfully completed. On both sides, however, there is positive predisposition and political will for successful conclusion of the negotiations and full membership of Turkey. 1 Jacques Chirac talking at a press conference on October 4 (the day after accession talks with the EU were launched); see Guardian Unlimited (The Guardian Digital Edition), 5 October 2005. 2 Treaty on European Union (consolidated version), article 1. 3 Brussels European Council, 16-17 December 2004, Presidency Conclusions, paragraph 17. 4 The European Commission recommended that ‘[t]he EU will need to define its financial perspectives for the period from 2014 before negotiations [with Turkey] can be concluded.’ See European Commission, Communication from the Commission to the Council and the Parliament, ‘Recommendation of the European Commission on Turkey’s Progress towards Accession’ (6 October 2004), p. 5. The Recommendation was issued together with the 2004 ‘Regular Report on Turkey’s Progress towards Accession.’

Turkey’s Accession to the European Union

113

The commencement of accession negotiations was the culmination of a long relationship, which goes back to the early years of the EU. Turkey expressed an interest in institutionalizing its relations and becoming an associate member of the EU in the late 1950s. In 1959 it applied for associate membership and in 1963 it signed an association agreement that was intended to pave the way for full membership. The association agreement – known as the Ankara agreement – went into effect in 1964 and provided that when the relations of Turkey with the EU have ‘advanced far enough to justify envisaging full acceptance by Turkey of the obligations of the [EC] Treaty, [the EC] shall examine the possibility of the accession of Turkey to the European Community.’5 In 1971 an additional protocol was signed between Turkey and the EU aimed at further strengthening and broadening of their economic and political relations. The association agreement did not achieve its objective and failed to prepare Turkey for membership. It has been argued that the EU looked at it as a ‘framework for its containment policy rather than a pre-accession strategy, because it had serious reservations about Turkey’s prospects for EU membership on political and economic grounds’ (Arikan 2003: 74). Despite its failure, however, the association agreement provided a useful link with the European integration process and bolstered Turkey’s Westernization policy. Following the two Mediterranean enlargements of the EU in 1980s – accession of Greece in 1981, and of Portugal and Spain in 1986 – Turkey applied for full membership in April 1987. The response of the EU was not positive and cited various reasons why ‘it would be inappropriate for the Community [ … ] to become involved in new accession negotiations [and] it would not be useful to open accession negotiations with Turkey.’6 After the collapse of the Soviet Union and the end of the Cold War, EU deepening and widening began accelerating. In 1995 the fourth EU enlargement took place with the accession of Austria, Finland and Sweden, while pre-accession preparations got under way with the countries of Central and Eastern Europe. In 1997, the European Council in Luxemburg decided for the commencement of accession negotiations with six countries – the Czech Republic, Cyprus, Estonia, Hungary, Poland, and Slovenia – while excluding Turkey on economic and political grounds. A turning point came two years later at the Helsinki European Council where it was decided that ‘Turkey is a candidate State destined to join the Union on the basis of the same criteria as applied to the other candidate States.’7 At the same time, the list of acceding countries was expanded to include Bulgaria, Latvia, Lithuania, Malta, Romania and Slovakia. At Helsinki, a decision was also made for the establishment of an accession partnership with Turkey, which would serve as a roadmap to accession. The accession partnership was adopted in 2001 and defined

5 Agreement Establishing an Association Agreement between the European Economic Community and Turkey, article 28. The Association Agreement (known as the Ankara agreement) was signed on 12 September 1963 and went into effect on 1 December 1964. 6 Commission of the European Communities, ‘Commission Opinion on Turkey’s Request for Accession to the Community’, 18 December 1989, paragraphs 10 and 11. 7 Helsinki European Council, 10-11 December 1999, Presidency Conclusions, paragraph 12.

114


the principles, priorities, conditions and short- and medium-term objectives for Turkey’s integration with the EU. Another milestone in Turkey’s European course was the publication in October 2004 of the positive ‘Recommendation of the European Commission on Turkey’s Progress Towards Accession.’ The Recommendation concluded, ‘that Turkey sufficiently fulfils the political criteria and recommends that accession negotiations be opened.’8 This was the first time an EU institution firmly and clearly recommended the opening of accession negotiations. As it was put by the Washington Post, ‘Turkey seemed to shift geographically westward.’9 The Commission, however, pointed out that accession negotiations would be an open-ended process the outcome of which could not be guaranteed in advance. It also warned that the negotiations could be suspended if there was a persistent violation of the principles of democracy, human rights and the rule of law. Two months later, the Brussels European Council (16-17 December 2004) adopted the recommendation of the Commission and decided for the opening of accession negotiations on 3 October 2005. The message came clear and loud from Brussels that ‘Turkey has taken its European destiny in its own hands.’10 It is also interesting to note that the decision by the EU heads of state or government came at a time when the majority of the European public was not favoring accession of Turkey to the EU.11 As the president of the European Commission pointed out, the challenge now for Turkey was ‘to win the hearts and minds of those European citizens who are open to, but not convinced of Turkey’s European destiny.’12 The accession negotiations were launched on 3 October 2005 and are expected to last for more than a decade. As the European Commissioner for enlargement put it, ‘the journey is as important as the final destination.’13 The negotiations and the pre-accession preparations are based on a strategy aimed at guaranteeing that harmonization with the acquis communautaire and the political reform process are consolidated, broadened and properly implemented. A year and a half after the launching of accession negotiations (April 2007), not much has been achieved. Only one chapter (science and research) has been 8 European Commission, Communication from the Commission to the Council and the Parliament, ‘Recommendation of the European Commission on Turkey’s Progress towards Accession,’ (6 October 2004), p. 8. 9 Washington Times, ‘Turkey’s Continental Drift,’ 10 October 2004. 10 José Manuel Barroso, President of the European Commission, statement at a press conference, 17 December 2004. 11 The results of a poll carried out in October – November 2005 showed that 55 per cent of the Europeans are against Turkish accession, 31 per cent in favor, and the rest 14 per cent do knot know. Source: Standard Eurobarometer 64, published by the European Commission in December 2005. These results are consistent with similar findings of polls carried out in recent years. 12 José Manuel Barroso, President of the European Commission, statement at a press conference, 16 December 2004. 13 Olli Rehn, Commissioner for Enlargement, ‘Accession Negotiations with Turkey: The Journey Is as Important as the Final Destination,’ speech at the European Parliament, 28 September 2005.


115

opened and provisionally closed in June 2006. Following a recommendation by the Commission and a decision by the Council of Ministers on 11 December 2006, which was endorsed by the European Council on 14-15 December 2006, no other chapter will be provisionally closed ‘until the Commission verifies that Turkey has fulfilled its commitments related to the Additional Protocol.’14 For the same reason, the Council decided that eight chapters ‘covering policy areas relevant to Turkey’s restrictions as regards the Republic of Cyprus’ would not open.15 Commenting on the decision to partially suspend negotiations on a number of acquis chapters, the President of the European Commission stressed ‘that a breach of legal obligations cannot be accepted. At the same time, continuing this negotiation process clearly lies in our own strategic interest. We need both sides to play by the rules. It is now up to the Turkish side to show its willingness to fulfill its obligations.’ A second chapter (enterprise and industrial policy) was opened in March 2007. It is worth noting however, that efforts are made in Brussels to sustain the momentum and political will for Turkey’s European course. As the European Commissioner for Enlargement put it, ‘[d]espite the stalemate on issues related to Cyprus, there has been no train crash. The journey continues steadily, even if at a somewhat slower speed.’17 Negotiating Framework and Principles Governing the Accession Negotiations18 Accession negotiations opened on the basis that Turkey sufficiently meets the Copenhagen political criteria.19 They are also based on Turkey’s own merits and their 14 Council Conclusions, 2770th Council Meeting, 11 December 2006. Note: The Additional Protocol extends the EU–Turkey Association Agreement to the ten member states (including Cyprus) which acceded on 1 May 2004. Turkey signed the Protocol in June 2005, but continues to deny access to its airports and ports to airplanes and ships flying the Republic of Cyprus flag. These restrictions infringe the Customs Union agreement. 15 The eight chapters are: 1. Free movement of goods; 3. Right of establishment and freedom to provide services; 9. Financial services; 11. Agriculture and rural development; 13. Fisheries; 14. Transport policy; 29. Customs union 30. External relations. 16 José Manuel Barroso, President of the European Commission, speech before the European Parliament, 23 December 2006. 17 Olli Rehn, Commissioner for Enlargement, ‘Enlargement: The EU Keeps Its Doors Open for South Eastern Europe,’ speech before the European Economic and Social Committee, 17 January 2007. 18 This section of the chapter is a compilation of the main points included in the EU paper ‘Negotiating Framework for Turkey: Principles Governing the Negotiations’ (2005). It also draws on the ‘EU Opening Statement for the Accession Conference with Turkey’ (2005). 19 The ‘Copenhagen criteria’ were decided by the Copenhagen European Council, 21-22 June 1993, and spelled out in the Presidency Conclusions as follows: ‘Membership requires that the candidate country has achieved stability of institutions guaranteeing democracy, the rule of law, human rights and respect for the protection of minorities, the existence of a functioning market economy as well as the capacity to cope with competitive pressure and

116


pace depends on Turkey’s progress in meeting the requirements for membership. The objective of the negotiations is accession, but they are an open-ended process, the outcome of which cannot be guaranteed beforehand. While having full regard to all the Copenhagen criteria, including the absorption capacity of the Union, if Turkey is not in a position to assume in full all the obligations of membership then it must be ensured that she is fully anchored in the European structures through the strongest possible bond. Turkey is expected to sustain the process of reform and to work towards further improvement with regard to the principles of liberty, democracy, the rule of law and respect for human rights and fundamental freedoms, including relevant European case-law; to consolidate and broaden legislation and implementation measures specifically in relation to the zero tolerance policy in the fight against torture and ill-treatment and the implementation of provisions relating to freedom of expression, freedom of religion, women’s rights, ILO standards including trade union rights, and minority rights. In the case of a serious and persistent breach in Turkey of the principles of liberty, democracy, respect for human rights and fundamental freedoms and the rule of law on which the Union is founded, the European Commission will, on its own initiative or at the request of one-third of the member States, recommend the suspension of negotiations and propose the conditions for eventual resumption. The Council will decide by qualified majority on such a recommendation, after having heard Turkey, whether to suspend the negotiations and on the conditions for their resumption. The advancement of the negotiations is guided by Turkey’s progress in preparing for accession, within a framework of economic and social convergence. This progress is measured in particular against the following four sets of requirements: I. The Copenhagen criteria, that is, (a) the stability of institutions guaranteeing democracy, the rule of law, human rights and respect for and protection of minorities; (b) the existence of a functioning market economy and the capacity to cope with competitive pressure and market forces within the Union; (c) the ability to take on the obligations of membership, including adherence to the aims of political, economic and monetary union and the administrative capacity to effectively apply and implement the acquis. II. Turkey’s unequivocal commitment to good neighborly relations and its undertaking to resolve any outstanding border disputes in conformity with the principle of peaceful settlement of disputes in accordance with the United Nations Charter, including if necessary jurisdiction of the International Court of Justice. III. Turkey’s continued support for efforts to achieve a comprehensive settlement of the Cyprus problem within the UN framework and in line with the principles on which the Union is founded, including steps to contribute to a favorable climate for a comprehensive settlement, and progress in the normalization of bilateral relations between Turkey and all EU member states, including the Republic of Cyprus. market forces within the Union. Membership presupposes the candidate’s ability to take on the obligations of membership including adherence to the aims of the political, economic and monetary union.’


117

IV. The fulfillment of Turkey’s obligations under the Association Agreement and its Additional Protocol extending the Association Agreement to all new EU member states, in particular those pertaining to the EU–Turkey customs union, as well as the implementation of the Accession Partnership, as regularly revised. Parallel to accession negotiations, the Union engages with Turkey in an intensive political and civil society dialogue. The aim of the inclusive civil society dialogue is to enhance mutual understanding by bringing people together in particular with a view to ensuring the support of European citizens for the accession process. Accession implies the acceptance of the rights and obligations deriving from the acquis and attached to the Union system and its institutional framework, such as (a) the content, principles and political objectives of the Treaties on which the Union is founded; (b) legislation and decisions adopted pursuant to the Treaties, and the case law of the Court of Justice; (c) other acts, legally binding or not, adopted within the Union framework, such as interinstitutional agreements, resolutions, statements, recommendations and guidelines; (d) joint actions, common positions, declarations, conclusions and other acts within the framework of the common foreign and security policy; (e) joint actions, joint positions, conventions signed, resolutions, statements and other acts agreed within the framework of justice and home affairs; (f) international agreements concluded by the Communities, the Communities jointly with their member states, the Union, and those concluded by the member states among themselves with regard to Union activities. Turkey’s acceptance of the rights and obligations arising from the acquis may necessitate specific adaptations to the acquis and may, exceptionally, give rise to transitional measures that must be defined during the accession negotiations. The financial aspects of the accession of Turkey must be allowed for in the applicable Financial Framework. Since Turkey’s accession could have substantial financial consequences, the negotiations can be concluded only after the establishment of the Financial Framework for the period from 2014 together with possible consequential financial reforms. In all areas of the acquis, Turkey must bring its institutions, management capacity and administrative and judicial systems up to Union standards, both at national and regional level, with a view to implementing the acquis effectively or, as the case may be, being able to implement it effectively in good time before accession. At the general level, this requires a well-functioning and stable public administration built on an efficient and impartial civil service, and an independent and efficient judicial system. The EU will lay down benchmarks for the provisional closure and, where appropriate, for the opening of each chapter.20 Turkey will be requested to indicate 20 For the purposes of the accession negotiations, the acquis has been divided into the following chapters: 1. Free movement of goods; 2. Freedom of movement for workers; 3. Right of establishment and freedom to provide services; 4. Free movement of capital; 5. Public procurement; 6. Company law; 7. Intellectual property law; 8. Competition policy; 9. Financial services; 10. Information society and media; 11. Agriculture and rural development;

118


its position in relation to the acquis and to report on its progress in meeting the benchmarks. Turkey’s correct transposition and implementation of the acquis, including effective and efficient application through appropriate administrative and judicial structures, will determine the pace of negotiations. Issues, Prospects and Challenges The accession negotiations and the forthcoming Turkish accession present challenges to both Turkey and the EU. It is widely accepted that ‘Turkey’s accession would be different from previous enlargements because of the combined impact of Turkey’s population, size, geographical location, economic, security and military potential.’21 The negotiations are taking place in the framework of an intergovernmental conference and decisions are made by unanimity, which requires the participation and approval of all member states. Keeping in mind that by the time of Turkish accession the EU will include at least 27 members (the current number of member states), the issue of unanimity becomes a critical and complicated one. The case of Turkey will be different and more challenging from previous accessions for a number of reasons, some of which are presented below.22 Turkey is a country with a large population and geographic area. With a population of seventy-one million today, it is projected that it could be the largest member state at the time of accession. It is worth mentioning that the 2004 enlargement included ten countries with a total population of 75 million, while the 2007 enlargement included two countries (Bulgaria and Romania) with a total population of 30 million. As a Moslem secular country, Turkey will also add a new demographic and religious dimension to the EU. Also, the presence of a large number of Turkish immigrants in European countries raises the issue of possible additional migration, as a natural consequence of accession, which may affect the labor market and demography of small member states. The social repercussions of such a development raise sensitivities and pose challenges with political ramifications. The EU in an effort to address cultural and religious differences at the grass roots level is promoting political and cultural dialogue between the people of Turkey

12. Food safety, veterinary and phytosanitary policy; 13. Fisheries; 14. Transport policy; 15. Energy; 16. Taxation; 17. Economic and monetary policy; 18. Statistics; 19. Social policy and employment (including anti-discrimination and equal opportunities for women and men); 20. Enterprise and industrial policy; 21. Trans-European networks; 22. Regional policy and coordination of structural instruments; 23. Judiciary and fundamental rights; 24. Justice, freedom and security; 25. Science and research; 26. Education and culture; 27. Environment; 28. Consumer and health protection; 29. Customs union; 30. External relations; 31. Foreign, security and defence policy; 32. Financial control; 33. Financial and budgetary provisions; 34. Institutions; 35. Other issues. 21 European Commission, ‘Recommendation of the European Commission on Turkey’s Progress towards Accession’ (6 October 2004), p. 3. 22 An elaborate presentation of the issues and challenges arising from the prospect of Turkish accession is included in the Commission staff working document: ‘Issues Arising from Turkey’s Membership Perspective,’ SEC (2004) 1202.


119

and EU member states. This dialogue will address concerns and perceptions on issues such as ‘difference of cultures, religion, issues relating to migration, concerns on minority rights and terrorism.’23 The view from Brussels is that although ‘the negotiation process will be essential in guiding further reforms in Turkey, [ … ] the civil society should play the most important role in this dialogue’24 This is an interesting and innovative strategy, which upgrades the role of the civil society which is moving to the center of the political stage in the EU and can also make a difference in Turkey’s Europeanization process. In this regard, the strengthening of civil society in Turkey is a major objective of the EU pre-accession strategy. The Kurdish question is a multifaceted challenge that is becoming more and more an accepted reality and an item on the agenda of EU – Turkish relations. As a ‘major fault line within Turkish democracy’ and a problem without ‘a solution on the horizon,’ it is a source of concern at home and in the EU (Kramer 2000: 52). The EU assessment is that ‘progress has been slow and uneven. In some cases, it has even deteriorated.’25 The position of the EU is that ‘a comprehensive strategy should be pursued, to achieve the socio-economic development of the region [east and southeastern part of Turkey] and the establishment of conditions for the Kurdish population to enjoy full rights and freedoms.’26 The Kurdish issue has also ramifications in some EU member states where Kurdish immigrants live and have established active political and cultural organizations. Another transnational aspect of the Kurdish issue is the fact that developments in the neighboring countries of Iraq, Iran and Syria – where also Kurds live – can easily have an impact on Turkey. As Andrew Mango put it, ‘Kurdish nationalism is a many-headed hydra, and it will survive somewhere, if not everywhere’ (Mango 2004: 211). The strategic location of Turkey presents a unique challenge to the EU’s external role and policies as ‘it lies at the epicenter of a series of conflicts, real and potential’ (Mountcastle 2002: 5) in the region. Turkish accession will bring closer to the EU the instability and tensions of a strategically vital region with strong conflicting energy-related interests. The unstable neighborhoods of the Middle East, Caucasus and Central Asia will become the immediate neighborhood of the EU and its member states. As a major power in the region ‘Turkey could be drawn into conflicts that work against European, Central Asian, and Middle Eastern integration and peace’ (Black et al. 2002: 2). In conjunction with this point, the addition of new long external borders will present a major challenge to the EU as it will involve critical policies and issues such as migration, asylum and drug-smuggling. Turkey’s participation in the European common foreign and security policy can also be controversial. Its role in NATO is a central one and so far it ‘has not witnessed a strong “Europeanization’ of its foreign policy” (Larrabee and Lesser 2003: 65). Its large military force will make it a major military power in the EU with the largest number of military personnel. Turkey – like other member states – has already shown 23 European Commission, ‘Recommendation of the European Commission on Turkey’s Progress towards Accession’ (6 October 2004), p. 7. 24 Ibid., p. 9. 25 European Commission, ‘Turkey: 2005 Progress Report’ (9 November 2005), p. 38. 26 European Commission, ‘Turkey 2006 Progress Report’ (8 November 2006), p. 22.

120


that on issues of vital national interest it is not willing to compromise and align its foreign and security policy with the positions of other states. The willingness and ability of Turkey to meet European expectations on issues of security and defense are also largely determined by domestic factors such as civil-military relations and secular-religious dichotomies. The discussion over external policy and orientation points to the fact ‘that modern Turkey has functioned as part of several systems – European, Middle Eastern, Eurasian – while remaining on the cultural and political periphery of each’ (Larrabee and Lesser 2003: 189). It cannot go unnoticed that Turkey has uneasy bilateral relations with some of its neighbors and has been characterized a ‘reluctant neighbor’ (Barkey 1996). For example, relations with Syria have been bad in recent decades for various reasons, including water resources and Kurdish connections. Iran’s Islamic political orientation and nuclear ambitions are sources of concern for Turkey. Turkey’s policy of expanding its influence in the Turkic states of the Caucasus and Central Asia have alarmed Russia, while Armenia has no diplomatic relations with Turkey and the border between the two countries has been closed. Turkey has unresolved issues and unstable relations or no relations at all with some EU member states. Greece and Cyprus are cases in point. In recent years, GreekTurkish relations have improved considerably and Greece’s policy towards Turkish accession is a positive one, but this depends on the political barometer over the Aegean and Cyprus. The fact that Turkey does not recognize the Republic of Cyprus – a full member of the EU since May 2004 – has been a source of legal controversies and political complications. In that regard, there is still an open question: how can a candidate country conduct accession negotiations and sign an international treaty (like the accession treaty) with a country it does not recognize? The dispute over the implementation of the Additional Protocol and the suspension of negotiations, by the European Council in December 2006, on eight key chapters or provisionally closing any chapter is indicative of the serious problems that can arise. The Cyprus problem has been a source of difficulties for EU–Turkish relations and Greek-Turkish relations. The Mediterranean island has been a flashing point in the region since 1963 when intercommunal fighting broke out. In 1974 a Greek coup d’ état and a Turkish invasion took place which led to ethnic segregation and the de facto division of the island. Besides the division of the island, the presence of a sizeable Turkish army in the northern part of the island and a shared feeling of insecurity between the two local communities are also striking features of the problem. Several efforts for a solution made so far by the UN, or in the name of the UN, have failed. The most recent one culminated in the submission of a comprehensive plan for a settlement in 2004 – known as the Annan Plan – which provided for the establishment of a new state of affairs on the island based on a bizonal bicommunal federation.27 The two Cypriot communities held separate, simultaneous referenda on

27 For an extensive account on the developments which led to the shaping of the Annan Plan and its failure, see the ‘Report of the Secretary General on his Mission of Good Offices in Cyprus’, UN doc. S/2004/437 of 28 May 2004.


121

the Annan Plan, but it was rejected by the Greek Cypriots.28 Apparently the majority of the Greek Cypriots believed that the plan was not fair. Especially the provisions on security, the Turkish settlers, the gradual withdrawal of the Turkish army, the exchange of properties and the return of refugees made the Greek Cypriot voters unhappy. There were also serious questions about the implementation and viability of the Plan, which created feelings of uncertainty among the Greek Cypriots.29 The failure of the Annan Plan, the accession of Cyprus to the EU and the commencement of accession negotiations with Turkey have created a new reality, additional urgency and a promising prospect. Sooner or later a momentum will emerge for the reunification of the island that is too small to remain divided, but big enough to accommodate its people as a reunited EU member state. In this regard, besides the UN, the EU can also play a key role in the search of a settlement that will address the concerns of all parties involved. Turkey, in particular, can expect major political benefits from a solution on Cyprus as it will improve its European stature and be in a better position to pursue its goal of accession to the EU. Turkey has a level of economic development well below that of the EU average and its accession will have a considerable budgetary impact on the EU. Among the economic consequences Turkish accession will have for the EU is the creation of a regional economic disparity and financial burden for other member states. On the basis of current regulations and practices, Turkey will be receiving considerable support from the cohesion and structural funds at the expense of other member states, which may no longer be eligible for these funds. The prospect of such a development presents another challenge with political and economic ramifications. Along these lines, Turkey’s huge agricultural sector also receives special attention. The participation of Turkey in the EU institutions will affect dramatically the allocation of power and influence on decision-making, policy formulation and the dynamics of the broader European political arena. As a large member state, Turkey will have a powerful voice in the European Parliament and the Council of Ministers where decisions are mostly made by qualified majority. This shift of power from the western Christian capitals to the eastern Islamic frontier is already causing skepticism and reactions in some countries. Besides the above issues, which are discussed in detail in other chapters, there are topics and aspects inherent in the EU itself and its ability to absorb a new member state like Turkey. Already in 1993, the Copenhagen European Council, besides defining the political and economic criteria, also raised the issue of the EU’s capacity to enlarge without undermining the integration process. As stated by the heads of state or government, ‘the Union’s capacity to absorb new members, while maintaining the momentum of European integration, is also an important consideration in the general

28 At the referenda, which were held on 24 April 2004, the majority of the Greek Cypriots (75.83 per cent) voted no and the majority of the Turkish Cypriots (64.91 per cent) voted yes. 29 An elaborate account of the Greek Cypriot positions on the weaknesses and rejection of the Annan Plan was presented in a long letter by the President of the Republic of Cyprus to the UN Secretary General dated 7 June 2004.

122


interest of both the Union and the candidate countries.’30 Structural, political and economic developments in the EU during the next decade may affect the deepening and widening of the EU in a way that can have an impact on further enlargement, including the accession of Turkey. As it was reconfirmed by the European Council in December 2006, to ‘sustain the integration capacity of the EU the acceding counties must be ready and able to fully assume the obligations of the Union membership and the Union must be able to function effectively and to develop.’31 Conclusion: Oriental Past vs. Western Future While accession talks and preparations are under way, the debate over Turkey’s European prospects is heating up and a variety of perspectives, positions, opinions and arguments are put forward. The former president of the European Commission, Romano Prodi, asked Turkey to show ‘determination in pursuing further reforms and wisely conducting an accession process which, like all the others, will display both periods of progress and moments of tension and unavoidable difficulties.’32 He also appealed to the member states and the European public to demonstrate equal perseverance, as ‘Europe has nothing to fear from Turkey’s accession.’33 Europe’s confusion and ambivalence about Turkey is not a new phenomenon, although recently it has been becoming more visible. For example, in March 2007, Turkey’s Government was not invited to the Berlin Summit that marked the 50th anniversary of the Treaties of Rome, causing disappointment in Ankara. A few years ago, the fear of many Europeans about Turkish accession were expressed and stirred up by the former French President and head of the European constitutional convention, Valéry Giscard d’Estaing. In a blunt and provocative manner, he declared that Turkey was ‘not a European country’ and that its inclusion in the EU ‘would be the end of Europe.’34 In a similar vein echoing Turco-skepticism, a European Commissioner brought back memories of the Ottoman siege of Vienna by stating that ‘the liberation of 1683 would have been in vain’35 if Turkey joins the EU. On the other hand, there are strong voices arguing that Turkey can play the role of ‘a cultural and physical bridge between the East and West … . [and] become one

30 Copenhagen European Council, 21-22 June 1993, Presidency Conclusions, paragraph 7 (A) iii. 31 Brussels European Council, 14-15 December 2006, Presidency Conclusions, paragraph 6. 32 Romano Prodi, President of the European Commission ‘The Commission’s Report and Recommendation on Turkey’s Application’, presentation to the European Parliament, 6 October 2004. 33 Ibid. 34 Valéry Giscard d’Estaing, ‘Pour ou contre l’adhesion de la Turquie à l’Union Européenne’, interview with Le Monde, 9 November 2002. 35 Frits Bolkenstein, European Commissioner for Internal Market, speech at the University of Leiden, 6 September 2004. In his speech, Bolkenstein cited the pre-eminent historian and Islamic expert Bernard Lewis.


123

of Europe’s most prized additions.’36 Across the Atlantic, the United States has a clear pro-Turkish position that cannot be ignored. In June 2004, during the NATO summit in Istanbul, the American President George W. Bush underlined that position and called on Europe to prove that it ‘is not the exclusive club of a single religion’ and that ‘as a European power, Turkey belongs in the EU.’37 The increasingly polarized discussion over Turkey’s position and role in Europe will continue for years to come at various levels. The debate may even outlast the protracted period of accession negotiations during which not only negotiations on the acquis chapters will be conducted, but also a lot of diplomatic maneuvering and political twisting will take place. Throughout this period, the Christian and Islamic worlds will have to show that they can accommodate each other and prove false Samuel Huntington’s argument about ‘the clash of civilizations’ and the reconfiguration of the political world ‘along cultural lines’ (Huntington 1996: 20). Both Europe and Turkey will find out what they expect from each other and whether they can share a common future that will reconcile their different pasts. The real question will be whether the internal sociopolitical dynamics and external orientations of Turkey can be compatible with the changing dynamics of European integration, which aims at deepening the solidarity among peoples ‘while respecting their history, their culture and their traditions’, and creating ‘firm bases for the construction of the future Europe.’38 In the long run and in a broader sense, the challenge for the EU will be to develop a forward-looking world-view based on a multicultural civilization that has ample room for different religions including Islam. In a shrinking world of increasing interdependence this may no longer be a political option, but an urgent imperative for European integration that is a process of building unity through diversity. References Ahmad, F. (2003). Turkey: The Quest for Identity. Oxford: Oneworld Publications. Arikan, H. (2003). Turkey and the EU: An Awkward Candidate for EU Membership? Burlington: Ashgate. Aydin, M. and C. Eehan. (eds.) (2004). Turkish-American Relations: Past, Present and Future. New York: Routledge. Aydinli, E. et al. (2006). ‘The Turkish Military’s March Toward Europe’. Foreign Affairs. Barkey, H.J. (ed.) (1996). Reluctant Neighbor: Turkey’s Role in the Middle East. Washington, D.C.: U.S. Institute of Peace. Black, S. et al. (2002). Turkey’s Strategic Position at the Crossroads of World Affairs. Honolulu: University Press of the Pacific. Carkoglu, A. and B. Rubin. (eds.) (2003). Turkey and the European Union: Domestic Politics, Economic Integration and International Dynamics. London: Frank Cass. 36 Washington Times, ‘Turkey’s Continental Drift’, 10 October 2004. 37 Remarks by President George W. Bush, 29 June 2004. 38 Treaty on European Union (consolidated version), Preamble.

124


Griffiths, R.T. and Ozdemir, D. (2004). Turkey and the EU Enlargement: Processes of Incorporation. Istanbul: Istanbul Bilgi University Press. Gunduz, A. (2001). ‘Human Rights and Turkey’s Future in Europe’. Orbis. Gunter, M. (2005). ‘The U.S.-Turkish Alliance in Disarray’. World Affairs. Huntingon, S. (1996). The Clash of Civilizations and the Remaking of World Order. New York: Simon and Schuster. Joseph, J.S. (1997). Cyprus: Ethnic Conflict and International Politics, from Independence to the Threshold of the European Union. London: Macmillan Press. Joseph, J.S. (ed.) (2006). Turkey and the European Union: Internal Dynamics and External Challenges. London: Palgrave Macmillan, 2006 Kibaroglu, M. (2005). ‘Clash of Interest over Northern Iraq Drives Turkish-Israeli Alliance to a Crossroads’. Middle East Journal. Kinzer, S. (2001), Crescent and Star: Turkey between Two Worlds. New York: Farrar, Strauss and Giroux. Kirisci, K. (2004). ‘Between Europe and the Middle East: The Transformation of Turkish Policy’. Middle East Review of International Affairs. Kirisci, K. (2004). ‘The December 2004 European Council Decision on Turkey: Is It an Historical Turning Point?’. Middle East Review of International Affairs. Kramer, H. (2000). A Changing Turkey: The Challenge to Europe and the United States. Washington, D.C.: Brookings Institution Press. Lake, M. (ed.) (2005). The EU and Turkey: A Glittering Prize or a Millstone? London: Federal Trust for Education and Research. Larrabee, F.S. and I.O. Lesser. (2003). Turkish Foreign Policy in an Age of Uncertainty. Santa Monica, CA: Rand. Lewis, B. (1968). The Emergence of Modern Turkey, 2nd edition. London: Oxford University Press. Loizides, N. (2002). ‘Greek-Turkish Dilemmas and the Cyprus EU Accession Process’. Security Dialogue. Mango, A. (2004). The Turks Today. London: Murray. Michael, G.M. (1987). The Kurds and the Future of Turkey. New York: St. Martin’s Press. Morris, C. (2005). The New Turkey: The Quiet Revolution on the Edge of Europe. London: Granta Books. Mountcastle, J.W. (2002). ‘Foreword,’ in Black, S. et al. (2002). Turkey’s Strategic Position at the Crossroads of World Affairs. Honolulu: University Press of the Pacific. Moustakis, F. and R. Chudhuri.(2005). ‘Turkish-Kurdish Relations and the European Union: An Unprecedented Shift in the Kemalist Paradigm?’. Mediterranean Quarterly. Muftuler-Bac, M. (1998). ‘The Never-ending Story: Turkey and the European Union’. Middle Eastern Studies. Onis, Z. and S. Yilmaz. (2005). ‘The Turkey–EU–US Triangle in Perspective: Transformation or Continuity?’. Middle East Journal. Phillips, D.L. (2004). ‘Turkey’s Dreams of Accession’. Foreign Affairs.


125

Pope, N. and H. Pope. (2004). Turkey Unveiled: A History of Modern Turkey, 2nd edition Woodstock and New York: Overlook Press. Taspinar, O. (2005). Kurdish Nationalism and Political Islam in Turkey: Kemalist Identity in Transition. New York: Routledge. Teintelbaum, M.S. and P.L. Martin.. (2003). ‘Is Turkey Ready for Europe?’. Foreign Affairs. Tocci, N. (2004). EU Accession Dynamics and Conflict Resolution: Catalysing Peace or Consolidating Partition in Cyprus? Aldershot: Ashgate. Tocci, N. (2005). ‘Europeanization in Turkey: Trigger or Anchor for Reform?’. South East European Politics and Society. Togan, S. (2004). ‘Turkey: towards EU Accession’. World Economy. Ugur, M. (1999). The European Union and Turkey: an Anchor-credibility Dilemma. Aldershot: Ashgate. Ugur, M. and N. Canefe. (2004) (eds.). Turkey and European Integration: Accession Prospects and Issues. London: Routledge. Yildiz, K. (2005). The Kurds in Turkey: EU Accession and Human Rights. London: Pluto Press. Zurcher, E.J. (2004). Turkey: A Modern History, 3rd edition. London: I. B. Tauris.


Chapter 8

Judicialization: The Key to European Unification and EU Expansion Charles Anthony Smith

Persistent efforts to unify Europe were matched with the persistence of failure. The European Union only became viable once disputes that threatened it were channeled into an acceptable dispute resolution structure and the agreements made by its members became credible through the capacity for enforcement. The judiciary is the mechanism through which the members are bound by more than words alone. Thus, European unification only begins to be possible, practically, after the creation of a judicial structure to act as a nexus between peace and prosperity. Because trade was integral to the premise of economic inter-development across the member states, upholding trade agreements and the concomitant commercial contracts was critical to the survival of the European Union itself. Moreover, belligerent Member States and non-affiliated nations that might have used trade disputes as an excuse for trade wars have been held at bay through the provision of the administrative avenue for grievance provided by the ECJ and the Court of First Instance. Not only is a full remedy available, but the failure to avail oneself of the provided remedy is a breach of treaty by Member States and a breach of the law of nations by non-affiliated nations. The underlying credible commitments established by a viable judiciary are also a prerequisite to continued EU expansion. Unification: Antecedents and Beginnings The modern European unification movement can be traced to Pierre Dubois, a French attorney, who wrote Treatise on the Way to Shorten Wars in 1306. Dubois suggested a Council should be formed to act as an overseer of the monarchs and cities of Europe with a panel of judges to arbitrate disputes among the governed (Chalmers 1996: 1-6). The purpose of Dubois’ Council and the judicial panel was to avoid belligerence (Chalmers 1996: 1-6). In 1465 King Podebrand of Bohemia proposed a Council of Kings and Princes in an effort to secure his kingdom against the Turkish threat without aligning with the Papacy (Chalmers 1996: 1-6). Henry IV of France developed his Grand Design to inhibit Habsburg influence across Europe (Chalmers 1996: 1-6). Both William Penn and John Bellers proposed formal unification of Europe. Penn advocated a European Parliament designed to prevent war and promote

128


justice.1 Inspired by the Swiss cantonal plan, Bellers urged a division of Europe into 100 cantons that would each contribute to a standing army and a European Senate (Chalmers 1996: 3). Breaking from these early con-sociational models, in 1814, Saint-Simon published his ‘Plan for the Reorganization of the European Society’ which urged a parliamentary style system at both the state and regional level (Chalmers 1996: 3). After the first World War, a Pan-European movement gained a following based upon the premises that a unified Europe was necessary to prevent the resurgence of belligerence among the states of Europe and only a unified Europe could compete commercially with the United States (Depoorter 2003: 5). The Czech Count Coudenhove-Kalergi was the most prominent of the Pan-European advocates (Depoorter 2003: 5). The 1929 Briand Memorandum, wherein France proposed a European Federal Union marked the first state sponsored legislative attempt at unification (Depoorter 2003: 5). The Roman Empire, Napoleon, and Hitler each failed to unify Europe through conquest and the plans that sought unification through legislation were not any more successful (Depoorter 2003: 1). Throughout the 1940’s, reaction to the nationalism many blamed for the belligerence of World War II spurred several proposals such as The Ventotene Manifesto that called for a Federal Europe (Chalmers 1996: 3).2 The Council of Europe of 1949 sought to promote legal and cultural cooperation among its members but failed to address economic issues in any meaningful way and did not have any regulatory authority (Lipges 1991: 35-6).3 French Foreign Minister Robert Schuman issued a dual pronged call for substantial movement towards elimination of the divisions in Europe that led to war in May of 1950 (Schuman 1997: 61-3). The Schuman Declaration advanced proposals for European countries to embrace unilaterally without the need for additional transnational structures, but also advocated significant movement towards a unified Europe through a transnational structure (Schuman 1997: 61-3). Schuman set forth the rationale for a united Europe as follows: World peace cannot be safeguarded without the making of constructive efforts proportionate to the dangers which threaten it. The contribution which an organized and living Europe can bring to civilization is indispensable to the maintenance of peaceful relations. In taking upon herself for more than 20 years the role of champion of a united Europe, France has always had as the essential aim the service of peace. A united Europe was not achieved, and we had war (Schuman 1997: 61-3).

He identified the long-held animosity between France and Germany as a primary obstacle to unification, ‘Europe will not be made all at once, or according to a single, general plan. It will be built through concrete achievements, which first create a de facto solidarity. The gathering of the nations of Europe requires the elimination of 1 An Essay Towards the Present and Future Peace of Europe (1693) as cited in Stephen et al at 2. 2 Ventotene was the island where Mussolini’s opponents were imprisoned. The Ventotene Manifesto was drafted by the Italian dissidents Spinelli and Rossi. 3 The Council of Europe was originally comprised of Belgium, Denmark, France, Ireland, Italy, Luxembourg, the Netherlands, Norway, Sweden, and the United Kingdom.

Judicialization: The Key to European Unification and EU Expansion

129

the age-old opposition of France and the Federal Republic of Germany. The first concern of any action taken must be these two countries’ (Schuman 1997: 61-3). Finally, Schuman set forth trade as the path to unification: With this aim in view, the French Government proposes to take action immediately on one limited but decisive point. The French Government proposes to place Franco-German production of coal and steel under a common ‘High Authority’ within the framework of an organization open to the participation of other countries of Europe. The pooling of coal and steel production will immediately provide for the setting-up of common bases for economic development as a first step in the federation of Europe, and it will change the destinies of those regions which have long been devoted to the manufacture of munitions of war, of which they have been the most constant victims. The solidarity in production thus established will make it plain that any war between France and the Federal Republic of Germany becomes not merely unthinkable, but materially impossible...In this way there will be realized, simply and speedily, that fusion of interests which is indispensable to the establishment of a common economic system; and that will be the leaven from which may grow a wider and deeper community between countries long opposed to one another by sanguinary divisions...By pooling basic production and by setting a new High Authority whose decisions will be binding [in] France, the Federal Republic of Germany, and other member countries, these proposals will build the first concrete foundation of the European Federation which is indispensable to the preservation of peace (Schuman 1997: 61-3).

Institutions and Structure The Schuman Declaration led to the establishment of the European Court of Justice (ECJ). The institutional predecessor to the ECJ was the court established through the European Community Treaty (ECT) and the European Coal and Steel Community (ECSC) in 1951. The ECT established by the general tasks of the European Community as: ...establishing a common market and an economic and monetary union...to promote throughout the Community a harmonious, balanced, and sustainable development of economic activities, a high level of employment and of social protection, equality between men and women, sustainable and non-inflationary growth, a high degree of competitiveness and convergence of economic performance, a high level of protection and improvement of the quality of the environment, the raising of the standard of living and quality of life, and economic and social cohesion and solidarity among Member States (Emmert 1999: 29).

The general objectives of the European Community contemplated by the ECT included the following specific activities: For the purposes set out in Article 2 [General Tasks] the activities of the Community shall include, as provided for in this Treaty ... (a) the prohibition, as between Member States of customs duties and qualitative restrictions on the import and export of goods, and all other measures having equivalent effect; (b) a common commercial policy;

130

The State of European Integration (c) an internal market characterized by the abolition, as between Member States of obstacles to the free movement of goods, persons, services, and capital; ... (h) the approximation of the laws of the Member States to the extent required for the functioning of the common market; ... (k) the strengthening of economic and social cohesion... (s) the association of the overseas countries and territories in order to increase trade and promote jointly economic and social development; ... (u) measures in the spheres of energy, civil protection and tourism (Emmert 1999: 29).

The role of the Court was succinctly identified: ‘The Court of Justice shall ensure that in the application and interpretation of this Treaty, the law is observed’ (Emmert 1999: 93). This broad mandate is given structure and substance through the specific jurisdictional grants given to the Court. The jurisdiction of the Court runs along four broad channels. First, the Commission, or the office of the prosecutor, as well as any Member State may initiate proceedings for failure by a member State to fulfill an obligation that arises under community law. The Commission is the most frequent source of initiated actions. Second, a Member State, the Commission, or the Parliament may initiate proceedings for a judicial annulment, in whole or in part, of any specific piece of Community legislation that conflicts with the core EC agreements. Even individuals may bring an action for annulment if the law in question directly and individually affects them. Thus, the actions of the Community institutions are under direct review from the judiciary. Third, the Court may also review the failure to act by any Community institution. Members, the Commission, or individuals can initiate these actions. Fourth, the Court has jurisdiction for non-contractual liability for damages caused by Community institutions or servants in the performance of their official duties. Any damaged party may initiate these actions.4 The newly established institution became the arbiter for disputes arising under the subsequent Economic European Community (EEC) and European Atomic Energy Community (EURATOM) through the Treaties of Rome (1957) (Dehousse 1994: 5). Over time, the Court devoted ever more time and energy to disputes arising under the EEC (Dehousse 1994: 5). Dehousse reports that by the end of 1995, the ECJ issued 4024 judgements arising under the EEC; 359 judgements arising under the ECSC; and, 19 arising under EURATOM (Dehousse 1994: 5). It is noteworthy that the Court arose out of a series of treaties – the embodiment of the law of nations – and then transformed into a constitutional tribunal (Stein 1981: 1-27). Moreover, the treaty that has been the source of the majority of the Court’s activities, the EEC, deals exclusively with trade (Mckay 1991: 127-142).5

4 www.curia.eu.int/en/actu/news. 5 The EEC was established in 1958 to reduce tariff barriers and promote trade among the western European signatories. Among those parties to the treaty are Belgium, Luxembourg, the Netherlands, France, Italy, and West Germany. The United Kingdom, Ireland, and Denmark


131

European unification only begins practically to be possible once a judicial structure is created to act as a nexus between peace and prosperity. This mechanism for dispute resolution that binds the states of Europe allowed for the development of the credible commitments necessary to create the economic interdependence that inhibits belligerence. The similarities and differences between the ECJ and the early United States system are instructive, as the modern European Union process resembles a more evolved version of the early one. In particular, the jurisdictional focus on trade and dispute resolution among states/members and between states/members and nonaffiliated nations are similar. Walter Hallstein, a lawyer and professor of law, served the Federal Republic of Germany as an undersecretary of state and was the leader of the German delegation to the Schuman Plan Conference.6 Hallstein was the first president of the European Commission and served in that post for ten years beginning in 1958. In an address given at the Fletcher School of Law and Diplomacy in 1962, Hallstein described the ECJ as: ... a Community Supreme Court whose word is law on all matters of interpretation of the treaties which make up the Community’s Constitution. Like the European Parliament, it is common to the ECSC, Euratom, and the EEC. Its seven Judges are chosen for their acknowledged pre-eminence. Its function represents in some ways a blend of international and civil law, since it can settle both disputes between member states and actions involving any legal person within the Community. Its verdicts are directly enforceable by the domestic authorities of member states. It is perhaps superfluous to add that in the nine years since the Court began handing down decisions – most of them so far on coal and steel questions, but some already within the EEC – there has not been a single case of defiance of Court orders. (Hallstein 1962: 27)

The ECJ has jurisdiction over matters assigned to it by treaties. Its duties are to apply those treaties and any enactment contemplated by the treaties to particular enumerated disputes. It has a wide range of compulsory or mandatory jurisdiction. Member nations can only subvert this jurisdiction through exit from the European Union and exit cannot be done unilaterally. The ECJ’s institutional ability to give advisory opinions and its capacity to engage the highest tribunal of the member nations in a dialogue regarding the national law mean it is a dynamic institution that can engage at will. The treaties that gave rise to the ECJ as well as the now expansive case law support a role for the court that is substantially similar to that of the early United States Supreme Court.7 The focal areas of trade and dispute resolution among the member states and between the members and non-members signed on in 1973, Greece in 1981, Spain and Portugal in 1986, and Austria, Finland, and Sweden in 1995. 6 In this post he developed ‘the Hallstein Doctrine’ which claimed that only the Federal Republic of Germany represented the entire nation. 7 For example, Costa ECJ 6/64 (doctrine of supremacy); Simmenthal ECJ 92/78 (EC norms automatically render inapplicable any conflicting provision of national law); Van Gend en Loos ECJ 26/62 (treaty provisions are directly effective on members and their citizens); and Van Duyn ECJ 41/74 (EC directives are directly effective on members and their citizens). ‘Directly effective’ means the EC may confer on individuals rights without the necessity of

132


are all directed towards the growth and perseverance of the new union (Jacque 1990: 185). Like the early United States Supreme Court, the ECJ serves to consolidate the union by ensuring the flow of trade and the enforcement of bargains. As the Union expanded and states grew accustomed to the ECJ’s role, the caseload of the ECJ became unwieldy. Although the first decade saw a caseload ranging from a low of four new cases in 1953 to a high of 47 new cases in 1959, in 1985 more than 430 new cases were filed.8 Accordingly, to help cope with this continually expanding caseload, the ECJ amended its rules of procedure to enable it to more quickly dispatch cases. More importantly, it requested that the Council establish an additional judicial body. In response to that request, in 1989 the Council created the Court of First Instance. The purpose of the Court of First Instance is described by the ECJ as follows, ‘the aim of the creation of the Court of First Instance in 1989 was to strengthen the judicial safeguards available to individuals by introducing a second tier of judicial authority and enabling the Court of Justice to concentrate on its essential task, the uniform interpretation of Community law.’ 9 The critical distinction between the Court of First Instance and the ECJ is the jurisdictional focus in the Court of First Instance on actions brought by natural or legal persons against the Community institutions.10 While the primary litigant status is different, the subject matter of the disputes that are resolved in the Court of First Instance remains similar. In short, both natural and legal individuals may pursue actions based upon on commercial policy, trade-mark law, agriculture policy, state aid, competition, transportation, regional integration policy, and a variety of labor laws.11 Suits arising under these subject matters can take the form of seeking annulment of the acts of Community institutions. Individuals may also pursue suits for inaction or failure to act by Community institutions as well as for damages arising out of any action or inaction of a Community institution and contract disputes.12 Decisions of the Court of First Instance can be appealed to the ECJ although the points of appeal are limited to legal errors.13 The design of the system then, is a two-tiered dispute resolution structure that is focused on commerce and trade. Indeed, even issues of social policy, such as pay equity between genders, are couched in terms of commerce and trade. An examination of the specifics of the emergent case-law suggests that the EU judiciary has shaped the institutional system established the European Community treaties through the direct effect of Community law on Member States and by establishing the primacy of community law over municipal of state law.

any ratification by member legislatures. The nations must respect these conferred rights and protect them in the national level judiciary. 8 Chart 15, Court of Justice Tables and statistics, p. 171 www.curia.eu.int/instit/ 9 www.cuira.eu.int/en/insit/presentationfr/unejuridction 10 Ibid. Note that ‘legal persons’ refers to entities such as corporations or partnerships that are by law given many of the same rights natural persons have. Community institutions include Parliament, the Commission, etc. 11 Ibid. 12 Ibid. 13 Ibid.


133

Case Law In a series of decisions from 1963 through 1978, the ECJ solidified the principle that citizens of the Europe Community are entitled to rely upon the Treaties and Community regulations in proceedings before their national courts. The most important of these decisions are van Gend en Loos (1963), Costa v. ENEL (1964), and Simmenthal (1978).14 The ability of citizens to seek relief from national courts under the auspices of Community law combined with the primacy of Community law over national law make the law of the Community a tangible and credible legal regime for citizens and member states alike. The removal by the ECJ of hindrances and barriers to trade between Member States has been thorough, broad, and persistent. With respect to the free movement of goods, after the Cassis de Dijon judgment in 1979, consumers are entitled to purchase any food product from any Member State.15 Even actions taken with no binding or direct commercial effect have been prohibited. For instance, in a case involving Ireland, the ECJ held that efforts such as a commercial ad campaign by a Member State to influence traders and consumers could subvert the aims of the Treaty and were thus prohibited.16 There, the Member State government’s widespread media campaign exhorting its citizens to ‘Buy Irish’ was ruled a violation of free trade (Lasok 2001: 54).17 In 1997, France was cited for failing to ensure its farmers did not obstruct the passage of agricultural goods across their lands.18 Any topic of dispute that involves the movement of goods, even those that seem to fall under some other regulatory framework, have been resolved by the ECJ in favor of enabling trade. For example, a Member State’s refusal to reimburse an insured citizen for the purchase price of prescription glasses on the grounds the purchase had been made in another Member State was overturned as an unjustified trade barrier.19 The free movement of capital across borders and the elimination of restrictions inhibiting the free movement of capital was firmly established through the Bordessa judgment in 1995.20 The Court in Bordessa held that citizens had the right to export coins, currency, and bank drafts without obtaining prior authorization from either the country of origin or the destination country.21 The transfer of capital was generally the subject of the now repealed EC Arts. 67-73. Gradual liberalization of the restrictions on capital movement occurred through secondary legislation and the case law of the 14 These cases, including the subsequent Simmenthal cases, establish the principle that national legislation cannot override EC law. van Gend & Loos NV v. Inspector Invoerrechten en Accijnzen 26/62 (1963) ECJ; Costa v. ENEL: 6/64 (1964)ECJ; Simmenthal Spa v. EC Commission: 92/78 (1979), ECJ. 15 The only proviso is that the product must be legally produced and marketed. Some restrictions based on serious health or environmental concerns would also be allowed. 16 EC Commission v. Ireland 249/81 (1982). 17 Ibid. 18 EC Commission v.France: C-265/95 (1997) ECJ (involving the refusal to accept UK sheepmeat for processing). 19 Decker v. Caisse de Maladie des Employes Prives: C-120/95 (1998) ECJ. 20 Bordessa ECR 1-361 (1995). 21 Ibid. Again, a citizen could be either a natural person or a legal entity.

134


ECJ.22 Currently, the degree of liberalization achieved through the case law and the secondary legislation has been incorporated into the TEU.23 Specifically, EC Art 56 disallows restrictions on capital movement or payments not only between Member States but also between Member States and third countries.24 The free flow of capital and goods across the borders is complemented by the free flow of labor.25 The ECJ furthered protections for the free movement of people through a variety of avenues. The right of free movement and all the rights that flow from free movement can be invoked in the Court through EC Art. 39.26 The ECJ became involved in the freedom of movement early on because the treaties are silent as to the definition of a ‘worker’. In short, a worker is ‘a citizen of a Member State actually or potentially engaged in an economic activity for wages’ (Lasok 2001: 492). Not only do salaried workers as well as their families have the express right to relocate to any Member State,27 but also any individual may exercise the right of establishment. Establishment is ‘the right of a person to enter a Member State and establish himself or herself there for the purposes of carrying on economic activities … ’ (Lasok 2001: 515) in some capacity other than as a salaried worker. Even the pursuit of employment skills is now juridically protected. For instance in Gravier v. City of Liege, the ECJ held that a French student enrolled to study strip cartoon art in a state run Belgium academy could not be forced to pay a higher tuition than Belgian citizens.28 The ECJ has gone to great lengths to protect the free flow of labor, capital, and goods across the borders of the Member States. Along with these tangible elements of trade, the Court has also been determined to protect the more intangible elements of trade. For instance, the deregulation of the airline industry dramatically furthered by the ECJ’s decision in the Nouvelles Frontieres case where the treaty rules which governed competition were held to apply to the airline industry.29 The Member State regulation of professionals has been allowed only where the health and safety of consumers is at issue. That is, the ECJ has confirmed the principle that the TEU directly prohibits discrimination based upon nationality. In Reyners v. Belgium the Court held that a Dutch attorney with all appropriate qualifications to practice law in Belgium could not be prohibited from practicing law

22 see for example, the discussion in Association Eglise de Scientologie de Paris v. Prime Minister: C-54/99 (2000). 23 EC Art 56 et. seq. (ex. Art 73b et. seq.); see also, OJ 1997, L43/25; OJ 1997 L84/22; OJ 1998 L166/45. TEU is The European Union. 24 Ibid. 25 EC Arts. 39-42 (ex Arts. 48-51) as to salaried or hourly workers and EC Arts. 43-48 (ex Arts. 52-58) as to establishment. 26 EC Art. 39 (ex. Art 48). 27 See, for example, Re Belgian Prostitute, Queen of the Netherlands in Council (1976); Meeusen v. Hoofddirektie van der Informatie Bekeer Groep (1999) ECR I-3289, para 13, and cases cited therein. See also, Lasok at 492-500. 28 Gravier v. City of Liege 293/83 (1985). 29 Commission v. France C-167/73 (1974).


135

in Belgium simply because Belgian law dictated lawyers must be Belgian nationals.30 Three years later, a Belgian lawyer with a Belgian degree of doctor of laws earned a qualifying certificate for the profession of avocat from the Institute of Judicial Studies of the University of Paris II. The Paris Bar Council refused to allow him to register for practical training because he had not demonstrated that he had obtained a degree equivalent tot the French doctorate in law. The ECJ held this refusal to be indirect discrimination prohibited by EC Art 43 (ex Art 52).31 Similar rulings were issued regarding architects,32 insurance claims adjusters,33 as well as attorneys,34 doctors and dentists with practices in more than one Member State. 35 In short, the case law has established that national measures may not impede the exercise of fundamental economic freedoms secured by the Treaty unless the following four conditions have been satisfied (Lasok 2001: 520-24). Any such measure must: 1) apply in a non-discriminatory way; 2) be justified by imperative or mandatory requirements in the broad general interest of health and consumer welfare; 3) be appropriately designed to accomplish the goals or objectives of the measure; and, 4) be narrowly tailored to accomplish the goals or objectives of the measure. While anecdotally, the cases addressed above support the primary argument here, collectively, the case law is an overwhelming confirmation that the ECJ was established to facilitate trade. The first table36 below shows the volume of cases filed in the ECJ from its inception in 1953 through 2002.

Table 8.1

New cases in the European Court of Justice, 1952-2002 Direct Actions

1953-1962 1963-1972 1973-1982 1983-1992 1993-2002 Total

221 479 2351 2222 1754 7027

References for a Preliminary Ruling 6 178 898 1408 2349 4834

Appeals

Total

0 0 0 52 448 500

227 657 3244 3682 4551 12,361

30 2/74 (1974). 31 Thieffry v. Counseil de l’Ordre des Avocats de Paris 71/76 (1977). 32 Patrick v Ministere des Affairs Culturelles 11/77 (1977). 33 Van Ameyde v UCL 90/76 (1977). 34 Ordre des Avocats au Barreau de Paris v. Klopp 107/83 (1988). 35 Commission v. France re Registration of Foreign Doctors 96/85 (1986). 36 All tables compiled from the data drawn from the EUI Database, excludes Appeals and Applications for Interim Measures. These numbers represent the total number of cases without consideration of subsequent joinder.

136


Table 8.1 was compiled from data available in the EUI Database and excludes Applications for Interim Measures. These numbers represent the total number of cases without consideration of subsequent joinder. That is, each case represents one number even if at some later date, that case was joined with one or more other cases based on similarity of facts, parties, or issues. After taking consideration of joined cases and those cases not yet adjudicated, the ECJ issued 5,455 judgments during this time frame. Direct Actions are those actions directly against a Member State or institution seeking the annulment of a law, based on the failure to act, seeking damages, based on the failure to fulfill Community obligations, or based upon arbitration clauses. References for Preliminary Rulings are those instances wherein the ECJ responds to a national court from a Member State and gives guidance regarding the interpretation or application of Community law. After adjudication by the Court of First Instance, appeals to the ECJ may be based only on points of law. That is, the ECJ does not revisit the factual determinations made by the Court of First instance. Despite the expansion from 227 cases in its first decade of to 4551 in the last decade, the Court’s focus has not wavered from trade. Until the Court’s judgments in the Stauder case in 1969 and the Internationale Handelsgesellschaft case in 1970, individual rights were not considered primary to the Court’s activities.37 Accordingly, virtually all cases brought before the Court prior to 1970 involved trade. The expanding caseload and greater frequency of actions brought by individuals led to the creation of the Court of First Instance in 1989. Despite the two-tiered structure and the increased level of individual juridical activity, the emphasis remains on trade and commerce. The following two tables show the subject matter upon which actions were based in both the ECJ and the Court of First Instance. The various bases for jurisdiction have been categorized here as 1) Trade and Harmonization 2) Social Policy 3) Expansion and Institutions In both tables, the category of Trade and Harmonization entails actions based on the free movement of labor, goods, capital, or establishment;38 intellectual property; agriculture; customs, tariffs, competition, and customs unions; transportation and energy; the broad categories of industrial and commercial policy; and, those categories which entail harmonization of law between Member States. Social Policy is a discreet category. The category of Expansion and Institutions includes the accession of new states and laws governing the Community Institutions. While a simple review of the categories of jurisdiction identified by the Court itself indicates

37 See, Presentation A Court For Europe, www.cuira.eu.int/en/insit/presentationfr.; 11/70 (1970). 38 ‘establishment’ refers to the legal capacity to establish a commercial entity or pursue an economic livelihood.


137

the primacy of trade, an analysis of the recent caseload suggests trade is still of the utmost importance to the Court. Table 9.2 shows the basis of action for all the new cases filed in the European Court of Justice from 1997 through 2002. The information was compiled from data drawn from the EUI Database. The table excludes Appeals and Applications for Interim Measures. These numbers represent the total number of cases without consideration of subsequent joinder. That is, each case represents one number even if at some later date, that case was joined with one or more other cases based on similarity of facts, parties, or issues.

Tables 8.2

1997 1998 1999 2000 2001 2002 Total

European Court of Justice subject matter jurisdiction of new cases 1997-2002 Trade and Harmonization

Social Policy

399 429 496 444 457 430 2655

26 33 33 45 32 23 192

Expansion and Institutions 18 19 12 11 14 17 91

Total

Percent Trade

443 481 541 500 503 470 2938

90 89 92 89 91 91 90

As is clear from Table 9.2, trade issues account for roughly ninety percent of all the activity by the ECJ. It can be assumed that the strong skew towards trade is an artifact of the creation of the Court of First Instance – that is, since individuals are expected to go there first, few seeking relief for something other than a trade issue would be expected to turn to the ECJ. Such an assumption would be misguided. An analysis of the recent caseload indicates even the Court of First Instance is primarily concerned with trade. Table 9.3 shows the basis of action for all the new cases filed in the Court of First Instance from 1995 through 2002. The information was compiled from data drawn from the EUI Database. The table excludes Appeals and Applications for Interim Measures. These numbers represent the total number of cases without consideration of subsequent joinder. That is, each case represents one number even if at some later date, that case was joined with one or more other cases based on similarity of facts, parties, or issues. Trade issues account for ninety percent or more of the entire caseload of the Court of First Instance in every year other than the outlier year of 1997. The large number of actions regarding the accession of new Members during 1997 held strict trade issues to 50 percent.


138

Table 8.3

Court of First Instance subject matter jurisdiction of new cases 1995-2002 Trade and Harmonization

Social Policy

231 199 314 202 341 351 314 372 2324

5 8 4 10 12 7 1 3 50

1995 1996 1997 1998 1999 2000 2001 2002 Total

Expansion and Institutions 8 13 306 3 3 29 12 18 392

Total

Percent Trade

244 220 624 215 356 387 327 393 2766

95 90 50 94 96 91 96 95 85

Conclusion Taken as a whole, the enacting documents and cases and controversies indicate that the judiciary of the European Union was designed to and in fact has served as the nexus between peace and prosperity. It is much more than a mere theoretically-driven but unimportant institution. Rather, because trade was integral to the premise of economic inter-development across the member states, upholding trade agreements and the concomitant commercial contracts was critical to the survival of the European Union itself. Moreover, belligerent Member States and non-affiliated nations that might have used trade disputes as an excuse for trade wars have been held at bay through the provision of the administrative avenue for grievance provided by the ECJ and the Court of First Instance. Not only is a full remedy available, but the failure to avail oneself of the provided remedy is a breach of treaty by Member States and a breach of the law of nations by non-affiliated nations. This administrative avenue of credible dispute resolution will pave the way for continued expansion of the EU. Judicialization substantially lowers the risk of joining the Union while extending the time horizon for all trading partners. It is, and will continue to be, the key to European unification. References Chalmers, D. (1996). European Union Law: Law and EU Government 1-6. Brookfield: Ashgate Dartmouth Publishing. Dehousse, R. (1994). The European Court of Justice, The Politics of Judicial Integration New York: St. Martin’s Press. Depoorter, B., F. Parisis and P. Stephan (2003). The Law and Economics of The European Union. Newark: Matthew Bender & Co.


139

Emmert, F. (ed.) (1999). ‘General Tasks of the European Community’. European Community Treaty’. European Union Law Documents. Brussels: Kluwer Law International. Hallstein, W. (1962). United Europe Challenge and Opportunity. Cambridge, MA: Harvard University Press. Jacque, J. P. and J.H.H. Weiler (1990). ‘On The Road To European Union – A New Judicial Architecture: An Agenda for the Intergovernmental Conference’. 27 CML Rev. 185. Lasok , K.P.E. and D. Lasok (2001). Law and Institutions of the European Union. 7th edition London: Buttesworths. Lipges, W. and W. Loth(eds.) (1991). Documents On The History Of European Integration. Volume 4. Berlin: Walter De Gruyter. McKay, D. (2001). Designing Europe Comparative Lessons from the Federal Experience. Oxford University Press. Schuman, R. (1997). ‘The Schuman Declaration’. Documents on European Union. Stein, E. (1981). ‘Lawyers, Judges, and the Making of a Transnational Constitution’. American Journal of International Law.


PART III Socialization, Democracy and Legitimacy


Chapter 9

Democratizing and Socializing Candidate States: The Case of the EU Conditionality Brandon Kliewer and Yannis A. Stivachtis

In his preface to The Standard of ‘Civilization’ in International Society, Gerrit Gong argues that ‘anyone who has tried to join a club...or a society of some kind understands that certain standards distinguish between those who will be invited to become members from those who will not’ (Gong 1984: xi). Our historical experience indicates that for a state wishing to join an international society (regional or global) the situation is not at all different. In international society, even those states most willing to pursue their individual interests acknowledge the need for certain collective standards of international conduct if international order and the cohesion of the international society itself are to be maintained (Finnemore 1996). The global application of international norms became a reality for the first time during the nineteenth century through the expansion process of the European society of states and its gradual transformation into the contemporary global international society (Bull 1977; Wight 1977; Bull and Watson 1984; Watson 1992; Buzan and Little 2000; Stivachtis 1998 & 2003). In this process, the ‘standard of civilization’ played an essential role in determining which states would join the expanding European society and which ones would not (Gong 1984; Schwartzenberger 1955). However, before they join an international society or an international organization, candidate states are obliged to go through a socialization process. This is for two reasons. First, candidate states need to prepare themselves; so once they join, they are ready to undertake their duties and responsibilities; and second, and most important, they need to prove to the international society’s or to an international organization’s members that they are worthy potential members. Thus the socialization process plays a crucial role in the quest for legitimate membership of any social group. It is important to note that a desire for recognition as a ‘legitimate’ and ‘worth’ actor from a particular group to which an actor belongs or wishes to belong to, often results in conformity to the group’s shared rules and norms. The international society is not an exception. Like actors in a social group, states seek to identify themselves with the international society and accept the legitimacy of its social structures (Clark 2005). Conformity to rules and acceptance of the international society’s norms thus becomes not just something that results from a calculation of benefits, although this is by no means important. It is rather seen as ‘appropriate’; something that a state with a particular identity feels it must do

144


(Finnemore 1996: 28-31). Awareness of this dynamic can be seen from the fact that ‘shaming’ is often part of the socialization process (Risse et. al 1999: 14-15; Klotz 1995: 30-31). That is why failure on the part of a state to convince the members of the international society or an international organization to admit it as a new member may have very serious political ramifications for the international status and internal stability of the state in question (Zhang 1998). In The Enlargement of International Society, Stivachtis has argued that the contemporary global international society, which is culturally heterogeneous, includes a number of more culturally homogeneous regional international societies (Stivachtis 1998: 189). It has been convincingly shown that the European Union (EU) constitutes a regional homogeneous international society embedded in a heterogeneous European international system, which, in turn, is embedded in a heterogeneous global international system which is also a heterogeneous global international society (Diez and Whitman 2002; Riemer and Stivachtis 2002). Through the process of enlargement, however, the regional homogeneous European international society (EU) expands outwards gradually transforming the heterogeneous European international system, in which it is embedded, into a more homogeneous regional European international society. If one compares the process of the expansion of the historical European international society with the contemporary process of the European Union’s enlargement, one would arrive to the conclusion that the two processes are not very much different. Like in the nineteenth and early twentieth centuries when the European states had to define the conditions – the ‘standard of civilization’ – under which they could admit extra-European states into the international society they formed, EU Member States have had also to define the conditions under which they would admit candidate states. As a result, European states which aspired to EU membership need to meet the political and economic criteria associated with ‘membership conditionality’. If going through a socialization process was essential for extra-European states to be admitted into the expanding European society of states, so it is essential today for candidate states to go through a socialization process if they are to be admitted into the EU. If conforming to the ‘standard of civilization’ was crucial for a state to join the international society during the nineteenth and first half of the twentieth centuries, so it is crucial today that candidate states are able to conform to the EU ‘conditionality’ if they wish to join the EU (Stivachtis 2007). Like the ‘standard of civilization’, ‘membership conditionality’ is an expression of the assumptions used to distinguish those that belong to the expanding European Union from those that do not. Those who would fulfill the political and economic conditions set by the EU states will be brought inside while those that would not conform will be left outside. Like the non-European states before, EU candidate states had to learn to adjust themselves to new realities, even at some cost to their own societies. The purpose of this chapter is to examine the history, contents, and application of the EU ‘conditionality’ as a socialization mechanism. In so doing, it is divided into four sections. The first section discusses the idea of ‘membership conditionality’ as it is applied by various post-1945 international organizations. The second section examines the historical development of the EU conditionality while the third one investigates how the EU conditions are applied and implemented. The final section

Democratizing and Socializing Candidate States

145

discusses how the implementation of EU conditionality affects and encourages the democratization of the candidate states. Membership Conditionality According to Stivachtis, one of the successors of the old ‘standard of civilization’ is the ‘standard of political and economic performance’ reflected in the idea and policy of ‘membership conditionality’ (Stivachtis 2007: 4-5). The latter is practiced both at the global and regional levels by international organizations which constitute the visual expressions of the global and regional international societies respectively. The standard of ‘political performance’ (political conditionality) is largely based on the idea of democracy, which has emerged as the predominant form of political governance within the Westphalian international state system. This development has been strengthened by the emergence of an international norm that considers democracy spreading to be an accepted and necessary component of international behavior (Stivachtis 2006). For example, the widespread acceptance of democracy promotion as an international norm is clearly demonstrated by its embodiment in the activities of the UN. As an institutional organization, the UN was conceived and constructed on fundamental democratic principles, while the organization promotes democracy through its norm-creating ability. UN organs have promulgated considerable international law embodying cardinal principles and values of democracy, especially through human rights treaties and the progressive codification of democratic principles into international legal norms. Finally, the UN actively facilitates democratic principles and institutions internationally by promoting a democratic culture in states through monitoring and verifying national elections and holding referenda, which aim at fostering fairer and freer opportunities for the democratic process to work more openly and efficiently in newly emerging state societies (Morphet 2005). As a result, international law has undergone a gradual transformation in favor of recognizing democracy as an ‘entitlement’ to be both defended and promoted (Franck 1994). Moreover, democracy may be seen as representing the highest stage of the western-type ‘civilized’ statehood, which was first established and developed in Europe (Stivachtis 2006). ‘Political conditionality’ has been central to the enlargement policies of regional international organizations, such as the North Atlantic Treaty Organization (NATO) and the European Union (EU), as well as to the membership requirements of the Organization for Security and Cooperation in Europe (OSCE) and the Council of Europe (Lucarelli 2005; Schimmelfenning 2005a, 2005b & 2005c; Merlingen and Ostrauskaite 2005; Schimmelfenning, Engert and Knobel 2006 & 2003). ‘Political conditionality’ is also at the heart of the policies of global organizations, such as the International Monetary Fund (IMF) and the World Trade Organization (WTO) (Akonor 2006; Williamson 1983; Dell 1981). The standard of ‘economic performance’ (economic conditionality) is connected to the adoption of policies aiming at the restructuring of the domestic economies of the candidate states and, as an extension, at market liberalization. Therefore, the application of ‘economic conditionality’ assists the expansion of

146


capitalism. ‘Economic conditionality’ is closely tied to ‘political conditionality’ and figures prominently in the policies of global and regional organizations such as the IMF, WTO and the EU. In other words, a liberal political-democratic order – promoted through the application of ‘political conditionality’ – is seen as essential for the establishment and success of a liberal economic order promoted through the application of ‘economic conditionality’. In practice, however, ‘economic conditionality’ has not always worked in parallel with ‘political conditionality’. Thus ‘economic conditionality’ may be implemented by non-democratic regimes. All the above-indicated organizations provide a powerful incentive for aspiring members or assistance seekers to rethink their domestic political and economic arrangements by making democracy and market liberalization a precondition for membership or assistance. Moreover, what all these international organizations have in common is their tendency to promote a liberal international order. The Historical Development of the EU Conditionality Because the European Union started as an economic organization, the definition of the economic conditions that prospective countries should fulfill occurred from the very beginning. Since the European Economic Communities (EEC) was consisting of Western European capitalist states, ‘economic conditionality’ was not a crucial factor during the Cold War. It was the end of the Soviet Union, the collapse of communism in Eastern Europe, and the subsequent request of Eastern and Central European countries for EU membership that made ‘economic’ and ‘political conditionality’ a central feature of the EU enlargement. Unlike ‘economic conditionality’, ‘political conditionality’ has been an essential feature of the EEC enlargement since the 1960s. The formulation of ‘political conditions’ has undergone considerable evolution over time expanded to include substantive democratic requirements. The real beginnings of ‘political conditionality’ thinking came in the early 1960s, when the issue of new membership was first under discussion although it did not actually take place until 1973. It was the European Parliament (EP) that took the initiative through its Political Committee to issue a report on the necessary political and institutional conditions for membership and association status of the EEC. The Report stated clearly that ‘only states which guarantee on their territories truly democratic practices and respect for fundamental rights and freedoms can become members of the Community’. The Report also warned that ‘states whose governments do not have democratic legitimization and whose people do not participate in government decisions, either directly or through fully elected representatives, cannot aspire to be admitted into the circle of nations which form the European Communities’ (Pridham 2005: 30). Subsequent developments related to the relations between the EEC and the authoritarian states in Southern Europe (Greece, Spain, and Portugal) proved essential in assisting the definition of ‘political conditionality’ on the part of EEC. During this period, EEC encountered three main problems in the application of democratic conditionality (Prinham 2005: 34-35). First, there was a lack of coordination among


147

the various institutional bodies. Second, high politics intervened in determining when and how political requirements could be applied and even waived. Therefore, candidate countries had a better chance of success on the political level when they enjoyed the backing of major EEC states. Third, although there was an agreement that democracy was essential as a precondition for EEC membership, democracy tended to be regarded in official quarters as a single entity and not as a policy consisting of different elements. Applicant countries were viewed as either approved or not on political grounds. At the same time, various conditions were required, such as free elections, a constitution in place, the existence of political parties and a reasonably stable government. These criteria were not subject to any formal and regular monitoring. This situation remained basically the same until the fall of communism. The formulation of ‘political conditionality’ became a more central and proactive part of the overall enlargement process, influenced partly by concern over special problems relating to post-communist politics (Pridham 2002b: 205-6). This kind of ‘interventionist approach’, however, is no longer confined to post-communist applicant states as EU Member States are also subject to a democracy test since the 1997 Treaty of Amsterdam provided for suspension of those which infringed the EU’s principles of liberty, democracy, respect for human rights and fundamental freedoms and the rule of law. Specifically, since the end of the Cold War in 1989, the EU (then EEC) has made assistance and institutional ties – first informally and later formally – conditional on the fulfillment of democratic and human rights standards (Smith 2001: 37-40). Generally, these conditions become more stringent as external countries seek to upgrade their institutional ties with and assistance by the European Union. In January 1989, the European Parliament demanded that ‘reference to human rights should figure’ in the Trade and Cooperation Agreements the EEC was beginning to negotiate with the Central and Eastern European countries (CEECs) and should be mentioned specifically in the negotiating mandates given to the Commission. In April, the European Council made resumption of the negotiations with Romania conditional upon the country’s compliance with its human rights commitments in the CSCE framework. In November, the Paris European Summit established that ‘initiatives aimed at the countries of Eastern Europe as a whole are applicable only to those which re-establish freedom and democracy’ (Schimmelfenning, Engert, and Knobel 2005: 30). During his visit to Belgrade in May and June 1991, Jacques Santer, President of the Council, stated that Yugoslavia’s passage from the Cooperation Agreement to association ‘hinges on political conditions such as … progress in establishing democracy and respect for human rights and the rights of minorities’ (Schimmelfenning, Engert, and Knobel 2005: 30). After the dissolution of the Soviet Union, the European Commission confirmed that ‘negotiating … new types of agreements has to be subject to political conditions’. In May 1992, the European Council underscored that ‘respect for democratic principles and human rights … as well as the principles of a market economy, constitute essential elements of cooperation and association agreements between the Community and its CSCE partners’ (Schimmelfenning, Engert, and Knobel 2005: 30). Henceforth, the EU added a clause to the agreements that stipulated a suspension

148


of the agreements if partner countries failed to comply with these principles. In November of the same year, the European Council approved guidelines for PHARE, the EEC’s main program of assistance to the CEECs, which made aid conditional upon the ‘state of advance of the reforms in each of the beneficiary countries.’ On this basis, Croatia and Serbia-Montenegro have long been denied PHARE aid. In July 1993, the new regulations of the aid program for the former Soviet republics (TACIS) strengthened conditionality too: ‘The level and intensity of the assistance will take into account the extent and progress of reform efforts in the beneficiary country’ (Schimmelfenning, Engert, and Knobel 2005: 30). Finally, at its Copenhagen Summit in June 1993, the European Council established the ‘stability of institutions guaranteeing democracy, the rule of law, human rights and respect for and protection of minorities’ as the sin qua non for accession to the EU. Apart from defining the political conditions that candidate states should fulfill to gain entry into the European Union, the Copenhagen Summit specified also the economic conditions that should be met before a candidate country is accepted as an EU member. Specifically, in order to quantify EU norms and values, the Copenhagen European Council established the following criteria: 1. Membership requires that the candidate country has achieved stability of institutions guaranteeing democracy, the rule of law, human rights, and respect for the protection of minorities. 2. Membership requires the existence of a functioning market economy as well as the capacity to cope with competitive pressure and market forces within the Union. 3. Membership presupposes the candidate’s ability take on the obligations of membership including adherence to the aims of political, economic and monetary union. These political and economic conditions have been elaborated on in the European Commission’s (EC) Opinion of 1997 and from 1998 in the regular Annual Reports on candidate countries. The political conditions have been tied in with EU’s programmes of financial assistance, the accession partnerships and the whole pre-accession strategy (Papadimitriou and Phinnemore 2004; Knill and Lenschow 2005). It is worth mentioning that additions have been made to the original criteria – which were vaguely phrased – notably in the inclusion of the fight against corruption, prompted by growing evidence of widespread corruption in most post-communist states. Although one should expect a well-considered integrated approach to conditionality by the EU, in effect, there is no clear meaning attached to it. Thus, implementation of ‘political conditionality’ tends to be disaggregated. Actually, not unlike the ‘standard of civilization’, the evolving definition of ‘political conditions’ has been incremental, and sometimes ad hoc (Pridham 2002b: 206-7). However, the EU’s thinking on the ‘political conditions’ has evolved considerably. It has become more precise due to the need to improve analysis of how ‘political conditionality’


149

is being met (Pridham 2002a: 958). This change was influenced by criticisms of the first regular reports in 1998 that they lacked a clear methodology for objective cross-national comparisons between applicant states. This explains the seeming ambiguity in the Annual Reports which invariably say that given countries ‘fulfill the Copenhagen political criteria’ but still need to make further progress in meeting particular conditions. The EEC/EU has been criticized for demanding higher political standards of candidate countries compared with Member States (Pridham 2002a: 957). Despite these deficiencies in designing ‘political conditionality’, the EU provides a consistent and direct pressure for the introduction and elaboration of democratic rules and procedures but also civil and other rights. EU Conditionality: The Application and Implementation Process Applicant states seeking admission into the EU hope to gain social, political, and economic benefits that are associated with being a member state. However, before the EU acknowledges an applicant state as a member, the applicant state’s behavior must be modified to fit within liberal norms. The most predominant form of modifying applicant states behaviour is by establishing specific conditions for accepting principles of liberal-democracy. Conditionality of acceptance uses a reward system to entice applicant states to adopt EU norms. Heather Grabbe argues that the conditions have a ‘dual purpose’ within the accession process (Grabbe 2006: 250). Firstly, the conditions ensure that applicant states are prepared to handle the transition to full membership status. To reduce problems associated with accession, the EU only considers states that are politically and economically stable. Secondly, the conditions hope to reduce member states’ anxieties about accepting new members. EU countries worry that unprepared applicant states will pose a burden on EU member states. The dynamics of the accession process not only affect applicant states, but also pose a threat to EU order. Member States are suspicious of accepting additional states fearing their presence will fundamentally alter the nature of the EU. The accession process of the EU is designed to modify applicant behaviour while limiting change in the EU. However, regardless of how the accession process is designed when an enlargement occurs, the order within the EU will always change. Therefore, conditionality is taken very seriously when determining the acceptance of candidate countries. The dual purpose of conditionality hopes to identify when applicant states are prepared to make the accessions into the EU and when member states are willing to accept new members. However, the purpose of conditionality is undermined by many factors. One major challenge to conditionality is the clarification of vague instructions. All of the conditions can be interpreted very broadly, leading to confusion for both the EU and applicant states. The vague standards established in the Copenhagen Criteria lead to what Grabbe identifies as the ‘moving target problem’. The first and second conditions rely on vague concepts that are difficult to clearly define. Grabbe identified ‘democracy’, ‘market-economy’ and ‘the capacity to cope with competitive pressure and market forces’ as concepts that can have a wide range of understandings (Grabbe 2006: 251). Questions of what is meant by

150


democracy and what is meant by a market economy create unclear standards for accession. Without clearly defining these concepts, the EU is able to change the conditions meanings depending on the applicant state. The third condition is concerned with the acquis communautaire. The aquis is constructed from thirty-one chapters. Because each chapter is clearly demarcated, applicant states and the EU commission often focus attention on ensuring these chapters are satisfied (Grabbe 2006: 252). However, the achievement and effectiveness of meeting these chapters largely depends on the acquis ‘thickness’ or ‘thinness’. When the acquis has more precedent regarding a certain policy, the EU Commission has more power to influence applicant state behaviour. However, when the law is undeveloped or ‘thin’, applicant states have more leeway in negotiating what the law means. Weak areas in the acquis lead to variation in how conditionality is applied to applicant states behaviour. Unclear standards and variation in the treatment of applicant states during the negotiation phase of accession creates an asymmetrical power structure in favor of the EU. The European Commission has wide discretion in determining which applicant countries are prepared for the negotiation process. The ‘gate keeping’ role of the EU contributes to the ‘moving target problem.’ When the European Commission treats multiple applicants differently, it does not foster a clear understanding of what is meant by the conditions. Before 2000, EU discretionary powers to define conditions contributed heavily to the moving target. In 2000, the EU tried to address the moving target problem by creating the following policy in order to form a more systematic approach to the negotiation process. Currently, before negotiations are initiated, applicant states must have good relations with the EU. According to Grabbe applicant states’ ‘governments have to be politically acceptable and strongly oriented to the west to become a candidate for membership and it has to meet the democracy and human rights conditions to start negotiations’ (Grabbe 2006: 256). Although the EU attempts to establish clear standards, instructions still rely on vague concepts. The EU needs to create substantial indicators of what it means to be in ‘good relations’ with the EU. To make these standards more effective, the European Commission needs to standardize and more accurately define these concepts. The European Commission has tried to address some of these criticisms by creating yearly ‘Regular Reports.’ These reports indicate applicant countries progress in meeting the conditions for accession. In the report, the European Commission identifies problem areas that require improvements. These reports are now used to determine when it is appropriate for an applicant state to move to a new stage in the negotiation process. Often Regular Reports include the progress of ‘twinning’, which is an institutional exchange program designed to help applicant countries build administrative and democratic institutions similar to the EU. Public administrators from the EU advise applicant states in running EU modeled institutions while implementing EU policies. Twinning programs work concurrently with the Regular Reports to facilitate the accession process. The EU’s Regular Reports are helpful in defining the standards that must be met for accession into the EU. Regardless of the Regular Reports attributes of creating a more definite standard, the report has limited ability to influence state behavior. As opposed to other forms of persuasion, conditionality hopes to modify


151

applicant state behaviour through reinforcement (Schimmelfennig 2005: 106). Besides just meeting formal conditions of the Copenhagen Criteria and meeting the acquis, informal conditionality has developed. The European Commission often applies strong pressures on applicant states to meet unofficial standards. Informal conditionality has had a large impact in terms of addressing corruption within postcommunist countries. The EU commission has placed more importance on curtailing the negative effects of corruption in post-communist countries compared to other applicant states (Prindham 2005: 40). Usually, the EU commission relies upon five ‘levers’ of conditionality: (1) access to negotiations and further stages in the accession process; (2) provision of legislative and institutional templates; (3) aid and technical assistance; (4) policy advice and twinning projects; (5) monitoring, demarches and public criticism (Grabbe 2006: 261). Applicant states decide to meet EU conditions based upon a cost-benefit analysis. If the reward or incentive does not exceed the cost of compliance, the applicant state will not accept the conditions. If the conditions are not met, the reward will be withheld. If the applicant state rejects the conditions because the cost of implementation exceeds the reward, the EU has three reinforcement strategies. These strategies are as follows: reinforcement by reward, reinforcement by punishment, and reinforcement by support (Schimmelfennig 2005: 108). When the EU decides to use reinforcement by reward and the conditions are not met, the reward is withheld. If over time the cost of meeting the conditions change, applicant states will adjust their cost-benefit analysis. Institutional ties and financial assistance are most readily employed to entice compliance (Schimmelfennig et al. 2003: 496). Reinforcement by punishment attempts to modify the calculations of not accepting the promoted norms. Reinforcement by punishment works in a two-stage process. Firstly, the reward is withheld from the applicant state. Secondly, the EU imposes some type of punishment upon the applicant state in the hopes that the punishment will increase the cost of non-compliance. The desired effect is that the applicant state will believe that the cost of complying is less then non-compliance. According to Prindham, negative conditionality functions in an escalating three-step structure. The first step is known as verble, which is a written notification. The next offense escalates to demacle, meaning intervention. The final and most severe level of negative conditionality is a diplomatic note (Prindam 2005: 55). The third and final strategy of reinforcement is ‘reinforcement by support’. Reinforcement by support withholds the reward from the applicant state. However the EU provides support to the applicant state in efforts to reduce the cost of compliance. The support provided by the EU is designed to help the applicant state reduce the costs of compliance and accept the desired norms. Reinforcement strategies use social power to award desired behaviour while discouraging undesirable behaviour. According to Schimmelfenning, reinforcement strategies differ from persuasion in two fundamental ways. First, reinforcement is not based on open-debate. Reinforcement polices are exercised in an asymmetrical power structure. Incentives and disincentives are used to entice applicants to adopt desired norms. Secondly, reinforcement polices look to modify state behaviour over time. Incentives are intended to produce ‘stable behavioral compliance’ over

152


time. It is intended that rewards and incentives will reinforce positive behaviour while, eliminating negative behaviour (Schimmelfennig 2003: 498). Reinforcement policies hope to modify state behaviour through a series of incentives. The substance of the reinforcement strategies involves two components: material incentives and social reinforcement (Schimmelfennig 2005: 109). Material incentives involve tangible rewards. These rewards include but are not limited to the following: financial assistance, market access, technology experience and participation in decision. As an opposing concept, material reinforcement by punishment is when a dominant state increases the costs of non-compliance. The second substantive component is social reinforcement. Schimmelfenning suggests that ‘sociopsychological’ rewards, such as international recognition and public praise influence applicant states to adopt desired norms (Schimmelfennig 2005: 109). Rewards for accepting conditions must meet or exceed the cost of implementing the desired norms. There are four variables that influence the effectiveness of reinforcement strategies: determinacy, size of reward, punishment/support, and credibility (Schimmelfennig 2005: 110). Determinacy refers to the ‘clarity and formality of the rule’. When conditions are made clear, the conditions are more ‘legalized’, giving them a higher determinacy. Having high determinacy of norms is beneficial for two reasons. Firstly, a high ‘determinacy has informational value.’ A high degree of determinacy provides clear criteria for the applicant state to know what they must do to meet the conditions and receive the reward. The second benefit is that ‘determinacy enhances credibility of conditionality’ (Schimmelfennig 2005: 110). Determinacy also notifies applicant states that in order to receive the reward they most meet the conditions in the strictest sense. Applicant states cannot modify or interpret conditions to increase personal benefit. Furthermore, determinacy also allows applicant countries to hold dominant states to established agreements. When the conditions are met, dominant states must yield the rewards that were promised. The second variable that influences the effectiveness of reinforcement strategies is the size of rewards. This concept deals with whether the reward or fear of punishment is strong enough to convince the applicant state to accept the conditions. If a reward is not desirable, applicant states will not justify the effort or cost of compliance. Therefore, it is crucial to make the rewards desirable enough that applicant states can justify the costs associated with meeting the conditions. Credibility and conditionality is the penultimate variable that influences the effectiveness of reinforcement. Claims of granting or withholding rewards must be credible. The credibility of these claims relies on several factors. One factor is whether the European Commission is even capable of monitoring compliance. Member states must have the ability to accurately judge when conditions have been met and whether granting the reward is warranted. The European Commission plays a significant role in determining whether applicant states meet democratic conditions. The main responsibility of the Commission is to differentiate between applicant states that achieve and those that do not achieve the established conditions. Furthermore, credibility depends on the consistency of norm promotion. The decision to reward or withhold rewards must be done in a uniform manner. If political, strategic or economic considerations influence reinforcement strategies, dominant


153

states will loose credibility with future applicant states (Schimmelfennig 2005: 111). Consistency has been a significant problem in dealing with various applicant sates. Establishing consistency in how conditions have been applied to various applicant states has been difficult. According to Prindham, after the 1998 reports there was no ‘clear methodology for objective cross-national comparisons between applicant states’ (Prindham 2005: 41). The final variable is the size of domestic adoption costs. According to Schimmelfennig, when conditions have high determinacy and the reward system is credible, the effectiveness of reinforcement will depend upon the cost of compliance (Schimmelfennig 2005: 111). The most influential cost that applicant states will consider is the reduction to state autonomy and how that will affect the states ability to preserve power. It is apparent that conditionality often dilutes aspects of state autonomy. Furthermore, the identity construction and societal strength of the applicant state will also influence the size of domestic costs. Material incentives can entice applicant states regardless of their identity construction. However, social incentives are only helpful in norm promotion when applicant states desire being a member of the ‘ingroup’ (Schimmelfennig 2005: 111). Respect and recognition has little effect on influencing states that do not desire ‘in-group’ status. If there are powerful social actors present, these forces can influence governments to adopt norms. Although societal factors can be a powerful tool associated with influencing behavioral modification, some scholars have questioned the actual effectiveness of social influence. Prindham argues that integration especially in terms of economic conditions mainly involves ‘elite behavior patterns.’ In most cases, negotiating governments establish economic conditions, leaving little room for non-governmental and citizen groups (Prindham 2005: 14). Conditionality and Democratization The study of democratic consolidation includes, among other things, the study of international influences on democratization (Whitehead 1996; Pridham 2000). Among notions of international influences on democratization, ‘conditionality’ represents a deliberate effort to determine the process’s outcome through external pressure. This is achieved by specifying conditions or even preconditions for support, involving either promise of material aid or political opportunities. A special version is ‘democratic conditionality’, which emphasizes respect for and the furtherance of democratic rules, procedures and values. While other international organizations make such conditionality demands, it is the EU, which, most of all, has elaborated an extensive though not comprehensive policy of ‘democratic conditionality’. The latter has considerable leverage because the prize for compliance on the part of applicant states is full EU membership. According to Goetz and Hix, little attention has been paid by political scientists to European integration as an explanatory factor of political continuity and change in EU Member States (Goetz and Hix 2000: 1-2). As a response, considerable work has been done on the Europeanization of the new EU Member States, as well as on the

154


impact of conditionality and compliance on their political systems (Anderson 2002; Hughes et al. 2004; Schimmelfenning et al. 2003; Papadimitriou and Phinnemore 2004; Knill and Lenschow 2005). It has been claimed that the democratization effect is gradual and long term as a result of actual EU membership (Whitehead 1996: 19). However, Pridham has argued that it is possible that the integration impact is evident from the start of the democratization process although democratic consolidation normally takes a couple of decades to be achieved (Pridham 2002a: 954). This is due to the immediate pressures on candidate countries to satisfy ‘political conditionality’ both in advance of but also in parallel to membership negotiations. Indeed, the EU’s policy of ‘political conditionality’ provides a good basis for estimating integration impacts on democratization in candidate states. Linz and Stepan have argued that democratic consolidation is not only a much lengthier process than transition to democracy but also one with wider and usually deeper effects (Linz and Stepan 1996: ch. 1). It involves in the first instance the gradual removal of the remaining uncertainties surrounding transition, such as constitutional, elite behavior, resolution of civil-military relations or what is known as ‘negative consolidation’. The way is then opened for the institutionalization of a new democracy, the internalization of rules and procedures and the dissemination of democratic values through the activation of civil society and a ‘remaking’ of the political culture (Pridham 2000: 20). This process is known as ‘positive consolidation’. Democratic consolidation in its positive dimension is essentially about stabilizing and rooting substantive democracy, which goes beyond formal democracy into deeper areas of political life, notably civil society (Kaldor and Vejvoda 1999: ch. 1). Historical inheritances determine to a great extent the time required for achieving democratic consolidation. Therefore, it may be expected the democratization in excommunist countries to take a long time owing to their multiple transformation including economic system transformation and, in many cases, nation – and statebuilding. Consequently, democratic consolidation may be achieved at different points of time. The EU’s potential for impacting democratization varies between three broad stages: first, pre-negotiations (when the Copenhagen criteria have to be satisfied before negotiations commence); second, actual negotiations (when political conditions as updated are monitored regularly); and third, once membership begins (when the EU’s direct leverage over new entrants begins to weaken, but at the same time the indirect effects of European integration in helping to consolidate democracy increase through the very intensification of networking that goes with membership (Pridham 2002a: 957). Although the deeper effects of integration are most likely through the embedding of new democracies within the EU itself, the most decisive stages when direct effects are most effective remain the pre-negotiation and accession negotiation ones. During the first phase, negotiations may be blocked by a country’s failure to satisfy the political conditions, while during the second phase, negotiations may be interrupted or terminated if a negotiating country reverses its fulfillment of the political conditions, or chooses seriously to violate anyone of them. The procedure for dealing with the failure of candidate states to meet the prescribed ‘political conditions’ is slow. At the beginning, there would be advance


155

warnings in the annual regular report, and the European Commission would then set up an official visit to the country concern at the highest level. There would follow a period allowing for suitable action by the government. Failure to take any measures would be recorded in the next annual report. Eventually, if no measures are taken, then the matter would go to the European Council which would be responsible for halting negotiations for membership (Pridham 2002a: 958). Thus political monitoring of applicant countries is almost continuous. This procedure reflects the EU view of democratization as a ‘rolling process’ and not as a state that is reached at a certain point of time. Accession countries respond formally by making necessary institutional changes and passing relevant legislation. But their full satisfaction, including their implementation in practice, is not always easy to achieve due to financial, political and social constraints facing the candidate countries. The issue of implementing the ‘political conditions’ has come more to the fore, in parallel with the Commission’s growing attention to implementation in the regular reports, specifically with regard to the acquis communautaire. Clearly, achieving this goes well beyond the official level, involving actors like non-governmental organizations (NGOs), political parties and the media, not to mention the need to convert economic interests and public opinion where necessary. Pridham correctly asks the question: ‘how far can the EU really promote the satisfaction of its various political conditions?’ (Pridham 2002a: 959). Some problems are very difficult to deal with and legislation alone is by no means a sufficient response. It is the commitment to EU accession of national governments that is the most decisive factor. The Commission’s growing emphasis on implementation clearly entails involvement in domestic politics. Very important is cross-party consensus over EU accession, for that strengthens a government’s position in relation to both Brussels and domestic opinion. This does not necessarily exclude opposition criticisms of the government’s handling of negotiations. For instance, it has become a practice for opposition parties and the media to concentrate on negative comments in the annual progress reports, which has added to the pressure on governments to respond. High support on the part of national publics is likely to favour the political conditions, although it does not always act as a stimulus to their implementation. Conclusion Since the end of the Cold War, the EU has been the stage of a large-scale project of international socialization. When communism collapsed and the Soviet Union ceased to exist, European organizations proclaimed liberal democracy as the standard of legitimacy for the ‘new Europe’. Among other European organizations, the EU assumed the task of inducting the ex-communist Central and Eastern European countries to this standard and devised several programmes and institutional arrangements to assist and advance their democratic transformation. Among those programmes and institutional arrangements, conditionality has played a major role in the socialization and democratization of candidate countries.

156


The study of the democratization process in the Central and Eastern European countries has offered a set of important conclusions (Schimmelfenning et al. 2006; Priham 2005; Schimmelfenning and Sedelmeier 2005; Flockhart 2005; Haepfer 2002; Gill 2002; Zieloka 2001; Zieloka and Pravda 2001; Auer and Butzer 2001; Agh 1998). First, apart from being only long-term, integration impacts on democratization can also be of short or medium-term. These impacts, which are associated with ‘negative consolidation’, have not always been positive given the considerable pressures deriving from accession. Still fragile new democratic states undertake the heavy duty of implementing change, involving tight economic as well as specific political conditions but also extensive tests of their ‘ability to assume the obligations of membership’. It is important here to distinguish between ‘enacting legislation’ and ‘implementing legislation’. Although all new EU members have enacted comprehensive legislation to deal with the application of the EU ‘political conditions’, the difference between them has been the degree in which legislation has been implemented. This difference can be explained with reference to the different country conditions, governmental stability and the variation of the governments’ commitment to reform. The commitment to implementation, however, is to a significant extent determined by the political, economic and social conditions facing national governments. But as it has already been said, historical inheritances determine to a considerable extent the time required for achieving democratic consolidation. Second, institutional arrangements are not always easy to implement, while some ‘political conditions’ cannot be satisfied merely by institutional or legislative changes. This particularly applies to the anti-corruption drive, human rights and the protection of minorities. In all these cases, satisfactory conditions include, ultimately, changes in human behaviour, which are much more difficult to bring about. It is worth mentioning that even some EU Member States may also score very low on these issues. This is why a clear distinction should be drawn between institutional and societal levels. Public prejudice, in particular, is a very difficult situation that governments are faced with and it usually takes a long time to deal effectively with it. It requires a great commitment from the government to educating the public on issues where prejudice is central. Third, in post-communist states corruption is a serious problem, deriving in part from the previous regimes, but also from the way in which the market has operated, often involving close links between economic oligarchies, public agencies and political elites (Rose 1998: 253-5). Other major issues are the separation of judiciary from politics, the legislation process, administrative coordination, the trafficking of human beings, the demilitarization of the police and police brutality, the treatment of the Roma minority, and the treatment of children and disabled and mentally handicapped people. Fourth, due to the lack of conceptualization and the EU fragmented procedures, ‘democratic conditionality’ is not all-inclusive in its scope. Thus when measured against the key indicators of democratic consolidation, an obvious gap in the EU’s political conditions is evident over civil society. The EU may strengthen the executive and bureaucratic power of a candidate state without active popular engagement.


157

This creates a potential for widening the gap between political elites and masses, already a problem in many post-communist democracies; and, hence, for creating disillusionment when democratic attitudes have not fully taken root. It has been argued, this would raise questions about Europeanization and democratization possibly pulling in different directions (Bideleux 2001). Hence the need of a better EU understanding of the meaning of ‘democratic consolidation’ as such conceptual understanding underlies policy choice. In other words, there might be faults inherent in the design of the EU’s political conditions that might cause problems for countries seeking to achieve democratic consolidation. Despite its shortcomings, the current state of affairs in the ex-communist states indicate that the their socialization process has been quite successful and that the policy of EU ‘conditionality’ has contributed significantly to the ‘negative consolidation’ of democracy in the countries concerned while it has paved the way for the attainment of ‘positive consolidation’, which is a much lengthier process. References Agh, Attila (1998). Emerging Democracies in East Central Europe and the Balkans. Cheltenham: Edward Elgar. Anderson, J.J. (2002). ‘Europeanisation and the Transformation of the Democratic Polity, 1945-2000’. Journal of Common Market Studies. Vol. 40, no. 5, pp. 793822. Auer, Andreas and Michael Butzer (eds.) (2001). Direct Democracy: the Eastern and Central Europe Experience. Aldershot: Ashgate. Bideleux, R. (2001). ‘Europeanisation and the Limits to Democratisation in East-Central Europe’. In Geoffrey Pridham and A. Agh (eds.), Prospects for Democratic Consolidation in East-Central Europe. Manchester: Manchester University Press. Bull, Hedley and Adam Watson (eds.) (1984). The Expansion of International Society. Oxford: Clarendon Press. Bull, Hedley (1977). The Anarchical Society: A Study of Order in World Politics. London: Macmillan. Buzan, Barry and Richard Little (2000). International Systems in World History. Oxford: Oxford University Press. Clark, Ian (2005). Legitimacy in International Society. Oxford: Oxford University Press. Diez, Thomas and Richard Whitman (2002). ‘Analysing European Integration: Reflecting on the English School – Scenarios of an Encounter’. Journal of Common Market Studies. Vol. 40, no. 1, pp. 43-67. Falkner, G. (2001). ‘How Pervasive are Euro-politics?: Effects of EU Membership on a New Member State’. Journal of Common Market Studies. Vol. 38, no. 2, pp. 223-50. Finnemore, Martha (1996). National Interests in International Society. Ithaca: Cornell University Press.

158


Flockhart, Trine (ed.) (2005). Socializing Democratic Norms. Basingstoke: Palgrave. Franck, Thomas M. (1995). Fairness in International Law and Institutions. Oxford: Clarendon Press. Franck, Thomas M. (1994). ‘The Emerging Democratic Entitlement’. In Anthony D’Amato (ed.), International Law Anthology. Cincinnati, OH: Anderson, pp. 36773. Gill, Graeme (2002). Democracy and Post-Communism. London: Routledge. Goetz, K. and Hix, S. (eds.) (2000), ‘Europeanised Politics? European Integration and National Political Systems’, Special Issue of West European Politics, Vol. 23, no. 4, October, Introduction. Gong, Gerrit (1984). The Standard of Civilization in International Society. Oxford: Clarendon Press. Grabbe, Heather (2006). The EU’s Transformative Power: Europeanization through Conditionality in Central and Eastern Europe. Basingstoke: Palgrave. Grabbe, Heather (1999). A Partnership for Accession? The Implications of EU Conditionality for the Central and Eastern European Applicants. EUI. Grabbe, Heather (1998). Enlarging Europe Eastward. London: Cassell. Haepfer, Christian W. (2002). Democracy and Enlargement in Post-Communism Europe. London: Routledge. Hughes, J., G. Sasse, and c. Gordon (2004). ‘Conditionality and Compliance in the EU’s Eastward Enlargement: Regional Policy and the Reform of Sub-national Government’. Journal of Common Market Studies. Vol. 42, no. 3, pp. 523-51. Kaldor, M. and I. Vejvoda (eds.) (1999). Democratization in Central and Eastern Europe. London: Pinter. Klotz, Audie (1995). Norms in International Relations. Ithaca: Cornell University Press. Knill, C. and A. Lenschow (2005). ‘Compliance, Competition and Communication: Different Approaches to European Governance and their Impact on National Institutions’. Journal of Common Market Studies. Vol. 43, no. 3, pp. 583-606. King, Roger and Gavin Kendall (2004). The State, Democracy and Globalization. Basingstoke: Palgrave. Linz, J. and A. Stepan (1996). Problems of Democratic Transition and Consolidation: Southern Europe, South America and Post-Communist Europe. Baltimore: John Hopkins University Press. Lucarelli, Sonia (2005). ‘NATO and the European System of Liberal-Democratic Security Communities’. In Trine Flockhart (ed.). Socializing Democratic Norms. Basingstoke: Palgrave. Merlingen, Michael and Rasa Ostrauskaite (2005). ‘The OSCE: The Somewhat Different Socializing Agency’. In Trine Flockhart (ed.). Socializing Democratic Norms. Basingstoke: Palgrave. Morphet, Sally (2005). ‘The UN, democracy and Europe since 1945’. In Trine Flockhart (ed.). Socializing Democratic Norms. Basingstoke: Palgrave. Muravchik, Joshua (1992). Exporting Democracy. Washington D.C.: AEI Press. Papadimitriou, D. and D. Phinnemone (2004). ‘Europeanisation, Conditionality and Domestic Change’. Journal of Common Market Studies. Vol. 42, no. 3, pp. 619-39.


159

Pridham Geoffrey (2005). Designing Democracy: EU Enlargement and Regime Change in Post-Communist Europe. New York: Palgave. Pridham, Geoffrey (2002a). ‘EU Enlargement and Consolidation Democracy in Post-Communist States – Formality and Reality’. Journal of Common Market Studies. Vol. 40, no. 3, pp. 953-73. Pridham, Geoffrey (2002b). ‘The European Union’s Democratic Conditionality and Domestic Politics in Slovakia’. Europe-Asia Studies. Vol. 54, no. 2, pp. 203-27. Pridham, Geoffrey (2000). The Dynamics of Democratisation: A Comparative Approach. London: Continuum. Riemer, Andrea and Yannis A. Stivachtis (2002). ‘European Union’s Enlargement, the English School of International Relations and the Expansion of Regional International Societies’. In Andrea K. Riemer and Yannis A. Stivachtis (eds.). Understanding EU’s Mediterranean Enlargement. Frankfurt: Peter Lang. Risse, Thomas and Kathryn Sikkink (1999). ‘The Socialization of International Human rights Norms into Domestic practices’. In Thomas Risse, Stephen C. Ropp and Kathryn Sikkink (eds.), The Power of Human Rights: International Norms and Domestic Change. Cambridge: Cambridge University Press. Rose, R. (1998). ‘Two Cheers for Democracy’, The World Today, October. Schimmelfenning, Franck, S. Engert and H. Knobel (2006). International Socialization in Europe: European Organizations, Political Conditionality and Democratic Change. Basingstoke: Palgrave. Schimmelfennig, Frank and U. Sedelmeir (2005a). The Politics of European Union Enlargement: Theoretical Approaches. London: Routledge. Schimmelfennig, Frank and U. Sedelmeir (eds.) (2005b). The Europeanization of Central and Eastern Europe. Ithaca: Cornell University Press. Schimmelfennig, Frank (2005c). ‘The EU: Promoting Liberal Democracy through Membership Conditionality’. In Trine Flockhart (ed.). Socializing Democratic Norms. Basingstoke: Palgrave. Schimmelfenning, Franck, S. Engert and H. Knobel (2003). ‘Costs, Commitment and Compliance: The Impact of EU Democratic Conditionality on Latvia, Slovakia and Turkey’. Journal of Common Market Studies. Vol. 41, no. 3, pp. 495-518. Schraeder, Peter J. (ed.) (2002). Exporting Democracy. Boulder: Lynne Rienner. Schwartzenberger, Georg (1955). ‘The Standard of Civilization in International Law’. In George W. Keeton and Georg Schwartzenberger (eds.). Current Legal Problems. London: Stevens & Sons. Stivachtis, Yannis (2007). ‘Conditionality: A New Form of the Old Standard of ‘Civilization’: The Case of EU Conditionality’. Paper presented at the 48th ISA Annual Convention, Chicago, February 28th – March 3rd, 2007. Stivachtis, Yannis (2006). ‘Democracy: The Highest Stage of ‘Civilized’ Statehood’. Global Dialogue. Volume 8, no. 3-4, Summer/Autumn 2006. Stivachtis, Yannis (2003). ‘Europe and the Growth of International Society: ’. Global Dialogue. Vol. 5, no. 3-4, pp. 87-99. Stivachtis, Yannis (1998). The Enlargement of International Society. Basingstoke: Macmillan. Watson, Adam (1992). The Evolution of International Society. London: Routledge. White, Martin (1977). Systems of States. Leicester: Leicester University Press.

160


Whitehead, Lawrence (ed.) (1996). The International Dimensions of Democratization. Oxford: Oxford University Press. Zhang, Yongjin (1998). Alienation and Beyond. Basingstoke: Macmillan. Zieloka, Jan (ed.) (2001). Democratic Consolidation in Eastern Europe. Volume 1. Oxford: Oxford University Press. Zieloka, Jan and Alex Pravda (eds.) (2001). Democratic Consolidation in Eastern Europe. Volume 2. Oxford: Oxford University Press.

Chapter 10

Political Representation in the Central and Eastern European Democracies James E. Lennertz

[R]epresentation means the making present of something that is nevertheless absent, ... (Pitkin 1967: 237). Electoral systems matter. They are a crucial link in the chain connecting the preferences of citizens to the policy choices made by governments. They are chosen by political actors and, once in existence, have political consequences for those actors. (Gallagher and Mitchell 2006: 2)

This chapter will compare institutional developments in Central and Eastern Europe during and since the transition from single to multi-party governance with concentration on the transformation of the representational structures of the national parliaments and assemblies. Differences abound on several dimensions: the role of political parties, separation of powers and presidentialism, the number of parliamentary chambers, proportional representation and single member districts, minority rights, electoral thresholds and tiers, and judicial review. The purpose of this inquiry is not to evaluate Central and Eastern European developments by mechanical application of standards from western democracies; rather these concepts provide a frame of reference for understanding the relationship between institutional choice and the culture of popular control. Nowhere is this truer than in Central and Eastern Europe where, after being stifled for nearly a half century, the commitment to popular control has burst forth, often with energy outpacing structural and procedural development. It is thus expected that the particular history of Central and Eastern European nations and the dynamics of transition, combined with a nation’s more traditional political culture, help to shape institutional change (Howard 1997: 54-5). By the same token, institutional change can be expected to shape the continuing evolution of the culture of popular control, though, it will be contended, not always in a simple and expected way. This analysis grows out of and beyond my study of legislative apportionment and districting in the United States. That work has led me to three tentative conclusions. First, rights-based, court-centered constitutional developments have been detached from the historical, philosophical and social scientific traditions of representation. Second, modern developments reflect and reinforce pluralist rather than republican conceptions of humanity, society, and politics. Third, although sensitivity to distinctive national contexts is important, comparative analyses could critically enlighten the fundamental questions of representation. The basic thesis of this

162


analysis is that political systems should develop structures, processes and a culture of representation that facilitate democratic, civic relationships. Such development is more likely to occur if one admits the political nature of representation and moves beyond a formal mathematical framework. The widely shared concern about fairness, human rights, and social justice in these countries is related to another, and perhaps deeper, element of the political culture of the region: the idea of community. While most Eastern Europeans and Russians may not have supported the ‘real socialism’ of the Communist era, many supported socialist ideals, particularly the notion of community. (Mason 2003, 48)

Political representation is a complex process which describes civic relationships among citizens and representatives. While it is undoubtedly true that representation should in some meaningful and relatively faithful way reflect critical dimensions of a constituency, the selection and integration of those dimensions always presents a creative challenge. Moreover, representation is dynamic and interactive – forming around commitments to common tasks (Ortega y Gasset 1932: 183). In this regard, while structural arrangements are neither self-executing nor absolutely effective, the choice of institutional process can have a significant impact upon the representational relationship. While ‘[r]epresentation is a metaphysical puzzle, a presence by virtue of an absence’ (Pitkin 1967: 237), modernization in the West has converted the concept from one of embodiment to one of mere artificial unity. By this is meant that representation has been reconceived from an organic to a mechanical process. Yet, neither the critical questions of representation, nor their answers, are self evident (Mensch and Freeman 1989: 612-4; de Grazia 1951: 99). The meaning and operation of representation may be considered on three levels. First, representation shapes and is shaped by those social relationships that constitute the community. Second, representation comprises those political processes devoted to the resolution of public matters. Third, representation relates to the administration of government. In our contemporary age, the concentration on pluralism and administrative efficiency has emphasized the latter two to the detriment of the first. Similarly, Pitkin indicates that representational issues relate to the character of political issues on a continuum of human choice. As polar types, Pitkin contrasts matters of taste and questions of knowledge. The former are purely subjective and contention about their satisfaction is subject to bargaining rather than rational persuasion. The latter are technical and subject to unique, expert solutions. Political questions are found in the intermediate range along the continuum, involving mixed issues of fact and value. Therefore, political processes, including representation, must strike the appropriate balance between bargaining and deliberation, the politics of noise and the politics of speech (Lennertz 1984: 121). Systems of representation can affect the level and character of interaction; an adversary system drives out the middle ground, reducing most things to matters of taste or to questions of expertise to be delegated to administrative experts. It is in relation to those public issues that combine elements of objective expertise and inter-subjective evaluation that a

Political Representation in the Central and Eastern European Democracies

163

political representative can facilitate civic conversation and resolution (Pitkin 1967: 211-2). Representation is inherently political because it involves value choice. To create a structure and process for selecting representatives is to group citizens; such grouping, whether intended or not, significantly affects not only which persons and groups are emphasized and de-emphasized in the presentation of their perspectives, but also which interests and positions are advantaged. Even a ‘random’ selection, by its capacity to mirror the mass public would more strongly capture mass values. Representation and the Political Parties Institutional choice lies at the heart of the politics of transition. (Frye 1997: 523) On what basis do political actors choose an electoral system? The rational actor paradigm might suggest that the answer is obvious: actors’ preferences are determined by their perception of their own self-interest. Maybe matters are not always quite so simple in real life, though.... As motivations, partisan advantage and non-partisan national interest are not always easy to distinguish empirically, however different they may be conceptually . (Gallagher 2006: 538)

One might have two expectations with respect to the relationship between parties and emerging electoral systems in Central and Eastern Europe. First, a rationality model would suggest that actors make choices on the basis of self-interest rather than the public interest (Benoit 2006: 243; Chan 2001: 65). Second, a structural model would suggest that electoral systems shape the development of political institutions and culture. [T]he choice of electoral system has a significant effect on the nature and style of political parties. List systems breed centrally dominated, programme oriented parties. Regional list systems encourage the formation of parties based on regional, ethnic, or tribal identity. The higher the threshold, the fewer the parties that thrive or survive. Constituencybased single-seat majoritarian systems diminish proportionality and put a premium on philosophic debate of intellectual rigour. The competing claims of proportionality versus accountability are exaggerated by such systems rather than being diminished (Patzelt 1994: 447).

However, the reality is much more complex and interactive. Self-interest and public interest are interwoven, not only in the thinking of particular actors but also in the formative interactions of multiple actors (Benoit 2006: 232; Malova and Haughton 2002: 104). These periods in particular are ones of significant uncertainty, which promote ‘minimax’ strategies (Frye 1997: 523; Gallagher and Mitchell 2006: 4). Moreover, not even periods of revolutionary change ‘write on a blank slate.’ Tradition and pre-existing institutions act upon the decisions of the founding period (Gallagher 2006: 535). The mode of transition to democracy will also influence the direction and style of change (Boix 1999: 622). Finally, informal change occurs within the context of the original ‘template,’ as subsequently adjusted. In Hungary, for

164


example, coalition partners often divide up seats to restrict head-to-head competition (Benoit 2006: 248). Presidential versus Parliamentarianism The essence of pure parliamentarianism is mutual dependence … . The essence of pure presidentialism is mutual independence. (Stepan and Skach 1993: 1) [T]he formal powers of the presidency vary greatly across the region. (Frye 1997: 523)

Although there is a general pattern of strong presidentialism in Russia and strong parliamentarianism in other Central and Eastern European democracies (Holmes 1993: 37), there is considerable variation (Ludwikowski 1998: 35). The Baltic States, for example, vest predominant authority in their parliaments, while the Romanian system is semi-presidential – on the French model. Indeed, many nations have seen more complex and unique formal and informal developments fueled by charismatic political figures and/or political vacuums (Malova and Haughton 2002: 115). In addition, there have been changes in several countries, most notably Poland and Slovakia (Chan 2001: 65). Despite these important variations, these ‘experiments’ have generally and ultimately resulted in the consolidation of parliamentary authority (Frye 1997: 523). Many believe that parliamentarianism increases accountability and effectiveness because it facilitates an equilibrium between commitments to democratic values and the pressures of political, social and economic transformation (Stepan and Skach 1993: 1). However, there have been concerns about the absence of separation of powers and checks and balances as protections against a tyranny of the majority. Nonetheless, the strengthening of the presidency, especially with the overlapping and ambiguous powers of the hybrid systems, can be a ‘double-edged sword’ which can amplify as well as dampen constitutional crisis (Frye 1997: 523).1 Bi- or Unicameral Parliaments The general trend in the region is toward unicameralism (Ludwikowski 1998: 35). Two large states – Poland and Romania – are bicameral. Others – Slovenia and the Czech Republic – have upper chambers that result from historical and political concerns and are largely advisory in authority (Malova and Haughton 2002: 110). Proportional, Majoritarian and Mixed Systems In accordance with the prevailing norms in Western Europe, CEE [Central and Eastern Europe] countries have tended to opt for proportional representation electoral systems rather than using the plurality formula. Hungary and Lithuania with their mixed PR/ plurality systems are exceptions to this general trend. Even within PR, however, there 1 These concerns may also apply to the emergence of judicial review by constitutional courts. See discussion at pages 170–1, below.


165

are variations. Just as Western European systems differ as to the number and magnitude of constituencies, the existence and type of party list and the methods for counting votes and remainders, so the PR systems instituted in CEE differ from each other. (Malova and Haughton 2002: 113) During the 1990s, the focus of the debate on election methods shifted from the dichotomy between the PR and plurality/majority systems to the question of whether it was possible to find a mixed model that would combine the best features of these two systems – stability and representativeness. (Ludwikowski 1998: 25)

It should not be surprising that compromise during the ‘founding’ period resulted in complex models which often were hybrids of several systems (Ludwikowski 1998: 2). Bulgaria (Malova and Haughton 2002: 101). Hungary (Benoit 2006: 235)2, and Poland (Malova and Haughton 2002: 114) each combined proportional representation lists with single member constituencies. While Romania, the Czechoslovak Federal Republic, as well as the separate and independent Czech and Slovak republics all used proportional representation, even there substantial qualifications limited the ability of the system to produce results that perfectly reflected national voting preferences. Each system has significant thresholds which tend to depress candidate proliferation and party fragmentation. Moreover, Romania uses regional lists in which results are influenced by the geographic distribution or concentration of support (Nelson 1990: 355). Finally, the Czech Republic has developed a model for a Senate which uses single member constituencies (Malova and Haughton 2002: 110). Surprisingly, the Hungarian system has evolved from a multi-party to a virtual two-party system (Benoit 2006: 232). This happened because of the inter-dependent way in which the single member districts (SMD) and the regional and national lists work (Gallagher 2006: 545). In the other postcommunist mixed-member systems, the SMD and list mechanisms operate independently. In the Hungarian system, by contrast, the SMD and list mechanisms are linked by rules that govern the qualification for candidacies and lists. In short, every party that runs a list has an incentive to field candidates in as many SMDs as possible. This creates a tight marriage between party lists and party candidates, causing parties to look first to the SMDs and secondarily to the lists. (Benoit 2006: 243)

Single member districts, thresholds, and regional lists cause results to deviate from strict national proportionality. In its sixteen-year existence, Hungary’s electoral system has operated in four elections and seen four governments (although one was a rerun). It has been responsible for strange outcomes, like the fact that the party with the second most votes won the plurality of the seats in both the 1998 and 2002 elections, or the fact that even with a strong PR 2 See also Benoit 2006, pp. 242-3: ‘Few voting systems in the world possess a feature set as rich as the Hungarian electoral law, which incorporates three distinct sets of districts, a mixed-member system, a two-round system (2RS) (using two different criteria for runoff qualification), two potentially separate legal thresholds, two different sets of rules for proportional representation (PR), plus a few additional twists related to the implementation of a PR formula apparently found only in Hungary....’

166

The State of European Integration component and a compensatory list mechanically capable of supporting many parties, the tendency in the past two elections has been reduction to a near two-party system. (Benoit 2006: 231)3

The effects of an electoral system, however, are not limited to candidate outcomes. Both the size and nature of the constituency shape the relationship between the representative and the constituents. Thus, having a smaller constituency and fewer mandates in a district makes the opportunity for popular participation stronger. Gallagher and Mitchell (2006: 11) distinguish open and closed list systems by using the principal-agent model to identify the open list system’s ‘principal’ as the voters and the closed list system’s ‘principal’ as the parties. There is also concern for population equality throughout the region. The frequent use of pre-existing jurisdictional unit boundaries as district lines, however, make it unlikely that adherence to this principle will approach the level of meticulousness expressed in the United States by the one person, one vote rule. Ishiyama (1995: 487) compares the consequences of the two variations – the single transferable vote (STV)4 in Estonia and the additional member system5 in Hungary. These two systems exemplify many of the trade-offs among systems. STV promotes local perspectives and the emergence and persistence of minor parties, regions, and ethnic groups. It also obstructs the formation of strong parties (Ishiyama 1995: 487). The additional member system promotes nationally-oriented parties with strong balanced relationships between local and national party organizations. However, unlike STV, the additional member system may inhibit close parliamentarianconstituent ties. Observers should also note that informal developments, including conscious attempts to manipulate the rules, can mitigate and sometimes frustrate formal structures and tendencies (Gallagher 2006: 543). Indeed, in the Hungarian case, a growing tradition of mutual withdrawals of candidates between electoral rounds has helped propel Hungary toward a virtual two-party system (Benoit 2006: 232; Gallagher 2006: 545).

3 Note that the Socialists were re-elected in April 2006. Recently a Hungarian political crisis was triggered by revelations that Prime Minister Ferenc Gyurcsány and his government lied about societal conditions and public policies during the 2006 campaign in order to ensure their re-election to majority status (BBC News [website] 26 September 2006; see also Gyurcsány, 6 October 2006). 4 STV balances proportionality and candidate identification by establishing modestly sized multi-member districts and by transferring ‘moot’ votes to a voter’s second and lower preferences. (‘Single Transferable Vote,’ Wikipedia).. 5 ‘The Additional Member System (AMS) is a voting system in which some representatives are elected from geographic constituencies and others are elected under proportional representation from party lists.’ (‘Additional Member System,’ Wikipedia).


167

Minority Rights – Managing Ethnic Difference [S]elf-determination, through its contribution to the creation of numerous post-Cold War states, contributed not to a dramatic increase in the number of democracies, but rather, to the tragically undemocratic climate in which ethnic-nationalism, advancing under the names of self-determination and democracy, has blossomed into a new, totally credible force. (Miller 2003: 608) Overall, the results offer little evidence that ethnic pluralism influences democracy. Finally, several case studies illustrate the relative unimportance of demography in determining the level of democratic consolidation and identify alternative explanations for the range of outcomes. (Radnitz 2004: 576)

If one considers models of representational equality that are not purely quantitative (Samuels and Snyder 2001: 651), then what is the relationship between majority and minority? Some would argue that there is a difficult tension between majority and minority tyranny that can only be managed with a strong constitutional structure. Complicating this problem would be the presence of a ‘permanent minority’ whose political power was systematically marginalized. A minority is systematically marginalized if voting groups’ identities and boundaries are firm and the minority has no reasonable opportunity to become part of the ruling coalition (Guinier 1994: 77). Again, this approach is most problematic for liberals who place such emphasis on voting and electoral participation. Moreover, one must consider the overall orientation of the system toward assimilating or sustaining the minority. A liberal pluralist conception dissolves the majority/minority issue in a particularly insidious way. It is important to distinguish between plural societies – with a relatively small number of highly segmented and divisive group cleavages – and pluralist societies – with a relatively large number of politically significant groups with cross-cutting membership and interests. This is very important because the prospects for peaceful change toward democracy may depend on whether differences are ‘bargainable.’ The persistence of race and ethnicity is particularly problematic for this liberal approach to political development. If liberals are to play a role in a process of constitutional nationalism, they must come to grips with the reality of ethnicity in politics, and with the controversial notions of group and minority rights. Historically, liberals have underestimated the force of ethnicity in politics, because of their political focus on individual freedom. They have assumed that the individual possesses inalienable rights to be respected by the state, to which the individual stood in a direct relationship. The intermediate relationship to ethnicity, that is, of individual to ethnic group, was viewed as retrogression in the individual’s selfdevelopment. Even today, many liberals still view the conflicts that result from opposing group interests as prejudices which impartial use of reason should readily resolve. Yet liberals should not, I believe, ignore ethnicity in favor of a concept of abstract rationality; the sense of belonging that ethnicity fosters should be respected as a legitimate way in which individuals can define themselves. (Degenaar 1987: 242)

168


In this regard, one should note that language has a critical political, as well as a cultural, function. Critical to the development of a stable and open pluralist society are intermediate groups, which perform four functions. First, they are small enough to provide meaningful opportunities for participation. Second, they act protectively vis-à-vis state power over the individual. Although most of the Eastern European countries guarantee free association to communal groups, it is not uncommon for the dominant ethnic majority to conceive of the state rather than an ethnically-based party as the representative and ultimate protector of the constituent groups. Indeed, some government statements emphatically deny any collective – as opposed to individual – claims to ethnic minority rights, including representation (Sidlo 1994: 4). Third, the development of cross-cutting cleavages and mixed interaction among structural interest groups may eventually ‘override’ ideological and plural cleavages. Fourth, and as a consequence of the first three functions, they facilitate the development of patriotism. The problem in a plural society is whether this patriotism is directed towards the union and not exclusively towards the constituent communities. There is concern that its emphasis on difference will entrench division, perhaps even lead to secession (Ottaway 1994: A12). Even short of separation, ethnic tensions may spill over into substantive issues, including international relations. A good example of this concerns Hungary’s abrogation of its commitments to Czechoslovakia with respect to a massive Danube hydroelectric project. Although there certainly are environmental and other issues about which reasonable persons can disagree, there is little question that Hungary is, at least in part, motivated by concerns for the impact of the project on ethnic Magyars in Slovakia. Hungary has taken ‘retaliatory’ action in the Council of Europe and all of the parties have submitted the dam conflict to the International Court of Justice (Bekker and Oxman 1998: 273). The performance, culture, and style of the legislature are critical to determining whether the resulting development is integrating or divisive. Indeed, people of good will on all sides are often torn between approaches that emphasize general, liberal development, and ethnic autonomy, if not separatism. It should also be remembered that no creation of representative entities is likely to be neutral and that by enhancing the position of a national minority, one may diminish, or at least complicate the representation of sub-minorities. There has been considerable partisan activity by ethnic minorities. Thus, for example, the largest opposition party in the Romanian Assembly is an ethnicallyidentified Hungarian party. Hungarians are also prominent in minority parties in Slovakia, while several Gypsy parties have developed. Such activity often depends upon the demographic position of the minority and the requirements and opportunities for organization and participation afforded by the election laws. Indeed, Hungary, Slovenia, and Romania set aside parliamentary seats for minority groups. Often, however, constitutional and legal guarantees are left without specific implementation (Benoit 2006: 249). This can be indicative of deeply rooted animosities among the groups, most of which tensions are centuries old. Ultimately, such an issue is frequently expressed in ‘technical’, structural arrangements for legislative and/or administrative districts – what is, in American


169

parlance, ‘gerrymandering’: the purposeful drawing of the boundaries of a sub-unit in order to maximize political advantage for a favored group and disadvantage, if not exclusion, for a disfavored group. Slovakia and Hungary, for example, disagreed about whether Slovak provincial lines should be drawn to spread out or concentrate the Hungarian minority (Ottaway 1994: A12). Such concerns are a special subset of a more general issue of regional or local autonomy. While only the former Czechoslovak Republic was formally federal,6 regional and local units are afforded special recognition, either explicitly through the organization of national representation or through devolution of formal or practical decision making authority to sub-national units (Bielasiak 1994: 231). Indeed, municipal officials and organizations have been active in developing and projecting distinctive local and regional interests within and across national boundaries. Political and representative activities at the local and regional level not only yield important policy and power benefits, but also provide a critical formative opportunity. Electoral Thresholds Proportionality is generally regarded as a ‘good thing’ – in moderation. Few electoral systems go for broke on the proportionality dimension; most have, in practice, some way of limiting it. (Gallagher and Mitchell 2006: 13)

Thresholds – usually 4-5 per cent – are one means to limit proportionality by excluding smaller parties that do not receive at least a minimum vote percentage from receiving seats in the parliament (Gallagher and Mitchell 2006: 13). Thresholds, like most electoral structures, have both positive and negative consequences. While they do tend to inhibit excessive fragmentation, they may prevent smaller parties and their adherents from getting their ‘fair share’ of the voices and votes in the parliament. In several countries in the early 1990s, about 25 per cent of the people voted for parties that failed to reach the minimum threshold to win parliamentary seats (Malova and Haughton 2002: 113; Ludwikowski 1998: 27-8; Gallagher and Mitchell 2006: 11). This shortfall is particularly troubling for legitimacy because during the transition period in Central and Eastern Europe, the parliament is the crucible of fundamental change (Schwartz 1997: 76). Electoral Tiers Having more than one level means that we might be able to have our cake and eat it. (Gallagher and Mitchell 2006: 12)

To have multiple tiers – separate levels of electoral competition and award of seats – is intended to acknowledge small-to-medium sized, geographically dispersed parties 6 The short-lived Czechoslovak Federal Republic dissolved on 1 January 1993 into its principal constituent units: the Czech and Slovak Republics (‘Dissolution of Czechoslovakia,’ Wikipedia). It was a brief, unhappy and unsuccessful attempt to apply consociational principles (Lijphart 1977: 113).

170


in order to produce a national legislature that balances proportionality with local representation (Gallagher and Mitchell 2006: 12). Sometimes, however, the tiers are more parallel and are neutral as compensation and proportionality (Gallagher and Mitchell 2006: 13). In the Hungarian case, the system actually reinforces the strengths of the largest parties by reallocating vote remainders (Benoit 2006: 235; Gallagher 2006: 550). Judicial Involvement in Representation If I were to attempt to suggest the most striking single phenomenon that has emerged on the constitution-making scene in Central and Eastern Europe … I would nominate the emergence of the constitutional court. (Howard 1997: 58) Although, ... it is not realistic to expect the judiciary to settle or compromise on the major conflict issues of a divided society – a task which can be achieved only by political leaders – its ancillary role in conflict regulation is by no means negligible. A universally respected judicial system can be a valuable agent of depoliticization, dealing with issues in the quiet sobriety of the courtroom, far removed from the passions of politics. By their training, and by the ambience of their profession, judges tend to be independent, dispassionate and objective, and these are qualities which, along with skills in conflict resolution, can play a valuable part in knitting together a divided society. (Van Zyl Slabbert and Welsh 1979: 155-6)

It is helpful to note the experience of the United States judiciary, which played a critical representation reinforcing role in that country’s reapportionment ‘revolution’ (Bugaric 2001: 274). The simple elegance of the one person, one vote formula has been its blessing and its curse. By its precision and neutrality, the Court cut a path through the political thicket, touching the core of a fundamental liberal value – equality – while appearing to sustain the fundamental commitment of the judicial branch to being a-political. Unfortunately, this approach not only reduced the dominant perspective on districting to equality but also to equality’s narrowest conception – individual identity. Consideration of the rich history and complex texture of representation theory and practice became irrelevant and indeed illegitimate. Instead, a sterile model of representation emerged because it fit the math. The ‘pathology of democracy’ problem generated tremendous pressure on the Court to respond, in spite of concerns over involving the courts in politics. This same pressure has been building over the last decade and a half in the United States with regard to racial and political gerrymandering. The courts have taken an ambivalent attitude towards the matter, admitting the essential political nature of representational structures and processes, while refusing to consider most complex political features and perspectives. Few of the justices would even acknowledge the group nature of political participation and the inadequacy of mathematical standards to guarantee fair representation, at least in the absence of proportional representation. It is difficult for a liberal constitutional court to chart a course between the horns of the dilemma: the ideality of individual rights and the reality of political pluralism (Lennertz 2000: 163). More generally, the role of the law and the courts in such inherently political activities presents a central dilemma of liberalism and law. Moreover, some contend


171

that a strong role for courts is antithetical to republican dependence on the people (Holmes 1995: 76; Bugaric 2001: 253). Yet, there is a role for the courts – essentially a pedagogical one – which can be reconciled with the development of civic capacity and culture. The Constitution fosters a public dialogue in which citizens, motivated by civic virtue, transcend narrow private interests and takes their public responsibilities seriously. Judicial review should promote this dialogue by reminding us of values formulated during those occasional dramatic points in our history when public politics were all-consuming . (Seidman 1987: 1014)

However, other scholars cautioned that, while judicial activism which affirms societal consensus is appropriate, judicial activism with respect to deeply contentious issues should not extend beyond sustaining the prerequisites of dialogue (Bugaric 2001: 287). Although judicial review of constitutional issues is a strong trend in contemporary civil law countries, European constitutional courts are specialized tribunals apart from normal legal institutions (Bugaric 2001: 247). As in the United States with Marbury v. Madison, 1 Cranch 137 (1803) judicial review is based not on an assertion of judicial superiority over the legislature, but rather on a theory of ultra vires: law which exceeds the legislative [or administrative] power, as constitutionally prescribed, is no law and thus claims no rightful obligation to be enforced. Of course, restrained common and civil law courts will seek to minimize such a constitutional edict by interpreting the statute, when possible, in a way that reconciles the two provisions. Failing that, constitutionality can be raised ‘incidentally’ within the context of judicial or administrative proceedings or ‘directly’ by designated parties. There is a textual basis and legal cultural precedent for the broadly creative and assertive exercise of judicial review in the Eastern European states (Bugaric 2001: 260-1).7 The Hungarian Constitutional Court, for example, is generally accepted as the arbiter of the commands of the constitution and the values that underlie it, such as human dignity (Dupre 2003). Even judicial evaluation of – indeed, interference with – socio-economic legislation has been limited, temporary and directed toward diffusing societal discontent (Arato 2005: 24). Conclusions: Changes since Transition Eastern Europe’s constitutional courts are important veto players in the politics of transition. They have rendered many decisions that have shaped economic and political reforms in the region. However, when dealing with the most complex and polycentric issues of transition, like privatization or social security reform, they have turned out to be poor policy-makers. (Bugaric 2001: 286)

7 See also Bugaric (2001: 268-9) for a discussion of a Slovenian court ruling which disallowed on constitutional representation grounds the ‘excessive’ growth of the Slovenian city of Koper.

172

The State of European Integration Sporadically throughout the 1970s, then in earnest in the late 1980s and early 1990s, democracy bloomed the world over in what Huntington also aptly characterized as ‘democracy’s third wave.’ But while riding a wave, ... may be an exhilarating and intoxicating experience, it is just as likely to be a precarious and downright perilous enterprise, even for the accomplished. (Baaklini and Dawson 1994: 351)

The period of transition has been as complex, contingent, and dangerous as it has been exhilarating. There has been a collision of an irresistible force – the popular urge to break with the past – and an immovable object – a long history of subject, if not authoritarian, political culture (Crawford 1994: 251). Moreover, the nations of Central and Eastern Europe often lacked the vision to imagine the future and ‘constitute’ themselves for that future with the appropriate representational structures, processes, and culture (Wesolowski 1993). This conceptual, political ‘vacuum’ is both an opportunity and a danger. It is an opportunity because it affords citizens a chance to ‘constitute’ themselves. Although attitudes about form are mixed, all agree that a constitution, broadly conceived as a process rather than merely a document, is important as much for the spirit it could engender as for the product. As the role of the constitution is not merely one of logical consistency, one should not ignore the value of a constitutional model less as a description of present reality than as a constitutive, aspirational process. This does not mean that constitution-building can be an exercise in fantasy. Yet there must be a reconciling of the real and the ideal, the institution and the purpose, or fragmented representational conceptions will yield a ‘Lilliputian pluralism’ (Wesolowski 1993). Although one should not be overly optimistic about the capacity of constitutions and law to change people’s hearts and minds or even their behavior, law can be an instrument and symbol for development (Pitkin 1967: 239). The very openness of the situation, the years of pent-up frustration and demand, and the hope for the prompt and relatively painless achievement of democracy and prosperity, load the process of change with significant potential for difficulty. Finally, change has been severely and unsympathetically filtered through the self-interested lens of the parties and interests in power (Gallagher 2006: 564). Electoral reform in Hungary is possible through an act of parliament, although amendments to the electoral law require a two-thirds super-majority for passage. Since 1989, no significant change to the law has occurred, except for a decision in 1993 to raise the minimum electoral threshold from 4 to 5 per cent. All other modifications have been minor, aimed principally at improving the fairness and transparency of existing procedures such as candidate registration and ballot counting. ... Proposals to change the electoral system that have failed in the planning stages have included adding thirteen guaranteed seats for national and ethnic minorities ... (Benoit 2006: 249)

Yet these parties and interests operate within a political context which provides a framework for viewing – indeed deciding – what ‘is’ and what ‘should be’ (Malova and Haughton 2002: 101). After the burst of energy in the late 1980s and early 1990s, there has been a continuity that has provided stability but has also inhibited further development. The primary engine of and calculus for recent change has been


173

regional convergence, often prompted by accession to the European Union (Wood 2002: 16). Efforts to guide representational developments in these states generally must combine the best elements of the several theories. In all of this, one must be responsive to both realistic and idealistic claims.8 Moreover, one must realize that one is not ‘writing on a clean slate’. This task is made infinitely more difficult because of the context of conflict among the parties. That responsibility may be more fruitful if one can acknowledge and nurture through discourse the integrity of diverse and even contentious positions. Governing is never easy and democratic governing is especially complex in practice. Democracy is, if anything, as messy in practice as it is elegant in theory. (Baaklini and Dawson 1994: 352) The moral function of the legislator is to preserve the peace by constructing a justice against the joint recalcitrance of equally good citizens. (Smith 1938: 184)9

References Arato, A. (2005). ‘Constitutional Learning’. Theoria, 106, 1-37. Baaklini, A. and Dawson, C. (1994). ‘Building Legislative Institutions in Emerging and Newly Democratic Nations’. In Lawrence Longley (ed.), Working Papers on Comparative Legislative Studies. Research Committee of Legislative Specialists, Appleton, Wisconsin. Bekker, P. and B. Oxman (1998). ‘International Decision: Gabcikovo-Nagymaros Project.’ The American Journal International Law 92, 273-8. Benoit, K. (2006). ‘Hungary: Holding Back the Tiers’. In Michael Gallagher and Paul Mitchell (eds.), The Politics of Electoral Systems. New York: Oxford University Press. Bielasiak, J. (1994). ‘Institution Building in a Transformative System: Party Fragmentation in Poland’s Parliament,’ in Lawrence Longley (ed.), Working

8 ‘Those who value stable and ejectable government, and identifiability of alternatives, above all else, even at the expense of performance on several other criteria, will be attracted by a single-member constituency system. Those for whom a high degree of proportionality and disciplined parties are the transcendent virtues will favour a closed-list system in a nationwide constituency. Those prioritizing proportionality, a high degree of voter participation, and personal accountability of MPs will logically gravitate towards PR-STV or open-list PR. Mixed compensatory systems score well on nearly every criterion (Gallagher and Mitchell 2006: 575).’ 9 ‘The problem is that people do not see the burdens being shared equitably, and tend to blame the problem on their newly democratic governments. The negative evaluations of the new governments seen in surveys are due partly to the poor economic records of the postcommunist regimes, but even more so to the perception that the new governments are not as fair as Communist era governments were’ (Mason 2003: 48).

174


Papers on Comparative Legislative Studies. Research Committee of Legislative Specialists, Appleton, Wisconsin. Boix, C. (1999). ‘Setting the Rules of the Game: The Choice of Electoral Systems in Advanced Democracies.’ American Political Science Review 93: 3, 609-24. Bugaric, B. (2001). ‘Courts as Policy-Makers: Lessons from Transition’. Harvard International Law Journal 42, 247-88. Butler, J., R. Elphick and D. Welsh (eds.) (1987). Democratic Liberalism in South Africa. Middletown, Connecticut: Wesleyan University Press. Chan, K. (2001). ‘Idealism versus Realism in Institutional Choice: Explaining Electoral Reform in Poland’. West European Politics, 24: 3, 65. Crawford, B. (ed.) (1995). Markets, States, and Democracy: The Political Economy of Post-Communist Transformation. Boulder, Colorado: Westview Press. Crawford, K. (1994). ‘Problems of Institutionalization of Parliamentary Democracy: The Federal Assembly of the Czech and Slovak Federal Republic, 1990-1993’. In Lawrence Longley (ed.), Working Papers on Comparative Legislative Studies. Research Committee of Legislative Specialists, Appleton, Wisconsin. Degenaar, Johan (1987). ‘Nationalism, Liberalism, and Pluralism’. In Jeffrey Butler, Richard Elphick, and David Welsh (eds.), Democratic Liberalism in South Africa. Middletown, Connecticut: Wesleyan University Press. de Grazia, Alfred (1951). Public and Republic: Political Representation in America. New York: Alfred A. Knopf. Dupre, Catherine (2003). Importing the Law in Post-Communist Transitions: The Hungarian Constitutional Court and the Right to Human Dignity. Portland, Ore.: Hart Publishing. Frye, Timothy (1997). ‘A Politics of Institutional Choice: Post-communist Presidencies’. Comparative Political Studies, 30: 5, 523-53. Gallagher, M. (2006). ‘Conclusion’. In Michael Gallagher and Paul Mitchell (eds.), The Politics of Electoral Systems. New York: Oxford University Press, pp. 535-578. Gallagher, M. and Mitchell, P. (2006), ‘Introduction to Electoral Systems,’ in Michael Gallagher and Paul Mitchell (eds.), The Politics of Electoral Systems. New York: Oxford University Press, pp. 2-25. Gallagher, M. and Mitchell, P. (2006). The Politics of Electoral Systems. New York: Oxford University Press. Ortega y Gasset, Jose (1932). The Revolt of the Masses. New York: W.W. Norton & Company. Guinier, Lani (1994). The Tyranny of the Majority: Fundamental Fairness in Representative Democracy. New York: Free Press. Holmes, Stephen (1993). ‘A Forum on Presidential Powers’. East European Constitutional Review, 2, 36. Holmes, S. (1995). ‘Conceptions of Democracy in the Draft Constitutions of Post-Communist Countries,’ in Beverly Crawford (ed.), Markets, States, and Democracy: The Political Economy of Post-Communist Transformation. Boulder, Colorado: Westview Press. Howard, D. (1997). ‘Symposium: Constitutional ‘Refolution’ in the Ex-Communist World: The Rule of Law: September 26, 1996’. The American University Journal of International Law & Policy 12, 45-144.


175

Ishiyama, J. (1995). ‘Electoral Systems Experimentation in the New Eastern Europe: The Single Transferable Vote and the Additional Member System in Estonia and Hungary’. East European Quarterly, 29: 4, 487-508. Lennertz, J. (2000). ‘Back in Their Proper Place: Racial Gerrymandering in Georgia’. Political Geography 19, 163-188. Lennertz, J. (1984). ‘The Politics of Speech, The Politics of Noise: Obstructions to a Community of Inquiry in Pluralist Society’.’ Liberal Education, 70: 2,121-32. Lijphart, A. (1977). ‘Majority Rule versus Democracy in Deeply Divided Societies’. Politikon 4, 113. Longley, L. (ed.) (1994). Working Papers on Comparative Legislative Studies. Research Committee of Legislative Specialists, Appleton, Wisconsin. Ludwikowski, R. (1998). ‘’Mixed’ Constitutions – Product of an East-Central European Constitutional Melting Pot’. Boston University International Law Journal, 16, 1-70. Malova, D. and T. Haughton (2002). ‘Making Institutions in Central and Eastern Europe, and the Impact of Europe’. West European Politics, 25: 2,101-25. Marbury vs. Madison, 1 Cranch 137 (1803). Mason, D. (2003). ‘Fairness Matters: Equity and the Transition to Democracy’. World Policy Journal, 20: 4, 48-57. Mensch, E and A. Freeman (1989). ‘A Republican Agenda for Hobbesian America?’. Florida Law Review 41, 581. Miller, R. (2003). ‘Self-Determination in International Law and the Demise of Democracy?’. Columbia Journal of Transnational Law 41, 601-48. Ottaway, D. (January 10, 1994). ‘President Michal Kovac,’ The Washington Post, A12. Patzelt, W. (1994). ‘A Framework for Comparative Parliamentary Research in Central and Eastern Europe,’ in Lawrence Longley (ed.), Working Papers on Comparative Legislative Studies. Research Committee of Legislative Specialists, Appleton, Wisconsin. Pitkin, H. (1967). The Concept of Representation. Berkeley: University of California Press. Radnitz, S. (2004). ‘The Tyranny of Small Differences: The Relationship between Ethnic Diversity and Democracy in the Former Socialist Bloc’. Demokratizatsiya, 12: 4, 575-607. Samuels, D. and R. Snyder (2001). ‘The Value of a Vote: Malapportionment in Comparative Perspective’. British Journal of Political Science, 31: 4, 651. Schwartz, H. (1997). ‘Symposium: Constitutional ‘Refolution’ in the Ex-Communist World: The Rule of Law: September 26, 1996’. The American University Journal of International Law & Policy 12, 45-144. Seidman, L. (1987). ‘Public Principle and Private Choice: The Uneasy Case for a Boundary Theory of Constitutional Law’. Yale Law Journal 96, 1006-58. Sidlo, J. (5 April 1994), ‘A Fresh Wind Across Europe: The Czech Government Rejects the Collective Rights of Minorities’. FBIS-EEU-94-065, Source, Prague, Respektm 20 February 1994, p. 4. Smith, T. (1938). ‘Two Functions of the American State Legislator,’ Annals of the American Academy, CXCV, 183.

176


Stepan, A. and C. Skach (1993). ‘Constitutional Frameworks and Democratic Consolidation: Parliamentarianism versus Presidentialism’. World Politics, 46: 1, 1-23. Van Zyl, F. Slabbertand D. Welsh (1979). South Africa’s Options: Strategies for Sharing Power. New York: St. Martin’s Press. Wesolowski, W. (21 February 1993). The Warsaw Voice. Wood, B. (November, 2002). ‘Central European Politics Like Those of Western Europe, but Different’. Europe, 16-8.

Chapter 11

Democratization and the Diffusion of Human Rights Norms in Central and Eastern Europe: The Case of Domestic Violence Policies Katalin Fábián

Norms are standards of behavior defined in terms of rights and obligations. In the process of tensions and contradictions in international life, norms emerge as broadly accepted beliefs that may or may not be codified. They often amount to an ethical (normative) claim about what actors should or should not do. As a result of their ethical and thus, politically contested nature, norms are frequently contested in the public sphere: in the media, among political parties and NGOs, and also within and among governments. Some of these norms eventually become accepted, and under special conditions, internationalized, and with increasing frequency, norms have been replacing armies and economic might as a leverage of global politics. Intrinsically connecting women’s rights to human rights and to participation in a democracy, the international women’s movement became newly energized in the late 1980s and early 1990s. The otherwise often sharply conflicting groups found an explicitly common ground in fighting for women’s fundamental right to physical safety. The agreement between the women’s movements from the global North and South regarding a focus on violence against women and domestic violence acknowledges that these issues are complex and their severity may vary according to political and cultural circumstances. However, they consider violence against women and domestic violence as having relevance everywhere (Kardam 2004: 90). Campaigns against domestic violence and the roots of the shelter movement originated in the UK where in 1971, the controversial Erin Pizzey established what is considered to be the first battered women’s shelter.1 They were established in the USA later that decade and were soon transplanted back to Western Europe (Dobash and Dobash 1992; Tierney 1982). Although the communist past made contemporary Central and Eastern Europe acutely sensitive to human rights violations, it has taken well over a decade after the regime transformations in 1989 to develop activist 1 Erin Pizzey also stressed that women could also be perpetrators of domestic violence. Her book, Prone to Violence (1982) was hotly debated because of its explicitly non-genderspecific orientation. Pizzey argues that the British feminists substituted the anti-capitalist Marxist critique with a similarly general attack on all men (Pizzey 2005).

178


networks capable of pressuring their respective governments to address the longneglected issue of domestic violence. While governments in Central and Eastern Europe have responded to pressures from both the domestic sphere and international organizations of various kinds, their responses can be characterized as lukewarm or, in the eyes of feminist observers, hostile to establishing specific domestic violence laws and daily practices to protect its victims.2 The international women’s movement has established a complex (and still contentious) definition of domestic violence as a subcategory of violence against women who analytically separates it from other forms of violence, such as child or elder abuse (see, for example: Buzawa and Buzawa 2002; Marcus 1994; Weldon 2002). In the eyes of feminist researchers and activists it is evident that domestic violence, battering, and intimate partner violence occur in all societies and cover a wide variety of behaviors. Its most common form occurs between men and women, with women forming the overwhelming majority of victims (Open Society Institute 2006; McCue 1995).3 The feminist movement also maintains that violence in the home is not an individual or cultural problem, but is a violation of human rights for which individual states and the broader community of nations, such as the European Union (EU), should provide protection against. If a state fails in this respect, it should be held responsible (Thomas and Beasley 1993). Over the last decade, the skepticism toward and denial of domestic violence has been at least partially transformed in Central and Eastern Europe. As relative newcomers to the international human rights discourse and newly democratic countries, Central and Eastern European governments and public felt that they had to acknowledge domestic violence as a problem and consequently provide services for its victims. These Central and Eastern European governments acted partially in response to external pressure and partially as a way of appeasing their domestic nongovernmental organizations (NGOs) that raised such concerns. However, despite the apparent progress, recognizing domestic violence as a pandemic and a human rights violation is still a low priority in the eyes of many, and Central and Eastern European policy responses failed to produce the comprehensive change in approach that activists were calling for. The debate raging over domestic violence in Central and Eastern Europe is superficially about which definitions and corresponding policies governments and NGOs should use, but in effect, such debates represent very different values and interests. Profound value differences about individual rights, social responsibilities, the universality of human rights, participation in a democracy and in particular, gender roles affect these definitional and policy debates.

2 The term Central and Eastern Europe as consisting of Poland, the Czech Republic, Slovakia, Hungary, and Slovenia is based on recent political and economic processes, such as these previously communist countries accession to the EU in 2004. 3 In France, over 95 percent of victims of assault are women, half of who report abused by intimate partners (UN Commission on Human Rights 1996: para 61). Similarly, the Austrian Women’s Shelter Network stated that 96 percent of victims were female (WAVE 2002). In Slovenia, the percentage of woman victims of violence increased from 44.6 percent in 1999 to 81.4 percent in 2000 (Veseliĉ 2006).

Democratization and the Diffusion of Human Rights Norms

179

This essay begins by setting out a framework of the main actors who influenced domestic violence legislation in post-communist Central and Eastern Europe. The effects of human rights norms and democratization on Central and Eastern Europe’s domestic violence policies are the themes of the second part. Next, naming domestic violence and the evolution of related policies is identified as the major result emerging from efforts of activists, international organizations, and state governments. Then, domestic violence is traced in Central and Eastern European countries. The role of the EU on Central and Eastern Europe’s domestic violence policies is the theme of the fifth part. The conclusion discusses the influences of norms and the EU on defining and attending to domestic violence in Central and Eastern Europe. The Main Influences on Central and Eastern European Domestic Violence Policies The main influences on Central and Eastern European domestic violence policies can be roughly divided into 1) tangible forms of pressure exerted through personal, financial, and organizational means, and 2) intangibles, such as norms that the concrete actors develop, debate, and, under favorable conditions, transmit to other actors and locales. The tangible and intangible influences are in a dialectical relationship with one another. Concrete actors bring the norms to life, but the intangible value considerations impel actors in the first place to raise their voice, find one another, and work together. Most notably, two main forms of influence have contributed to the development of a set of norms concerning domestic violence in Central and Eastern Europe: 1) Tangible/Concrete Actors: A) International Organizations (IOs) i) Inter-Governmental Organizations (IGOs), such as the EU, the UN, and the Council of Europe, ii) Non-Governmental Organizations (NGOs), both formal and informal groups of the feminist movement such as the East-West Women’s Network, human rights organizations such as Amnesty International, and international funding agencies such as the Soros Foundation-financed Open Society Institute (OSI), B) Individual state governments, most evidently the USA, Sweden, the Netherlands, and Austria, C) Transnational Corporations (TNCs) such as Phillip Morris and Johnson and Johnson, D) Professional organizations, such as the American Bar Association. 2) Intangibles: Broad international norms, such as democratization and the corresponding respect for human rights, women’s rights, and the broad solidarity-based norms of the European social democratic model that could be widened to potentially include concerns related to domestic violence.

180


Transnational norms and international actors exerted pressure on the Central and Eastern European region to deal with domestic violence. Governmental and nongovernmental forces, and domestic and international actors have become active in discussing and developing policies concerning violence against women in general and domestic violence in particular. International Governmental Organizations (IGOs), such as the European Union (EU) especially through the Daphne Program, along with International Non-Governmental Organizations (INGOs), such as Women Against Violence Europe (WAVE), tried to influence governments and publics and have become active promoters of human rights principles worldwide (Keck and Sikkink 1997; Risse and Sikkink 1999; Tsutsui and Wotipka 2004). The interactions of various international activists ignited a debate in postcommunist Central and Eastern Europe regarding the definition and appropriate policy on domestic violence. Underpinning this regional debate is a European regional and a global contestation over norms that are most often framed within an international human rights framework. The universal nature of human rights is central to debates on domestic violence. On the one hand, with the spread of globalization, the normative expectations of universal human rights are increasingly the measure that democratic governments are expected to follow (Merry 2006). On the other hand, debate about the universality of human rights still rages, especially in light of globalization not affecting every part of the world the same way. With the internationally uneven effects of both human rights and globalization, there has been no global agreement yet on how to define domestic violence and the extent to which relevant government policies should be centralized, become gender-specific, favor the judicial/criminalizing route, or take a preventive/educational approach, etc. There is also no proven method of eliminating domestic violence and there are no countries in the world where domestic violence is no longer a problem (see Alvarez 2005; Kaplan 2001; WAVE 2002). Diversity or Universality? The Production of Norms in an International Context While there appears to be no country in the world where domestic violence is not a problem, governmental and public responses vary widely from denial or failure to offer widespread, diverse types of services to victims and perpetrators. Even with feminist movements organizing globally, only 89 countries out of 191 have specific domestic violence laws. Western Europe and North America have very diverse practices regarding domestic violence and their feminist movements have greatly affected other regions’ definitions and policies. Despite the significant international diversity regarding the definition and the policies regarding domestic violence, a set of guidelines has emerged which, after decades of practice, can be considered as an emerging set of international norms. The set of international norms related to domestic violence includes several aspects, with considerable flexibility built in for differences in legal systems and customs such as, a) specific domestic violence laws, b) separate and quickly available domestic violence courts, c) distancing ordinances against perpetrators, d) reliable funding for


181

independent women’s shelters and hotlines, and e) training of judges, police, social workers, and healthcare providers to recognize and treat domestic violence victims without further traumatizing them. Some of the emerging rules of state behavior regarding victims of domestic violence have been codified in international treaties, such as UN’s CEDAW and the 1995 Beijing Platform for Action, national law (such as in Austria, Sweden, and the USA), and they are listed in best practices handbooks (e.g., WAVE), training manuals for example, the EU’s Daphne-financed publications (United Nations 2006). In addition, scholars also refer to these aspects of policies when assessing the reach and impact of national policies on violence against women (Bunch 1995; Clarke 1997; Elman 1996a; Weldon 2002; Buzawa and Buzawa 2002; Deanham and Gillespie 1999; Dobash and Dobash 1992; Hanmer and Itztin 2000). These and other internationally accepted standards and norms of behavior are expected to shape and legitimize states as social actors in the international arena (Meyer, Boli, Thomas and Ramirez 1997). Central and Eastern Europe: The Effects of Globalization and European Integration on Domestic Violence Policies While considerable controversy and debate characterize many aspects of how to deal with domestic violence, the issue itself has unarguably been in the limelight internationally since the 1980s. Encouraged by international activism and increased attention to women’s right to physical safety as a basic human right, Central and Eastern European NGOs incorporated various elements of global approaches and European recommendations into their arguments to convince the public, their governments, and the international community of the value of their claims. After a decade and a half of activism, many of the seemingly substantive legal and attitudinal changes regarding domestic violence that these Central and Eastern European NGOs and the global feminist forces introduced, have not yet produced a significant change in practice in the region. Despite considerable differences in size, customs, and current political orientation among Central and Eastern European countries, why did their governments respond to international and domestic pressure in a similarly resistant, half-hearted manner? This research reveals that the locally specific gender socialization during the communist era still principally determines Central and Eastern European official responses about something literally and figuratively as ‘close to home’ as the issues of domestic violence. Despite Central and Eastern Europe’s rapid opening toward the international arena, feminist interpretations of policy encountered serious opposition after the 1989 transitions. For the purpose of this research project, the author interviewed Polish, Czech, Slovak, Hungarian, and Slovene government officials and representatives of various NGOs dealing with victims of domestic violence in the summer of 2003 and the fall of 2004. I attended international workshops in 2004 organized by WAVE in Vienna, Austria, for NGOs across Europe to discuss common problems and launch common projects. In 2003–04 and in 2006, I interviewed NGO activists, government officials,

182


and politicians about their actions to deal with domestic violence and their reactions to one another and also to the other’s actions and policies. I asked them to evaluate the effect of international actors and their experiences with the UN, the EU, various INGOs, and foreign governments. The first change in this region was the naming of domestic violence. Naming Domestic Violence in Central and Eastern Europe How to name a previously anonymous issue? Naming powerfully affects perception and in naming domestic violence, the enmeshed conditions of ‘how we do things’ and new norms collide. Many global norms and influences affected the processes of finding a name for ‘domestic violence’ in Central and Eastern Europe, but the result, at least for the time being, has been a middle-of-the-road solution with which no one is really satisfied. The persistent debate – over naming the problem both in Central and Eastern Europe and internationally – highlights that diverse notions of gender equality, alternative interpretations of personal, and state responsibility collide in this symbolic, but behaviorally and cognitively important instance when we name something. Each Central and Eastern European language labeled the problem differently. Nearly every Western term has been tried in their local translations, from ‘wife beating’ and ‘wife abuse,’ to ‘spousal violence’ and ‘partner abuse.’ Verbal battles raged in each country about the implied meaning of violence among intimate partners. Both the relationship between the partners and the location where the violence is committed are contentious issues in the naming process. For now, terms such as ‘domestic violence’ (domácího násilí in Czech, domáce násilie in Slovak) and ‘violence in the family’ (családon belüli erőszak in Hungarian) have emerged victorious (Vanya 2001). The course of these debates is more than a simple chronology of events. Analyzing the reasons why raising the issue and naming domestic violence have caused heated debates also shines some light on the underlying causes of lawmakers’ objections and popular resistances to altering the previous arrangement of power and authority. How did domestic violence begin to be recognized? With the regime change, social movement activists, including feminists, traveled to and from Central and Eastern Europe. In the late 1980s and early 1990s, women activists in Central and Eastern Europe learned of the then-new agreement among the global Western and Southern feminist movements to focus on the problems related to violence against women and the emerging ‘good practices’ to provide shelter to the victims and deal with the perpetrators. The construct of violence among intimate partners struck a cord with activists in the region – partially because it seemed to have fit the reality they knew and partially because these were themes the West was willing to support ideologically and financially. With enthusiasm, but also with some skepticism toward the West and their own governments, NGOs in Central and Eastern Europe started to apply this concept to their local environments. Their first challenge was to name the concept. First, identifying the hurt party became problematic because every term borrowed from the West emphasizes a different actor considered to be the vulnerable individual.


183

If the general term becomes ‘violence against women’ (which has been the usage in feminist-inspired international discourse), it implies that only women can be the victims. This terminology was quite unpalatable to Central and Eastern European decision-makers and they rejected this feminist interpretation, claiming that many other groups, including men, are equally vulnerable. Consequently, many social movement activists decided to shift the language to gender-neutral territory in order to effectively engage politicians and the general public. Most politicians and scholars in the Central and Eastern European region habitually note that if a policy framework accepts the term as violence against women, then abuse against the elderly, children, and men would be omitted from the notion of violence in the home (Interviews with Branko Grim, SDS [Social Democratic Party], Ljubljana, Slovenia, 4 October 2004 and with Dr. Ágnes Vadai, MSZP [Hungarian Socialist Party], Budapest, Hungary, 24 June 2003).4 Feminists argue that much of the violence against children, elderly, and even young men springs from women’s oppression, because men often try to shape women’s behavior by hurting other family members. The debate continues over whether anyone, regardless of sex, age, or marital status, is equally likely to become a victim of violence in the family. Also, there are needs to emphasize that gender-based violence is a manifestation of the prevailing patriarchic order and separate it from other types of crimes. Second, specifying where the violence takes place turned out to be similarly challenging because both the ‘home’ and the ‘family’ are conspicuously vague. The images of ‘violence in the family’ and ‘violence in the home’ offended and politically distanced many social conservatives who wished to envision the family and their domicile as a harmonious entity that offers a safe haven to its members and inhabitants. Third, should only violence in marital relations be subject to public scrutiny as the term ‘wife abuse’ suggests? With co-habitation and divorce rates in Central and Eastern Europe reaching record highs, the traditional approach of limiting domestic violence to married partners living at the same location was becoming untenable. However, the alternative to ‘wife abuse,’ which would have been ‘partner violence,’ would also infer homosexual relationships and legitimating homosexual partnerships even in such a backhanded way would be an unwelcome task for most politicians in Central and Eastern Europe (Hammarberg 2006; Kitlinski and Leszkowicz 2005). The end result (to date) of the terminological quandary in Central and Eastern Europe was ‘domestic violence.’ This way, violence was extricated from male power and neutralized into a more socially acceptable expression. However, this compromise in terminology demonstrated the lasting influence of previous cultural arrangements, especially gender relations and the associated imbalance of power between the sexes. Despite the profound social changes affecting gender roles during communism and the many political transformations since 1989, this aspect of power imbalance between men and women had until now generally escaped the scrutiny of the state and the public.

4 Dr. Ágnes Vadai was one of the co-sponsors of the Parliamentary resolution to establish a domestic violence law.

184


Considering domestic violence as a crime challenges the legitimacy of established power relations, both within intimate relationships and also in the context of the state and its law enforcement. In recognizing domestic violence as a crime and by calling for collective resistance to unjust authority, basic social patterns of behavior, such as traditional gender roles, perception of appropriate behavior, individuals’ rights, and the state’s responsibility are fundamentally questioned. In the post-communist European societies where social transformation has been especially rapid, the last vestiges of what feels like stability in intimate relations may be especially difficult to challenge.5 Even this most toned-down and least confrontational term of ‘domestic violence’ poses many problems in Central and Eastern Europe, as some anti-feminist scholars and policy-makers are eager to point out. Fundamental features of democratic procedures such as equality before the law, the usual methods of evidence gathering at a crime scene, and the ideal of balancing gender equality and difference are questioned in the case of violence in the home. Even if the effects of beating can be clearly demonstrated, physical violence is most frequently the result of often long-standing emotional and psychological maltreatment that is much harder to prove (Daniel and Banks 2003: 154-64). The muddled, problematic, and globally influenced nature of naming domestic violence forecast the similarly internationally interconnected, problematic, and mediocre convergence of domestic violence policies. Changes in Central and Eastern Europe’s Domestic Violence Policies Various global and in particular, European forces assisted the feminist NGOs’ drive to introduce domestic violence as a new term into Central and Eastern Europe in the wake of the 1989 regime transformations. The ideas and policies regarding domestic violence, developed most extensively in the Western European and North American contexts, traveled rapidly to post-communist Central and Eastern Europe. Traditionally, violence against women had been accepted, occasionally even glorified, and dismissed as a private affair in Central and Eastern Europe. The impact of ideas and activists promulgating feminism, democracy, and respect for human rights has since started to break down this status quo. International norms related to human rights and a feminist interpretation of domestic violence policy imported from the West profoundly stirred up Central and Eastern Europe’s general acquiescence in this regard and a noticeable transformation has slowly and very controversially started to change attitudes and policies on domestic violence. While there are relatively few empirical studies on the prevalence of domestic violence in Central and Eastern Europe, a preponderance of evidence from the ledger 5 The idealization of the home as the one reliably safe place in life supposedly created more of an alliance between men and women as they faced the state as a tyrant intruder during communism. This resistance was coined the ‘politics of anti-politics’ (Konrád 1984). The deepest moral shocks about the depth of the state’s infiltration emerged in the previous DDR and Romania where secret service documents showed that family members also (were forced to) spy against one another (Childs and Popplewell 1996; Deletant 1995).


185

of calls of domestic violence NGOs to scholarly data, support the pandemic label. From the number of substantive (non-crank) calls received, hotlines and feminist NGOs in the region claim that between every fifth to every third women becomes a victim of violence in her family or in the hands of her partner (Veseliĉ 2006). Olga Tóth found that over one-third of Hungarians were raised in a threatening environment and approximately 20 percent witnessed their father beat their mother at least on one occasion (Tóth 1999 and 2002). Similarly, Serbanescu and Goodwin note 29 percent in Romania for reported lifetime experience of spousal physical abuse (2005). Nowakowska and Jablonska cite 1993 and 1996 polls that indicate that one in six Polish women experience violence of their male partner (2000: 14753). Due to the influence of international norms and the monitoring and lobbying activities of international and local NGOs and IGOs, people became more aware of domestic violence and policies were developed to address this problem in Central and Eastern Europe. Most important, domestic violence moved into public discourse as the general public, governments, and various organizations defined and discussed its meaning (see Table 11.1). After the fall of the communist system, the broad human rights framework and policy recommendations concerning domestic violence, most notably the Austrian framework, traveled to Central and Eastern Europe. In public policy and organizational behavior literature, there are plenty of similar examples of organizations routinely coping models that are deemed legitimate in the environment where they function (Meyer and Scott 1992). The Austrian framework was particularly attractive to Central and Eastern European feminist activists for at least three related reasons. First, the Austrian model has already provided for Italy and Germany a model of integrated, multi-agency framework of intervention and blueprint for setting up domestic violence shelters, all based on the Duluth (Minnesota, USA) model (WAVE 2000; Information Centre Against Violence 2000). Second, Central and Eastern European activists were invited to join as partners with the WAVE (Women Against Violence Europe) Network, headquartered in Vienna, Austria. As part of WAVE’s network, Central and Eastern European NGOs could attend Europe-wide information sessions, training, and learn about what WAVE considered to be good practices for the prevention of domestic violence (Interviews, WAVE training session fall 2004). Third, activists from the Austrian Women’s Shelter Network and Austrian Government and police officers were willing to travel to provide testimony and policy support when Central and Eastern European NGOs requested their assistance in public events, training of jurors and police, and lobbying governments (Interviews with ROSA, Prague, the Czech Republic, and Dr. Krisztina Morvai, Budapest, Hungary, summer 2003). Central and Eastern Europe, however, has not yet managed to incorporate many of the elements identified as part of this emerging set of international norms. Even when a strong law that criminalized domestic violence was passed, as in Slovakia, its implementation was inconsistent or non-existent. In the cases of Hungary and Poland, the very limited laws were watered-down versions of the standards recommended by international organizations. Facing resistance from prosecutors, politicians, and the general public and not getting a strong backing from powerful international organizations, such as the EU,

Table 11.1

Recent Areas of Change Concerning Domestic Violence Issues. Government Actions by Date and Country

Implementation of Notable Bills & Laws – Prevention of VAW1

Implementation of Notable Bill & Laws – Marriage2 (Marital Rape)

Czech Rep.

Hungary

Poland

Slovakia

Slovenia

2003 – Criminal Code Amended to recognize VAW as distinct crime

2003 – Parliamentary strategy for dealing with VAW

1997 – Criminal Legislation includes protections from rape, physical harm; 2003 – Gov’t adopts National Plan for Advancement of Women, pledging to introduce legislation to protect women victims of violence 1998 – Polish Penal Code considers marital rape as a form of statutory rape

2003 – VAW laws strengthened, expanding definition and increasing penalties

1992-1993 – Proposal to amend criminal legislation and Parliamentary debate leads to adoption of some protection measures

(4) By 2002, had an 1997 – Marital Rape improved framework defined as crime and an amended and approved legislation to promote equality through the Convention on the Elimination of all forms of Discrimination Against Women. 2006 – Labor Code and Employment Act are ‘expanded’ by country’s ban on gender discrimination

2002 – Ministry of Justice revises criminal legislation 2002 – Slovak Penal Code changes definition of closely related persons to include exwives

(6) 2003 – EOO introduces Implementation of the Principle of Equal Treatment Act (IPETA) 2003 – Employment Relations Act is clearly anti-discriminatory

Gov’t-Sponsored Awareness Campaigns3

2003 – Commissioner for Human Rights and Ministry of Labor and Social Affairs launches campaign aimed at educating teenagers on VAW, using TV, radio, and even a video game

2002 – Ministry for Children, Youth, and Sports announces intentions for education campaign on VAW, coordinating with other ministries and NGOs

2004 – Gov’t works with NGOs on ‘16 Days of Activism’ Campaign ; 2005 – Gov’t Plenipotentiary for Equal Status of Men and Women launches ‘To Overcome Violence!’ using TV, radio, leaflets, and billboard to remind Poles that VAW is a crime

(12) 2001 – Campaign Fifth Women, which is a gender violence awareness-raising initiative is launched. (7) 2003 – Several NGO’s working with human rights and women’s issues get together to raise awareness about domestic violence following a family tragedy.

1996 – Media Campaign by Women’s Policy Office against VAW targeted at secondary school students ; 1999 – Media Campaign by same Office continues to focus on VAW to raise awareness and pressure on gov’t to enact various international recommendations

Notes: Sources for each country may be found, in their respective orders: 1

Czech Rep – http: //www.state.gov/g/drl/rls/hrrpt/2003/27833.htm; Hungary – http: //www.stopvaw.org/Legislative_Trends_and_New_Developments10.html ; Poland – http: //www.stopvaw.org/Poland2.html; Slovakia – http: //www.state.gov/g/drl/rls/hrrpt/2003/27863.htm ; Slovenia – http: //www.npwj.org/?q=node/157 2 Sources for each country may be found, in their respective orders: Hungary – http: //www.ce-review.org/01/16/csardas16.html; Poland – http: //www.feministki.org. pl/pl/raport.html; Slovakia – http: //www.stopvaw.org/Slovakia.html 3 Czech Rep. – http: //www.radio.cz/en/article/46548; Hungary – http: //www.wave-network.org/cmsimages/doku/fempower_6_eng.pdf Poland – http: //www.oska.org. pl/english/articles.php?id=16; http: //www.stopvaw.org/29Jul20054.html; Slovenia – http: //www.uem-rs.si/eng/cedaw2/4.html; http: //www.uem-rs.si/eng/violence/schedule.html

188


NGOs’ opinion in the Czech Republic and Slovenia was that they could be most successful if they did not strive for anything more than amendments to the criminal code. They instead worked with personal networks to change the attitudes of social workers and the police (Interviews with SOS Hotline and The Association Against Violent Communication, Ljubljana, Slovenia 2004 and Gender Studies Center, Prague Czech Republic 2003). The next segment discusses the effects of the EU and explains why the EU has had a limited effect on its member-states regarding domestic violence policies. The Effects of the EU on Central and Eastern Europe’s Domestic Violence Policies The EU has plenty of limitations to engage in domestic policy issues in Central and Eastern Europe, even if these policies may relate directly to its fundamental call for democracy and the respect for human rights, such as the case with domestic violence. For Brussels, the most important reason to integrate Central and Eastern Europe in its fold has been the immediate economic and security aspects. However, by offering the prospect of membership, the EU has gained considerably more leverage to influence even in social policy issues in Central and Eastern Europe than if it had remained just the giant next door (Vachudova 2005). There are historical and institutional reasons why the EU has influenced domestic violence policies only in a symbolic manner (Rossilli 2000; Krizsán and Zentai 2004; Verloo et al. 2004). Historically, progress in EU integration has been slow in areas beyond the single market, but the EU’s view for years was that it is better to progress slowly than to isolate any member-state. However, the 29 May 2005 rejection of French and Dutch voters of the proposed EU Constitution shook the barely built foundations of a united Europe and raised the question of how much further than a common market the EU could become. Therefore, the EU has not initiated the transfer of competency to its supranational institutions to gain complete purview over domestic violence policies, even if these issues directly connect to human rights norms and states’ obligations to protect their citizens. Institutionally, the EU has strict limits on its capacity to intervene where its supranational jurisdiction does not yet reach, such as social policy. The EU’s principle of subsidiarity also highlights democratic credentials, such as locally elected representatives’ accountability because they are deemed more appropriate and closest to deal with specific problems.6 While the subsidiarity principle is meant to halt the EU’s democratic deficit, it also created a major obstacle to harmonize

6 The principle of subsidiarity means that what the lesser entity can do adequately should not be done by the greater entity unless it can do it better. Taken over into EU policies, it is used as an instrument for determining when the Union is to act in areas not coming under its exclusive competence. The subsidiarity principle was first introduced in the 1992 Treaty of Maastricht as a general principle applicable to all areas of non-exclusive competence. European Union’s website, Outcome of European Convention, see also at: http: //www.europa. eu/scadplus/european_convention/subsidiarity_en.htm (accessed on 16 October 2006).


189

policies that have implications for human rights and other basic licenses for the exercise of democracy.7 At the same time, the EU and its institutions have not been indifferent to gender violence. EU applicant countries have to satisfy the conditions of the Copenhagen criteria which includes the adoption of the acquis communautaire, i.e., the entire accumulated body of EU law, including treaties, regulations, directives, and judgments of European institutions. In addition to the legally binding and enforceable ‘hard law’ of the acquis, the European Commission argued that nonbinding resolutions and recommendations should also be part of conditionality (Grabbe 2002: 253). Most social policy and human rights-related themes are part of the non-binding resolutions and recommendations that the EU passed. The EU did not deal directly with social matters until the 1997 Treaty of Amsterdam. Although it has been vocal about calling for combating gender violence and it has undertaken a number of mostly symbolic initiatives, none of its actions have committed member-states to change their policies and practices. There are no legally binding treaty provisions or directions that specifically address gender violence. The European Commission confirmed this stance in its 2004 Report on Equality between Men and Women stating that ‘the prevention of and fight against domestic violence fall mainly under local and national competences of memberstates’ (European Commission 2004: 11). The only tangible legal change in the Central and Eastern European countries from a gender equality perspective arising from the EU accession was the passing of the Equal Opportunity laws in the Central and Eastern European 2004 accession countries (Humer 2004). By framing violence against women as a human rights issue and announcing various resolutions and recommendations, the EU has exerted some pressure on memberstates and candidate countries to deal more effectively with domestic violence. For example, the Council of the European Union held the first meeting of experts regarding the issue of gender violence in December 1998, resulting in the adoption of the ‘Measures to Combat Male (Domestic) Violence against Women Standards and Recommendations.’ Fifty-two explicit norms and recommendations were listed in 7 Three main reasons can explain the Central and Eastern European countries’ profound interest in joining the EU. First, EU membership means a seat at the table where decisions affecting all of Europe are made. With the exception of Poland, the small Central and Eastern European states might not wield much influence among other members, but according to general rationale, it is better to be inside looking out than outside looking in. Second, joining the EU is very important symbolically, signifying the end of the Cold War and the continent’s division. It also symbolizes the inclusion of former communist countries into the ‘rich man’s club.’ In practical terms, it also means an end to many decades of humiliation and the inconvenience of having to go through often-long procedures to visit relatives or work in Germany or Austria. Third, from an equally practical consideration, as poorer members of a wealthy organization (with the notable exception of Slovenia, which will soon become a net payer to the EU), the Central and Eastern European states would receive a cornucopia of subsidies, as well as opportunities for more or less unrestricted study and work abroad. Joining the EU is still regarded in the region as an essential step in its rite of passage into the modern, prosperous, and democratic world. For a review of the EU’s passive and active leverage, see Vachudova 2005.

190


this document, focusing on the responsibilities of police organizations and adequate criminal proceedings (Measures 2002). The EU-endorsed recommendations also emphasized the need for cooperation between state institutions and NGOs, building on the experience of previous decades in many West European countries. During 1999, two more meetings were held, resulting in 10 additional recommendations to the original 52. The additional provisions emphasized that member-states need to establish explicit laws about domestic violence, to improve and closely monitor their implementation, and to increase state funding for services for victims of domestic violence, such as shelters, hotlines, legal aid, housing, training, and employment. In addition, the new recommendations included a focus on the importance of expanding transnational networks, which the EU’s Daphne project is supposed to assist. In the wake of these policy recommendations, the European Parliament passed a ‘Recommendation on Combating Violence against Women’ in February 2006, which focused on different forms of violence and was explicit in its encouragement to take action (European Parliament 2006). Following this line of reasoning, the European Union dedicated €50 million to the creation of a Gender Institute, located in Vilnius and Lithuania, to focus on gender equality issues (Employment, Social Policy, Health and Consumer Affairs Council 2006). In spite of these gestures, both domestic and international events continue to constrain the development of deeper cooperation between the EU institutions and member-states’ social policy regarding domestic violence. In addition to the abovedescribed reservations of the EU to engage in member states’ social policies, the EU’s flagship Daphne Program has become a prime target for Central and Eastern European NGOs’ criticism. The Daphne Program was originally a four-year EU funding scheme, launched in 2000 and then extended for four more years in 2004 to help prevent violence against children, young people, and women. While its main aims were to provide support to the victims of violence and prevent their future exposure to violence, its agenda has increasingly included many other themes as well. In 2006, members of the European Parliament tabled some initiatives to separate the Daphne projects concerning domestic violence from the other projects, such as the fight against drugs. However, the focus of the Daphne projects increasingly became the protection of children from violence (Justice and Home Affairs 2006). On the surface, Daphne is a very attractive supporting mechanism for NGOs working to prevent violence. A few, but slowly increasing number of Central and Eastern European NGOs have managed to participate in it (Montoya Kirk and Moburg-Jones 2006). However, many of these NGOs charge that Daphne is imposing an immense administrative bureaucratic burden that only long-standing and well-established professional groups can muster (Interviews with Habeas Corpus Working Group, Budapest Hungary, summer 2006). Many Daphne projects require the cooperation of three or more previously non-affiliated NGOs from different countries to propose mega-projects that can only survive until they get the (often late) EU funding. These high expectations toward a fledging civil society have led to Central and Eastern European NGOs’ disillusion in a partner whom they aspire to satisfy in their need of external support and validation.


191

With Poland, the Czech Republic, Slovakia, Hungary, and Slovenia joining the EU in 2004, women’s NGOs hoped that gender equality in Central and Eastern Europe would become a center of attention as the EU and new member countries battled over the meaning of minority protection (although they mostly focused on the Roma/Gypsy populations). However, this expectation was not realized because for the EU, gender equality issues have been a rather low priority, and accession negotiations focused on the required chapters which were mostly devoid of social matters. While EU institutions provided an important policy venue for feminists to argue for equal pay and equal treatment in employment, this area of gender equality rather strictly falls under the realm of economic issues and it has been difficult to extend this message to related areas.8 In contrast to the limited actual options that the EU accession offered, the image of the EU created some leverage for the Central and Eastern European NGOs to bring more attention to domestic violence. At the doorstep of EU membership, the Central and Eastern European governments wanted to look their best, even if attention to domestic violence was not on the EU’s list of expectations. This posturing offered an opportunity for NGOs to advance domestic violence policies and recommend the application of international norms. The list of legal changes related to domestic violence in all 2004 Central and Eastern European EU-member countries testify that NGOs successfully used the image of the EU as an emblem of human rights and democracy to advance their gender equity-related claims. Government equal opportunity offices started to appear at the time of EU accession, with a separate branch often reserved for women’s issues. These government offices were the direct links that NGOs used rather successfully to connect to and lobby governments. The feminist NGOs’ leverage was nothing more than symbolic framing where they presented their claims regarding domestic violence as something that was expected of prospective members of the EU. Political opportunity tends to be widest at times of transition, when fears and expectations push decision-makers to be more sensitive to potential constituents’ claims. Even though some of the NGO’s legislative proposals did not become law, the 2003 date when nearly all of Central and Eastern European states introduced domestic violence bills testifies to the power of this symbolic framing strategy. Although Slovenia passed its domestic violence bill in 1992–93, even this earlier date harmonizes with the above explanation of symbolic strategic framing. Having just declared independence, Slovenia was trying to differentiate itself from the warring successor states of the former Yugoslavia. In addition to these both symbolically and strategically favorable conditions in both the domestic and the international environment, Slovenia inherited a relatively strong and independent women’s movement from socialist times (Jalušič 2002). Slovene activists took advantage of these opportunities and not only established a strong and lively relationship with the government’s Office of Equal Opportunities, but also gained renewable state support for independently run hotlines and shelters (Interviews, Čelje Women’s Shelter, 8 For a review of the European Union and its effect on gender equality in employment, see for example Hoskyns 1995; Elman 1996b; Mazey 1998; Kilpatrick 2001; Cichowski 2002; and Ellina 2003.

192


Čelje, and Office of Equal Opportunities, Ljubljana, Slovenia 2004). Without these structural advances, Slovene NGOs would have faced the same difficult narrowing of avenues for dialogue about domestic violence that the others experienced after 2004, when the Central and Eastern European countries became members of the European Union. The murky nature of the EU’s post-2005 political project allowed time and provided further ideological ammunition to the more conservative and nationalist voices in Central and Eastern Europe. These politicians began to question and challenge both trust in the EU and the reasons why they should sacrifice their newly won sovereignty in favor of a distant bureaucracy. Conclusions: Central and Eastern European Negotiations of Global, Regional, and Local Norms In the past decade and a half, Central and Eastern Europe has inched toward implementing a meaningful democratic environment. Because domestic violence robs its victims of physical safety, it fundamentally undermines a basic premise of equality, which is itself a bedrock of democratic political participation. Acknowledging domestic violence, changing public opinions regarding its victims and the perpetrators, and altering a whole array of public policies have been a major test for the new democracies. Why did the Central and Eastern European governments adopt a middle ground in terms of policies between what feminists consider as international standards and taking no action at all? The EU did not embrace this issue and has not provided either enough incentives or made a threat so that these governments would take domestic violence more seriously. This middle ground has proved to be a treacherous landscape for the EU because it has lost credibility as an engine promoting human rights and democratization by not standing up stronger for establishing and implementing anti-violence legislation. The middle ground also proved dangerous for Central and Eastern European governments because, on the one hand, the governments seem to demonstrate some tangible changes in domestic violence policy but on the other hand, these legal changes remained highly fragmented and barely implemented (International Helsinki Federation of Human Rights 2000a and 2000b). In a nearly uniform manner, Central and Eastern European governments have enacted a few, usually symbolic changes. Examples of symbolic actions by governments can amount to, for example, passing changes in the legal or the penal code, but then not following up these changes with more detailed implementation of the law and appropriate training of lawyers, social workers, and the police. The changes did not amount to a systematic and interlocking overhaul of the legal system and social services that human rights activists and feminists argue are necessary to help victims of domestic violence. International norms related to domestic violence diffused and cascaded to a mediocre level of half-hearted official responses in Central and Eastern Europe. Instead of calling attention to violence against women, the politically correct terms became more neutral terms, such as domestic violence. This neutral terminology has


193

further perpetuated the image of women being equally the perpetrators of domestic violence. As a controversial and stalemated issue in Central and Eastern Europe, domestic violence ultimately blended with other hotly debated contemporary policy topics, such as prostitution, abortion rights, and voluntary sterilization. These public policy issues stand at the juncture of human rights, social responsibility, and gender roles. They have been the subjects of public debates not least because of EU integration and the enhanced global encounter between local publics, NGO activists, international organizations, and state governments. References Alvarez, L. (2005). ‘Sweden Boldly Exposes a Secret Side of Women’s Lives’. The New York Times. April 6. Bunch, C. (1995). ‘On Globalizing Gender Justice: Women of the World Unite’. The Nation 261(7) (September 11), pp. 230-235. Buzawa, E. and C. Buzawa (2002). Domestic Violence: The Criminal Justice Response. Thousand Oaks, CA: Sage Publications. Childs, D. and R. Popplewell (1996). The Stasi: The East German Intelligence and Security. New York, NY: New York University Press. Clarke, R. (1997). ‘Combating violence against women in the Caribbean’. In Brasiliero, A. (Ed.), Women against Violence: Breaking the Silence: Reflecting on Experience in Latin America and the Caribbean. New York, NY: UNIFEM. Daniel, J. and A. Banks (2003). ‘Domestic Violence’. In Slater, L. (Ed.), The Complete Guide to Mental Health for Women. Boston, MA: Beacon Press. Deanham, D. and J. Gillespie (1999). Two Steps Forward... One Step Back. Health Canada: Family Violence Prevention Unit. Deletant, D. (1995). Ceausescu and the Securitate: Coercion and Dissent in Romania, 1965-1989. Armonk, NY: M.E. Sharpe. Dobash, E. and R. Dobash (1992). Women, Violence and Social Change. New York: Routledge. Elman, A. (1996a). Sexual Subordination and State Intervention: Comparing Sweden and the United States. Providence, RI and Oxford, UK: Beghahn. _________. (1996b). ‘Introduction: The EU from Feminist Perspectives’. In A. Elman (ed.), Sexual Politics and the European Union. Providence: Berghahn Books. Employment, Social Policy, Health and Consumer Affairs Council (EPSCO). (2006). Lithuania to host EU sex equality institute. December, 01. Also available at: EUBusiness http: //www.eubusiness.com/Social/061201193740.99f0355e. European Commission (2004). Report on Equality between Women and Men. Brussels, Belgium: EC. Also available at: http: //ec.europa.eu/employment_ social/news/2004/feb/gmr_com04115_en.html (Last accessed Feb. 06, 2007). European Parliament (2006). Current situation in combating violence against women and any future actions. (Dossier of the Committee: FEMM/6/24513, Reference: FEMM/6/24513) Also available at: http: //www.europarl.europa.eu/oeil/file. jsp?id=5210072 (accessed Feb. 09, 2007).

194


Grabbe, H. (2002). ‘European Union Conditionality and the Acquis Communautaire’. International Political Science Review 23(3), pp 249-268. Hammarberg, T. (2006). Gay Prides marches should be allowed-and protected. (July 24) Strasbourg, France: Council of Europe, Commissioner for Human Rights. Available at: www.coe.int/t/commissioner/Viewpoints/previous2006_en.asp, accessed Feb. 07, 2007. Hanmer, J. and C. Itzin (eds.) (2000). Home Truths about Domestic Violence: Feminist Influences on Policy and Practice. New York, NY: Routledge. Humer, Ž. (2004). Care, Justice and Equality: An Ethic of Care and the Act on Equal Opportunities for Women and Men. M.A. thesis. Budapest, Hungary: Central European University. Information Centre Against Violence. (2000). Legislation on Protection from Violence, Information Folder for Women. Vienna, Austria: WAVE. Also available at: www.wave-network.org/cmsimages/doku/goodpractice.pdf (accessed Feb. 06, 2007). International Helsinki Federation for Human Rights. (2000a). Women 2000: An Investigation into the Status of Women’s Rights in Central and South-Eastern Europe and the Newly Independent States. International Helsinki Federation for Human Rights: Austria) http: //www.ihf-hr.org/ (accessed 16 October 2006). _____. (2000b). Countries of Central and South-Eastern Europe and the Former Soviet Union Ignore their own Laws Granting Equal Rights to Women, New Investigation Shows. http: //www.ihf-hr.org/documents/doc_summary.php?sec_ id=58&d_id=1310 (accessed 16 October 2006). Jalušič, V. (2002). How We Attended Feminist Gymnasium. Ljubljana: * cf. Justice and Home Affairs (2006). Daphne II – European Commission. Available at: http: //ec.europa.eu/justice_home/funding/daphne/funding_daphne_en.htm, (accessed Feb. 07, 2007). Kaplan, T. (2001). ‘Women’s rights as human rights: Women as agents of social change’. In M. Agosin (ed.), Women, Gender and Human Rights: A Global Perspective. New Brunswick, NJ: Rutgers University Press. Kardam, N. (2004). ‘The emerging global gender equality regime from neoliberal and constructivist perspectives in international relations’. International Feminist Journal of Politics, 6(1), pp. 85-109. Keck, M. and Sikkink, K. (1997). Activist beyond Borders: Advocacy Networks in International Politics. Ithaca: Cornell University Press. Kitlinski, T. and Leszkowicz, P. (2005). God and Gay Rights in Poland. Gay & Lesbian Review Worldwide, 12(3), pp. 26-7. Konrád, G. (1984). Antipolitics: An Essay. Translated from the Hungarian by Richard E. Allen. San Diego, CA: Harcourt, Brace, Jovanovich. Krizsán, A. and V. Zentai (2004). ‘Gender policies in Hungary on the road to an enlarged Europe’. Paper prepared for the 2004 UACES Conference, September, Birmingham. UK. Also available at: http: //www.mageeq.net/research.htm#Publ (accessed Feb. 07, 2007). Marcus, I. 1994). ‘Reframing “Domestic Violence”: Terrorism in the Home’. In Albertson Fineman, M. and R. Mykitiuk (eds.), The Public Nature of Private Violence. New York: Routledge.


195

McCue, M. (1995). Domestic Violence: A Reference Handbook. Santa Barbara, CA: ABC-CLIO. Measures to Combat Male (Domestic) Violence Against Women Standards and Recommendations: General Principles. (2002). Austrian Presidency of the Council of the European Union, July – December 1998, Conference of Experts – Police Combating Violence Against Women, Baden. Also available at: http: //www. legislationline.org/legislation.php?tid=99&lid=5755 (accessed Feb 06, 2007). Merry, S. (2006). Human Rights and Gender Violence: Translating International Law into Local Justice. Chicago and London: University of Chicago Press. Meyer, J. and R. Scott. (1992). Organizational Environments: Ritual and Rationality. 2nd edition. Beverly Hill, CA.: Sage Publications. Meyer, J., J. Boli, G. Thomas, and F. Ramirez (1997). ‘World Society and the NationState’. American Journal of Sociology 103, pp. 144-181. Montoya Kirk, C. and E. Moburg-Jones (2006). ‘The European Union and Transnational Advocacy: Combating Gender Violence in the Post-Communist Member-States’. Paper presented at the American Political Science Association Conference, August 28-Sept. 2, Philadelphia, Pennsylvania. Nowakowska, U. and M. Jablonska (2000). Violence against women. In U. Nowakowska (ed.), Polish Women in the 90s. Warsaw, Poland: Women’s Rights Center. Open Society Institute (OSI) (2006). Violence against Women: Do the Governments Care? NGO Facts Sheets on the State Response. VAW Monitoring Program. (New York, NY: OSI) and Available at: http: //www.stopvaw.org/Violence_against_Women_Do_the_Governments_ Care_NGO_Reports_on_the_State_Response2.html (accessed Feb. 07, 2007) Risse, T. and K. Sikkink (1999). ‘Socialization of International Human Rights Norms into Domestic Practices: Introduction’. In T. Risse, S. Ropp and K. Sikkink (eds.), The Power of Human Rights: International Norms and Domestic Change. New York, NY: Cambridge University Press. Pizzey, E. (1982). Prone to Violence. Feltham, Middlesex, UK: Hamlyn. Also available at: http: //www.bennett.com/ptv/index.shtml (accessed Feb. 06, 2007). ________. (2005). ‘Domestic Violence Is Not A Gender Issue’. Email from the author, October 5. Also available at: http: //fathersforlife.org/pizzey/DV_is_not_ a_gender_issue.htm (accessed Feb. 06, 2007). Rossilli, M. (ed.) (2000). Gender Policies in the European Union. New York, NY: Peter Lang Publishing. Serbanescu, F. and M. Goodwin (2005). ‘Domestic Violence in Eastern Europe: Levels, Risk Factors and Selected Reproductive Health Consequences’. Paper delivered at the European Conference on Interpersonal Violence, 26 September 2005, Paris, France. Thomas, D. and M. Beasley (1993). ‘Domestic Violence as a Human Rights Issue’. Human Rights Quarterly, 15(1), pp. 36-62. Tierney, K. (1982). ‘The battered women movement and the creation of the wife beating problem’. Social Problems, 29(3), pp. 207-220. Tóth, O. (1999). Erőszak a családban. (Violence in the Family) Tárki Társadalompolitikai Tanulmányok 12. Budapest: Tárki.

196


______ . (2002). A 22–26 éves korosztály társadalmi beilleszkedésének problémái. Kutatási zárójelentés az OTKA T025569 számú kutatásához. (Problems of Social Integration for the Generation of 22-26 Year Olds). Budapest: MTA SZKI. Tsutsui, K. and C. Wotipka (2004). ‘Global Civil Society and the International Human Rights Movement: Citizen Participation in Human Rights International Nongovernmental Organizations’. Social Forces 83(2), pp. 587-620. United Nations (2006). Secretary General’s Study on Violence Against Women. Document A/61/122/Add.1. New York, NY: United Nations. UN Commission on Human Rights (1996). Report of the Special Rapporteur on Violence against Women, Its Causes and Consequences. 52nd Session, Agenda Item 9(a), at 18, UN Doc. E/CN.4/1996/53/ Vachudova, M. (2005). Europe Undivided: Democracy, Leverage, and Integration after Communism. New York and Oxford: Oxford University Press. Vanya. M. (2001). ‘Domáce násilie v predstavách slovenských žien’. (What Slovak Women Perceive to Be Domestic Violence) Sociológia, 33 (3), pp. 275-296. Verloo, M., L. Maratou-Alipranti, J. van Beveren, I. van Lamoen, and K. Tertinegg (2004). ‘Framing the organisation of intimacy as a policy problem across Europe’. Paper for the 2nd Pan-European Conference on European Politics of the ECPR Standing Group on European Union Politics, Bologna, 24-26 June. Also available at: http: //www.mageeq.net/research.htm#Publ (accessed Feb. 07, 2007). Veseliĉ, Ŝ. (2006). ‘Domestic Violence in Slovenia From The Perspective of NGOs’. Paper presented at International conference ‘Bridging Gaps – Working Together For the Prevention of Violence against Women and Children’ Vienna City Hall, Vienna, Austria, January 23. Also available at: www.wave-network. org/cmsimages/doku/6b_veselic_slovenia.pdf (accessed Feb. 06, 2007). WAVE (Women Against Violence Europe) (2002.) More Than a Roof Over Your Head: A Survey of Quality Standards in European Women’s Refuges. Vienna, Austria: WAVE. WAVE (Women Against Violence Europe) (2000). Good Practice Models. Vienna, Austria: WAVE). Also at: http: //www.eurowrc.org/03.network/17.network.htm (accessed Feb. 06, 2007). Weldon, L. (2002). Protest, Policy, and the Problem of Violence Against Women: A Cross-National Comparison. Pittsburgh: University of Pittsburgh.

Chapter 12

Modelling Democratic Transition in Southern and Central Europe: Did East Germany Experience ‘Transición’ or ‘Ruptura’? Gareth Dale

In the waves of European Union enlargement over the last three decades, most of the accession states have experienced a transition from authoritarian to parliamentarydemocratic rule. Indeed, from 2007, a majority of EU member states are ‘new democracies’, having begun their transition from authoritarian rule in the 1970’s or later. This chapter examines the various modes of transition experienced by these new EU member states, but focuses especially on the case of East Germany. The 1989-90 regime change in East Germany is one of the best known of democratic transitions, by virtue of two media-spectacular events – the exodus of East German citizens through Hungary and the storming of the Berlin Wall – as well as its symbolic significance as the keystone of the Soviet imperium.1 Because democratic change was imbricated within the process of German unification, of which the leading architects were external, the East German experience has a sui generis quality, and appears better suited to historical analysis than to comparative study by political scientists. Yet there are aspects of East Germany’s democratization process, notably the mechanisms by which the old regime relinquished power and acquiesced to democratic reform, that have proved amenable to comparative approaches. In the early scholarly analyses of the transition in East Central Europe, attention was drawn to features that were shared throughout the region. It was not just that outcomes (marketization, democratization), were similar, but certain aspects of the transition process too. In each case, some form of negotiation occurred. Each was characterized by the rapid disintegration of existing political institutions, by the ‘aggravation of economic dislocations’, by the proliferation of political movements that broke into the political arena, and by the establishment of transitory power arrangements in which opposition forces acquired varying degrees of access to the official political process (Ekiert 1991: 287). 1 This chapter draws in part upon my ‘“A Very Orderly Retreat”: Democratic Transition in East Germany, 1989–90’, Debatte. Journal of Contemporary Central and Eastern Europe, 14 (1) 2006.

198


Equally, the differences in modes of transition could not be overlooked. In distinguishing amongst these, analysts could draw upon a large body of literature. Portugal and Spain, among the first transitions of the so-called ‘third wave’, were commonly taken as representative of two distinct routes to democratization. The former exemplifies transition by ‘rupture’, in which an inflexible old guard fails to compromise when confronted by mass social movements, allowing hitherto marginal parties or middle-ranking officers and functionaries to replace or revolutionize existing institutions. Such transitions are rapid and forceful, involve extensive popular mobilization, and may lead to challenges to property relations. In the case of Portugal, ‘the working class took the world by surprise by leading the most massive seizures of property in Europe since the Russian Revolution. Workers occupied more than 23 percent of the nation’s farmland in less than twelve months and took control of more than 940 industrial enterprises’ (Bermeo 1997: 308). Large sections of Portuguese society experienced a democratic ferment. Empty houses were occupied; cultural centres were established. Some events took on a carnivalesque quality, as when a golf course was occupied and opened to all – except its existing members. The old authoritarian élite lost control of the political process, usurped by radical governments which, for over a year, set about replacing or transforming existing institutions. Independence was granted to the colonies, and the vertical command structure of the armed forces was radically transformed. The middle-ranking officers who toppled the dictatorship, writes Nancy Bermeo (1997: 308), ‘engineered the most extensive purges of any democratic state in the third wave, including those of eastern Europe.’ The contrasting course, exemplified by Spain in the late 1970s, is driven primarily by élites associated with the old dictatorship who accede to democratic transition because they believe it will provide them with a new formula for legitimating their rule. In reference to the pivotal role played by negotiations between regime and opposition, the model is commonly known as transition through transaction. In the Spanish case, a ‘class compromise’ was hammered out, in which parliamentary democracy and other concessions – including trade union representation in companies, expanded parliamentary control over the social security system, tax reform, increased public investment and a statute for nationalized industries – were offered to the left parties and trade unions in exchange for a commitment on their part to abandon their opposition to the monarchy and to the privileges of church and army, to advocate wage restraint, acquiesce to austerity measures and renounce claims for the return of funds sequestered by General Franco’s regime (Maravall and Santamaria 1986; Bermeo 1997: 310). Although most of the concessions to the left listed above were not implemented, the pact, signed at the Moncloa presidential palace, served to reassure élites that democratic transition would not signal an attack on entrenched power and privilege. High levels of political violence and of strike activity notwithstanding, the Spanish working class never challenged property relations as their counterparts in Portugal had done, and neither was there major disruption to personnel continuity at the top of the state apparatus. Core sections of the old regime were integrated into the new order, with Francoist strongholds remaining in business and banking, the judiciary, the media, public administration, and the army. Symbolic continuity was assured by the persistence of the monarchy,

Modelling Democratic Transition in Southern and Central Europe

199

albeit shorn of its more imperious powers. For mainstream transitology, 1970s Spain serves as a benchmark: it is a paradigm case of a transition in which a compromise among class interests [is] forged to reassure the bourgeoisie that its property rights will not be jeopardized for the foreseeable future, and to satisfy workers … that their demands for compensation and social justice will eventually be met. (O’Donnell and Schmitter 1986: 46)

Alongside the two paths represented by the Iberian nations, others may be added. For the purposes of this article, the most pertinent is ‘transition through extrication’, introduced by Scott Mainwaring and developed by his Notre Dame colleague, J. Samuel Valenzuela. As with transitions by collapse (such as Greece in 1974 and Czechoslovakia and Romania in 1989), extrication involves a sharp break with the formal rules of the authoritarian regime. But, as with transitions by transaction, the authoritarian regime is strong enough to dictate important terms of the process, and the outgoing rulers ‘hold on to power for a significant length of time beyond the onset of the crisis that sets in motion the process of transition’ (Mainwaring 1992). In brief, this third category of transition describes those – such as Peru in 1980 and Uruguay in 1985 – in which the rules of the old regime are abandoned but the rulers retain sufficient strength to negotiate their retreat from power (Valenzuela 1992: 74). Valenzuela includes East Germany in this category, but does so in passing, without providing supporting evidence. As regards modes of transition in Eastern Europe 1989-91, a number of studies have drawn attention to the distinction between Poland and Hungary, on the one hand, characterized by negotiated pacts between party-state and opposition, and East Germany and Czechoslovakia, on the other, where mass movements forced significant political concessions within a short time frame. In 1991, Judy Batt, of Birmingham University, penned an influential article that sought to explain the differences between the two paths of Eastern European transition. She discusses Poland and Hungary under the rubric ‘failed reform’. In both, hopes in economic reform in the 1970’s faded in the following decade as economic difficulties mounted; élites began to lose faith in the communist project, and their ability to repress or co-opt opposition diminished. The Polish Government’s defeat in a referendum on economic policy toward the end of 1987, together with a resurgence of industrial action, led to the convocation of Round Table negotiations which were successfully concluded in early 1989. In Hungary, also in 1987, the need for an ‘anti-crisis pact’ had become apparent to leading figures in regime and opposition élites, a development that gave rise to negotiated democratization in 1989. Élites in the latter two countries, by contrast, resisted reform. The Czechoslovak and East German economies were highly centralized, autarkic, and relatively stable; the nomenklatura2 was, in each case, unified and disciplined; and the security forces were used extensively to keep oppositional forces at bay. These were regimes which ‘totally rejected reform, because they saw it as incompatible with communist power’; they therefore ‘faced total and rapid collapse when confronted with the challenge of Gorbachev’s perestroika’ (Batt 1991: 368). In Prague and East Berlin, ‘the intransigent ruling élite was unprepared for 2

‘Nomenklatura’ refers to the lists of senior positions in Party, state and economy.

200


negotiation, and collapsed in the face of spontaneous mobilization of the population’ (Batt 1991: 369). In sum, democratization occurred not through negotiated transition but ‘regime collapse and velvet revolution’ (Batt 1991: 384). In East Germany, the government was forced to concede elections, allowing West German political parties to move in and assume command. In subsequent years, these models were frequently applied in comparative analyses of the East European transitions. Klaus von Beyme, for example, differentiated between ‘negotiated revolution’ in Hungary and Poland, the ‘implosion of the Communist regime’ in Czechoslovakia and East Germany, and the cases of Romania and Bulgaria, in which transition was controlled by second-rank cadres of the old regime (not unlike the ‘extrication’ model of the Notre Dame school) (Von Beyme 1996). Of greater relevance to this essay, due to the detailed attention paid to the East German case, was a comparative study by the US political scientist Daniel Friedheim. As with Batt, Friedheim contrasts pacted transition in Poland and Hungary (as well as Spain), with regime collapse in East Germany, Czechoslovakia (and Portugal). Whereas Batt’s piece is discursive, with extensive discussion of background conditions, Friedheim proceeds by isolating two variables: regime divisions and the organization of political society. In line with a growing body of literature that criticizes mainstream transitology for its overemphasis on the degree of control that outgoing rulers exert over the transition process, with popular organization left as a residual category, he includes the latter as a core variable, and concludes that the experience of the 1989 revolutions reveals a need to ‘bring society back into democratic transition theory’ (Friedheim 1993: 512). Friedheim’s hypothesis is that a transition is likely to be pacted ‘when the authoritarian regime is split over initiating radical reform and an opposition has had time to organize itself’ (Friedheim 1993: 489).3 Otherwise, where the old regime remains unified and political organizations in civil society exhibit little autonomy, transition will likely ‘occur through regime collapse and the mass mobilization that then becomes possible’ (Friedheim 1993: 489). Friedheim demonstrates that the higher the ranking on each variable (disunity of regime and organization of opposition), the greater is the chance of negotiated transition as against regime collapse. Thus, in the case of Spain, he highlights the regime divisions following Franco’s death, and the existence of oppositional organizations in an illegal but tolerated grey zone, from which political parties could rapidly emerge, presenting premier Adolfo Suárez with well-organized negotiating partners. In Portugal, by contrast, opposition organizations before 1974 were stifled by legal restrictions and a formidable secret police; the regime, meanwhile, remained comparatively unified. The result was a ‘collapsed transition’, via a series of interim revolutionary governments. If there exists one clear-cut example ‘of how weak opposition and a unified, hardline regime can generate a transition through collapse’, Friedheim suggests, it is East Germany in 1989 (Friedheim 1993: 511). Up until October of that year, opposition was weak, and Erich Honecker’s Socialist Unity Party (SED) regime 3 A pact is defined as a mutual understanding between regime and opposition élites about how to reach free elections, on the basis of mutual guarantees for the ‘vital interests’ of those entering into it. It may take the form of a round table, secret consultations, or both.


201

remained united. ‘In this context, instead of negotiating a transition, the regime quickly collapsed, surrendering control of the streets, and even its Stasi archives, to peaceful demonstrators.’ (Friedheim 1993: 511). In the process the regime did attempt to swerve onto a track of transition by extrication, by means of a pact prepared at round table talks, but this failed, largely due to the lack of organization of opposition forces (Friedheim 1993: 493-4). Being sponsored by a disintegrating regime, the East German round tables were not instances of genuine pact formation, for they merely coordinated the final details of regime implosion. Unable to locate credible negotiating partners, the GDR regime ‘withered away’, and surrendered power to the opposition. Rather than endeavouring ‘to implement radical reform’ or to ‘defend itself by all available means’, it simply collapsed (Friedheim 1993: 494). The portrayal of the East Berlin regime as having ‘quickly collapsed, surrendering control of the streets’ (Friedheim 1993: 494), concords with that of many other political scientists, including Judy Batt, with her assessment that the ‘ruling élite collapsed in the face of spontaneous mobilization’, and her assigning of East Germany to the category ‘regime collapse and velvet revolution’. It has also received support from historians, notably Mary Fulbrook. In her pioneering Anatomy of a Dictatorship, Fulbrook argues forcefully that the functionary class as a whole experienced a ‘loss of the will to power’ in the weeks that followed the storming of the Berlin Wall (Fulbrook 1995: 62). Up until that date (November 9), she contends, the SED was engaged in a ‘desperate attempt to cling on to power’, but thereafter, functionaries ‘lost the will to rule’ (Fulbrook 1995: 259). The picture she paints of the SED post-Wall fall is one of ‘disarray … Functionaries were resigning their positions, members leaving the party en masse, no decisions could be reached or carried out.’ The end of SED domination, she concludes, ‘was marked by the loss of its functionaries’ will to rule’ (Fulbrook 1995: 262-3). In this survey, the main points of which are summarized in Table 11.1, a number of elements are uncontentious. Communism did collapse in East Germany, more rapidly than in Hungary or Poland, under greater immediate pressure from mass movements, and with a lesser role for the organized opposition. Some questions, however, deserve further scrutiny. To what extent was the SED a unified monolith before 10 November 1989? Did the regime spurn radical reform altogether? How adamant was its rejection of negotiation? In what sense did functionaries lose the will to rule? And in what ways was power ‘surrendered to the streets’? In the following I present a brief history of the East German revolution, beginning with a brief discussion of Soviet economic decline before addressing the five issues on which the above questions turn: regime unity; the organization of political society; loss of the will to rule; initiation of radical reform; and the extent of negotiation. The article will find that (i) the appearance of regime unity masked major underlying divisions and declining morale; (ii) many oldregime functionaries were able to adapt to changing circumstances and to learn from experiences elsewhere in Eastern Europe; (iii) radical reform, and pact making, were taken further in East Germany than is generally acknowledged, and (iv) the loss of the ‘will to power’ was largely an illusion. These findings raise theoretical questions concerning democratization in Central and Eastern Europe that will be broached in the final sections.


202

Table 12.1

Models of Transition Rupture / Collapse / ‘Velvet Revolution’ GDR, Czechoslovakia

Negotiated Transition

Reforms in 1980s

None

Failed

Regime unity (1989)

High

Low (or falling)

Exemplified by

Hungary, Poland

Political élite’s commitment to Communism Opposition (late 1980s)

Strong

Weak (or falling)

Repressed

Tolerated

Radical reform instigated by

Popular movements

Regime reformers

Rapid

Gradual

Initially inflexible; then ‘loss of will to rule’ Surrendered to ‘the streets’ / opposition

Adapt and change

Transition speed Functionaries’ psychology during transition Political power

Shared with opposition

Soviet Economic Decline: In the Shadow of the European Union The transformation of Eastern Europe in 1989 took citizens of the region and Western analysts alike by surprise. In the case of East Germany, no major public protests had occurred since 1953; the state seemed omnipotent. Yet something had changed. In the 1960s, SED leaders had exuded confidence. Walter Ulbricht even felt able to predict that the GDR would overtake its Western rivals ‘on the economic front’. From the mid-1970s, however, signs of deteriorating confidence proliferated. Providing the backdrop to this sea change was Soviet-bloc economic decline. The causes of the long-term decay in Soviet-bloc competitiveness are complex, but if one stands out it is that the internationalization of the world economy in the post-war period put the region at a serious disadvantage. Its economies were relatively ‘trade averse’, with international trade mediated through export and import licenses and administered by cumbersome foreign trade organizations. Their limited position on world markets was expressed in non-convertible currencies, impeding multilateral trade. Trade aversion was exacerbated by the West, which treated the Soviet states as ‘least favoured nations’. Comparative autarky constrained economic development, slowing technology transfer and emulation. In this respect, West European economic integration posed an intriguing challenge to policymakers in Europe’s other half. On one hand, its political motivation was avowedly anti-Soviet. Washington supported European integration as a means of buttressing post-war reconstruction, rehabilitating the FRG, and binding it and the rest of Western Europe economically into the American-dominated international monetary and trading sphere. It was a keystone in the formation of a common Western front


203

against the Soviet Bloc. On the other hand, West European integration provided a model of how international cooperation can boost economic growth and forge regional political cohesion. Soviet-bloc policymakers were alive to this aspect, and took steps to follow suit. Founded in 1949 as an echo of the European Recovery Programme, the Council for Mutual Economic Assistance (Comecon) lay dormant for its first decade, during which time post-war reconstruction in the Soviet realm proceeded along autarkic lines. But in the late 1950s it was awakened by Khrushchev, apparently motivated by a concern to counter centrifugal tendencies within Eastern Europe as well as to stimulate economic efficiency. Integration, it was argued, would enable greater specialization in research and production, facilitating large-scale series production that would enhance competitiveness. Khrushchev‘s plans were welcomed by his counterparts in Eastern Europe, notably in East Germany. From the early 1960s, repeated attempts were made to foster ‘socialist internationalization’, with Comecon acting as a framework for the coordination of research and division of labour amongst participating states. Significant movement towards integration was charted in this period. Two Comecon banks were established, in 1963 and 1970, to handle settlements in transferable roubles and to provide loans for intra-Comecon projects. Dozens of joint ventures between Comecon firms were established. A ‘Soviet-world car,’ the Lada, was manufactured, with components produced throughout the area. Perhaps the most notable achievement was the ‘unified system of electronic computing’, that strove to deepen cooperation in the field of data processing. Beginning in the late 1960s, over 20,000 scientists and engineers and around 300,000 employees in some seventy firms across seven countries were involved. Nothing equal to this happened elsewhere in the world until five or ten years later; Olaf Klenke (2001: 72) flags it as the ‘world’s first multinational electronics project’. Comecon integration, however, was from its inception beset by strife. Despite some progress in the 1960s, most plans thereafter scarcely got off the drawing board. The standard explanation for the lack of success centres on the fact that, because enterprises were bound so tightly into state planning apparatuses, cooperation was invariably beset by national egotism. Even the development of a division of labour, as Marie Lavigne points out (1991: 95), could be seen as a threat to ‘economic’ as well as ‘national’ security: it ‘is a risky undertaking as it may lead countries to forsake vital elements of their industrial base, leaving these to partners who may then not be able to meet their obligations.’ While similar egotisms afflict international cooperation in Western Europe too, in the EU far more power is devolved either to the firm or upwards to the supranational level, both of which are at one remove from the nation state. Conflict between Comecon members over the distribution of costs and benefits was endemic. In joint projects the tendency was for each side to attempt to impose the major risks upon the partner, and for each to seek to maximize inward technology transfer and minimize the reverse flow. East Germany, for instance, tended to find itself delivering high tech goods to the USSR but was largely excluded from forms of cooperation in which technology transfer flowed the other way. For their part, GDR policymakers behaved in similar fashion. They resisted, to give one example,

204


plans for the importation of computer chips from Czechoslovakia. Although the ostensible reason was Czechoslovakia’s technological backwardness, one suspects that an additional motive was the Germans’ jealous (or ‘entrepreneurial’) attempt to build and maintain a monopoly position within Comecon. For many analysts, a good example being Harriet Friedmann (1998: 216), Comecon integration should therefore be conceived as having ‘foundered upon the contradictory requirements of bloc unity and national autarky.’ For Friedmann, Comecon integration and national autarky represented two competing growth strategies. The former succumbed to ‘national opposition’ – notably that of Romania in the early 1960s – ‘which found its material basis in the [ … ] Stalinist program of industry and autarky.’ Although this explanation is not without substance, it fails to capture certain nuances. The claim that Romania’s opposition to integration was driven by a ‘pull to autarky’ does not reveal the full story. This was the accusation levelled against it by officials of the four states that were most committed to integration: Poland, Hungary, Czechoslovakia and East Germany. Yet, in reality, Romania was steering away from autarky in the 1960s and 1970s at least as fast as were the other four economies. The critical difference was that its tendency, to a substantially greater extent than theirs, was towards closer trade relations with the West. From being one of the most Comecon-oriented economies in the early 1950s, Romania rapidly became the pioneer of integration with the world market. In 1972 it joined the IMF, and by 1980 its trade with other Comecon countries was, proportionally, considerably lower than that of any other member state. Romania’s behaviour was later to be replicated by its allies, all of which began to prioritize dealings with the ‘non-socialist abroad’ over those with Comecon partners. Increasingly the aim was to gain advantageous positions within Comecon’s geoeconomic enclave in order to boost exports to the world market. Soviet-bloc firms sought to import as much as possible from within the area, and maximize exports to ‘hard’ markets. Trade links and other ties to Western economies tended to encourage the flouting of Comecon agreements and amplified intra-Comecon rivalries. The basis for Comecon integration was steadily undermined as competition for Western markets, loans, and investment infiltrated the supposedly cooperative relations between Soviet-type economies. Each jostled for position over trade and good relations with the ‘non-socialist abroad,’ as manifested for example in the bilateral trade deals struck between the European Community and Hungary, Poland and the USSR. At bottom, the contradiction that most hindered Comecon integration was not that between autarky and integration, but between integration with the East and with the world market. Romania was not simply driven by a ‘pull to autarky’; if anything its behaviour gave a foretaste of the ‘pull to the West’ that was later to dominate Soviet economies’ external relations. Underlying its reluctance to join hands with its allies was an additional factor: relative backwardness. Comecon integration, Romanian officials argued, was championed by its industrialized members for their own purposes. They had everything to gain by obstructing the development of high-tech industries in the more backward countries and encouraging them instead to specialize in supplying them with raw materials and intermediate goods. East Berlin’s championing of internationalization in fact expressed ‘national egotism.’


205

For, thanks to its ‘advanced technological capacity within the eastern bloc,’ as Raymond Stokes has put it (2000: 134), ‘the country stood to gain from agreements to specialize, since it was likely to benefit from export of high-value-added machinery and equipment to its socialist neighbors.’ Given the stark economic divisions and political power differentials within the Comecon region, a relatively equitable integration of Comecon along the lines experienced in Western Europe was never a realistic proposition. Intra-élite Tensions As national autarky and the Soviet-bloc cohesion began to give way to an orientation to external markets, ideas of a socialist market economy and political pluralism gained ground throughout the region. Unlike Hungary, East Germany did not experience open intra-élite divisions. But it did experience the same underlying problems. For the economy of the GDR, as for Hungary and Poland, the 1980s was a lost decade, marked by decreasing competitiveness and an unsustainable debt burden. In East Berlin, as in Warsaw and Budapest, élites were torn between commitments to existing structures of accumulation, ideologies, and international alliances, and an imperative to economic restructuring and revitalized engagement with Western businesses and states. Increasingly, competition with the West was augmented by cooperation. Autarky was abandoned. Détente, and expanding trade relations, encouraged a proliferation of collaborative ventures and associated political negotiations that helped to modify perceptions of the West. Over the course of the 1980s, acute tensions developed over international economic policy. Some sections of the élite banked on furthering détente and cooperation with Western firms and states. This strategy, they were well aware, was potentially dangerous. In the archives of the old regime one finds repeated warnings that that Bonn’s support for economic cooperation ‘is a plank in the FRG’s strategy of achieving reunification’. Such fears, however, were taken much more seriously by the opposed group, for whom the emphasis was ‘communist internationalism’, understood as reaffirming East Germany’s orientation to Comecon and the Warsaw Pact. They too perceived the need to pursue economic integration, but held that this should occur above all within Comecon. In the late 1980s these divisions were exacerbated by renewed economic difficulties that demanded urgent action. With East Germany’s balance of trade declining precipitously, new policies were sought. Some functionaries advocated expediting direct cooperation with Western businesses. Without support from West Germany, the head of economic planning Gerhard Schürer warned, the GDR would ‘be unable to find anyone else to take twenty billion dollars of debts off our hands’ (Schürer 1992: 142). Others were aghast at the dependency upon Bonn to which this path would lead: it would turn the GDR into an ‘object of exploitation’ for West German business. A second economic policy debate turned on reductions in state expenditure. With powerful claims – from workers, enterprise managers, and from international banks for debt servicing – for diminishing revenues, SED leaders looked to slash spending.


206

In 1988, Schürer proposed that consumer goods subsidies, the microelectronics industry and the security forces were suitable candidates for cuts. However, powerful constituencies backed the status quo in each of these areas, and Schürer’s suggestions were for the most part rejected (Roesler 1993: 569). Later the same year the politburo did agree to reduce the budget for consumer subsidies and for the security services. Although a relatively moderate measure it nonetheless led, for the first time in the Honecker era, to open resistance from government ministers, seven of whom refused to accept the decision (Hertle 1996: 72). Tensions over economic policy were overlaid by the challenge posed by ‘new thinking’ in the USSR. Moscow’s reforms undermined the confidence of official East Germany. For many, Gorbachev came to symbolize an untrustworthy ally and a worrying decline in Soviet power, while for others he represented resolution and initiative, qualities that the domestic leadership blatantly lacked. Throughout the apparatuses of power there was considerable sympathy for glasnost and perestroika. Interviews with SED functionaries and Stasi officers reveal that criticisms of the leadership were widely held, if rarely articulated.4 Neither the defenders of orthodoxy nor the reformers possessed clear ideas as to how to extricate the country from economic decline. From the mid-1980s, politburo member Siegfried Lorenz recalls (Schütt 1992: 148–154), ‘there was no doubt that fundamental changes and reforms were necessary in the GDR. There was much discussion about this … . And yet at the end of the day we just kept our mouths shut. Ultimately, we had no plausible and comprehensive alternative.’ This was no cohesive, ideologically-fired élite. On the contrary, policymakers were losing faith. By the late 1980s a survey of security élites revealed that only about half found Marxist-Leninist ideology credible (Thompson 2004: 76). Behind the façade of unity, profound policy disagreements existed, divisions that were to manifest themselves in 1989. ‘The Edifice of Rule Starts to Crumble’ The series of sensational reforms in Hungary and Poland in early 1989 were described by an incensed Erich Honecker as ‘the visibly accelerating erosion of socialist power, achievements, and values’ (Hertle 1996: 92). The SED leadership behaved as if stunned. Outwardly, East Berlin maintained a stiff silence, punctuated by declamations of the unity of the socialist bloc. Those in charge held faster to the certainties that had underpinned their survival thus far. The crisis intensified in the summer, with the westward emigration of East German citizens. Hemmed in by Soviet ambivalence, Hungarian ‘treachery’, and by the GDR’s reliance upon international banks and upon Bonn, the SED leadership was ill equipped to respond. Diplomatic representations to Budapest were fruitless, revealing the East Berlin regime’s impotence to the populace and the world. As morale declined amongst the SED’s supporters, citizens began to organize. In the first months of 1989 a rash of small protests attested to rising confidence of the 4

Interviews with Michael Brie, Helmut Meier, Rolf Richter, Berlin, 1994.


207

‘grassroots’ opposition groups. By late August at least 17 initiatives existed which aspired to establish an independent oppositional presence. Of these, New Forum made the greatest impact. Within fourteen days of its formation some five thousand had signed its list of supporters. The uprising itself began in Leipzig, when street demonstrations of would-be emigrants were joined by ‘here-stayers’ calling for reform. The regime was determined to crush the movement but buckled. A number of factors explain its failure, including the number and determination of demonstrators and Moscow’s refusal to commit troops, but also divisions within the SED leadership and the willingness of senior police officers and middle-level officials to negotiate with protestors. The continued growth of demonstrations revealed the exhaustion of a strategy based upon police methods and weakened its authors, notably Honecker himself. With Gorbachev’s tacit approval, members of the Central Committee and Politburo plotted his removal, which they secured in mid October. The new SED leader, Egon Krenz was a cautious and conservative figure, and his administration could hardly be described as reformist. However, in his inaugural speech he did promise that the regime ‘will introduce a Wende [turnaround], with immediate effect’. The Wende involved the renunciation of armed force in favour of conspiratorial techniques of counter-subversion, coupled with some immediate concessions and promises of significant reform. These measures, it was hoped, would boost the new government’s credibility, and enable the demonstration movement to be contained. Whereas repression had provoked protest, SED leaders believed, concessions would appease it. They assumed that several months breathing space would be gained in which to retrench and restructure. The Wende was designed as a holding operation, providing a framework within which the nomenklatura could begin to restructure itself in an orderly fashion. But these hopes were to prove illusory. The Wende reforms failed to dampen the popular movement. To the contrary, the numbers filling the streets and squares climbed exponentially. In this potted summary of the early stages of the revolution, some divergence from the assessments outlined in the first section of this article may be seen. The GDR was not as autarkic as Batt maintains. Regime unity was more fragile, and the opposition more organized, than Friedheim suggests. But these differences are of emphasis only. They modify rather than challenge the image of a unified, intransigent ruling élite, poorly equipped to adapt to changing circumstances, unprepared for negotiation, and facing an unfolding crisis in which the drive for change came from below. As regards subsequent events, however, my interpretation deviates substantially from those of Batt, Friedheim and Fulbrook too. In the following, it will be argued that East Germany in 1989 does not readily fit into the ‘rupture / collapse’ model of transition. The opposition movement of the late 1980s in East Germany was somewhat stronger, and the SED more divided, than commonly supposed. SED leaders proved capable of learning, and they did instigate radical reforms. Reformist leaders such as Hans Modrow embraced parliamentary democracy under duress, but their revised attitudes to democracy and the market were not simply a product of adaptation to changing circumstances. The ground had been prepared in the 1980s, with the erosion of élite beliefs in ‘Marxist-Leninism’. Although negotiation was not as central to the transition process as in Poland or Hungary, pact making involving

208


regime and opposition did occur, at the Round Table. In the same period (winter 1989-90), the established ‘bloc’ parties disengaged from the SED, helping to create a pluralist political landscape, before merging with their West German counterparts. Power was not surrendered to protestors on to the streets, but was passed to reformists, most of whom had occupied senior positions in the old regime. Generally, the East German élite did not lose the ‘will to rule’. As elsewhere in Central and Eastern Europe, existing élites by and large adapted to new circumstances. Economic leaders (such as Kombinat General Directors) repositioned themselves, hoping to emerge from the transition as managers or even owners of private companies; police chiefs, army officers and state officials strove to remain at their posts; even SED functionaries hoped to remain influential players, in a competitive party field alongside their erstwhile allies of the ‘bloc parties’ and citizens’ movement groups. Although German unification, and the determination of West Germany’s rulers to impose its structures on the East, ensured that East Germany did not experience what Adam Michnik (in Nagle and Mahr 1999: 202-3) has called the ‘velvet restoration’ of old élites that was experienced elsewhere in Eastern Europe, in the first year following the uprising these hopes were realized to a significant degree. Not only was the Modrow administration committed to minimising élite replacement, so too was its CDU-led successor. It is therefore one-sided to describe the end of the SED regime under the rubric ‘collapse’. Rather, it wound down its affairs and restructured – and it was assisted in this, albeit with reluctance, by the citizens’ movement. As a transition to democracy, this was closer to the ‘extrication’ model than to that of ‘collapse’. Polish Lessons Faced by mounting popular pressure, most of the East German élite chose not to raise the white flag but to adapt to the changing circumstances. They showed an ability to learn, notably that certain strategies, notably Honecker’s attempt to clamp down on dissent and the Wende project of appeasing protest with sops, were futile or counter-productive. They were also keen to learn from the experiences of their counterparts elsewhere. After Honecker’s downfall, Poland entered the frame as a ‘reference state’ – defined by Nancy Bermeo (1992: 283) as a polity that, by virtue of ‘geographic proximity, cultural similarity, shared history, or some combination of the three’, serves as a point of comparison for policymakers elsewhere. From the vantage point of the Polish Communist party (PZPR), it was engaged not in a project of maintaining existing institutions but of restructuring such that core goals could be advanced and élite replacement minimized. In general terms, the aim was to restructure élite organization from a centralized nomenklatura model to a Western-style formation. The dismantling of the nomenklatura system had begun with a Round Table agreement that had originally been envisaged ‘as initiating a four-year transition period towards full democracy, pluralism and marketization under conditions of general, if loose, Communist domination during which the PZPR would learn how to maintain its rule through competitive methods’ (Sanford 1997: 178). The Communists’ plans began to unravel when the PZPR was trounced


209

in national elections in June 1989. However, while the new government was headed by a Solidarność advisor, Tadeusz Mazowiecki, Communists retained control of the Interior and Defence ministries and the government operated through existing Communist institutions, as modified by the Round Table. It was at this juncture that Egon Krenz journeyed to Warsaw to seek advice from his Polish comrades. One of these, General Jaruzelski, reassured his guest that he didn’t find liberal democracy to be the evil that they had once assumed, and that democratic reform did not threaten the nomenklatura’s core commitments to capital accumulation, social control and political stability. Just as, in the USSR, glasnost was vital to winning allies to the cause of perestroika, so, in Poland, democracy could prove an indispensable means of selling austerity to a sceptical public. Nor did democratization equate to capitulation. ‘We have, of course, transferred the enterprise’, the General continued, drawing a telling analogy between the Communist élite and company directors, ‘but have secured for ourselves a controlling stake, in the shape of participation in the government, security forces and army, and the office of president.’ Of greater significance than these tools of control, however, was the degree to which old regime and opposition élites could find common ground. ‘In respect of cooperation within the coalition, it is the shared position with regard to the interests of state that is central. Here, I find myself on the same terrain as Prime Minister Masowiecki’ (Krenz 1999: 207). In Poland at the time, nomenklatura privatization was already well under way, and although Jaruzelski did not yet know it, was destined to be successful for much of the old élite. Entrenched antagonism between Communist Party and opposition began to give way to a fragmented system, in which Solidarność factions in the Sejm were later to make common cause with the Communist successor party (Social Democracy of the Republic of Poland) on a variety of issues, including electoral law. Krenz did not return from Poland fully convinced of the need to follow Jaruzelski’s advice. Yet he could not ignore the parallels. Like Poland in the 1980s, his country was in the throes of economic crisis, a major reform initiative (the Wende) had failed to restore regime legitimacy, and the prime obstacle to future, SED-led, reform was dwindling public trust. If Krenz’s ostensibly reformist administration was to retain any credibility, major concessions would be inescapable. As in Poland, the only viable course seemed to be democratization, and nomenklatura privatization. By early November, the more far-sighted SED leaders were becoming convinced that, whatever the end goal, the impending transition could not but involve a conciliatory approach to the citizens’ movement organizations. The Central Committee was advised by Lorenz that, ‘a situation has arisen whereby we must approach certain representatives of ‘New Forum’ in a constructive way, particularly those who seek to prevent chaos – those who show clearly, and in public, a willingness to exert a calming influence’ (Hertle 1997: 199). At the same gathering, another Party notable also declared that negotiations with the citizens’ movement would be necessary, and sweetened the pill for sceptical sections of the audience with the counter-intuitive argument that this would in fact provide the best means of ‘demonstrating, in practice, our power and our leading position’ (Hertle 1997: 336). In the same period, major reforms were announced, measures that would inexorably undermine the SED’s power monopoly, including greater independence

210


for the ‘bloc parties’, the media, and parliament, the dissociation of Party and State, and permission for citizens to travel freely to the ‘non-socialist abroad’. In brief, the fall of the Wall was not quite such a sharp watershed as some historians have suggested, for far-reaching reforms had been initiated already in preceding weeks; indeed, such reforms – of travel rights – precipitated that event. ‘We Are Not Deserters!’ The breaching of the Wall was unquestionably a demoralising experience for its guardians. In the aftermath, the regime was subjected to a lengthy period of intense and unremitting pressure from the street movement, and from its own base, and began to disintegrate. ‘Pressure is bearing upon us from all sides’, Egon Krenz confided to his diary, ‘Pressure from ‘below’ and pressure from ‘without’: The street demonstrations, the demoralization of the Party, the break-up of the socialist fraternity, the rise of anti-socialist forces, the anti-GDR policies of Bonn, all this influences the situation’ (Krenz 1999: 305). The exigency of stemming legitimacy decline led to an accelerated turnover of personnel in the apparatuses of power. The collective resignations of Politburo and government, already on November 7, were followed by that of the Stasi leadership. The SED continued to haemorrhage, losing hundreds of thousands of members in a matter of weeks. In the security forces the picture was likewise one of disintegration. Police officers joined street demonstrations. In the army, officers were presented by soldiers with the alternative of acceding to demands for reform or facing mass desertions. Even the Stasi was not immune to tendencies of decay. These manifestations of disintegration eroded the effectiveness of the apparatuses of power and generated an atmosphere of impending collapse – one which thickened when old-regime institutions accelerated the destruction of files. But these institutions did not in fact ‘dissolve’, and neither did the ‘will to rule’. The breaching of the Wall demoralized the élite, yet its commitment to retaining control of the transition process remained intact. Initially, it was hoped that new travel freedoms and personnel turnover would deflate the protest movement, rewarding the regime with a breathing space in which to broaden its power base and restructure. Although less taut and increasingly frayed, the reins of power remained in the hands of the SED leadership, passing via Krenz to Hans Modrow. It was widely believed in SED circles that, if further reforms were made and the citizens’ movement courted, the march route could be pulled back onto the tracks of ‘passive revolution’ (or ‘transition through extrication’), characterized by limited popular involvement and gradual institutional and personnel change. In this, SED leaders were encouraged by auspicious signals from Moscow. In November, Foreign Minister Edward Sheverdnadse indicated that the USSR would continue to guarantee East Germany’s sovereignty. Gorbachev, when addressing East European leaders at the Kremlin in early December, conceded that their task was a difficult one but enjoined them to retain command: ‘We’re no longer in a situation of finding solutions; rather, the task is simply to control the wagon and keep a grip of the reins’ (Krenz 1999: 348). For the most part, East German functionaries


211

identified with this spirit; they came to redefine their role, in the words of one SED leader, as guardians of ‘an orderly transition to a new society’ (Zimmermann and Schütt 1992: 229). The reforms implemented by Hans Modrow’s new government in the month that followed the Wall’s fall transformed the polity, and to the extent that they were entered upon hastily, as a last-ditch response to the ongoing exodus and protests, metaphors of discontinuity (such as ‘collapse’) are warranted. Yet elements of continuity were present in equal measure. The regime resembled a vessel which, although badly holed and possibly sinking, remained afloat and largely responsive to the actions of the crew, most of whom remained at their stations. One should resist the temptation of allowing the noisy splashes of change, as captain and first mate were thrown overboard, to drown out the underlying hum of continuity. Modrow himself was undoubtedly committed to reform but his face was hardly new. His government was dominated by the SED, and although only a third of its ministers had served in the previous administration the remainder were promoted from within the middle and upper ranks of old-regime institutions. The new government instigated a radical reform course. The apex of power shifted from SED General Secretary to Prime Minister, and the Council of Ministers was freed from its subordination to the Politburo. Significant steps were taken towards more transparent and democratic governance. The political process was democratized, as symbolized by the appointment of a commission to investigate functionaries’ privileges and corruption, and by the Attorney General’s initiation of proceedings against members of the security forces accused of abuses against demonstrators. The SED retreated from its role as ligature of the arteries of power and adopted instead the structure of a western-style political party. On December 1 its ‘lead role’ was struck from the constitution and the National Front was dismantled, formalising the independent status of the formerly SED-loyal ‘bloc parties’- Christian Democrat Union (CDU), National Democratic Party (NDPD), and LDPD. In the economic sphere, too, far-reaching change was in the air. Already before the fall of the Wall SED leaders had propounded radical economic reform, and thereafter the only serious debates (if the question of German unification is set aside) concerned the tempo of change and whether some loosely defined Third Way of ‘market socialism’, as propounded by the SED, or privatized market capitalism, should be the goal. Private property rights were expanded. Prices were oriented to world market levels, and cooperation between Kombinate and western firms was expedited. Seeing that the wind was turning, thousands of loyal supporters of the old regime began to abandon Communism, command economy, Moscow and all, to become more or less devout supporters of market capitalism. The embrace of economic and political liberalization affected all sectors of the élite but was most pronounced amongst senior members of the bloc parties, individuals who had been faithful servants of the old order and had benefited from the sinecures that such positions brought but who could more readily divest themselves from associations with Communism. A representative example was CDU leader Lothar de Maizière who, in November, was able to describe socialism as ‘one of humanity’s most beautiful visions’ yet, only months later, presided over his party’s election campaign that treated the socialist values of rival parties, including the SPD, with vitriol (Teltschik


212

1991: 38). The ease with which so many functionaries appeared to discover that socialism had been flawed all along and that market capitalism and parliamentary democracy represented a desirable alternative was striking, and a popular epithet was coined to describe the spectacle. ‘Wrynecks’ they were called, after the bird that can effortlessly swivel its head 180 degrees.5 General Strike or Round Table Simultaneously with the restructuring of institutions and economy, the new administration under Modrow also stepped up its engagement with the citizens’ movement. Against a background of radicalizing protests, enlisting the aid of moderates seemed the only way of restoring stability and helping the regime to regain a modicum of credibility. It is commonly supposed that, as bargaining power shifted from the SED to opposition forces, political initiative and actual power automatically followed (see for example Welsh 1994: 394-7). However, it would be more accurate to say that, as their bargaining power lessened, the old regime parties managed, with more than a little success, to maintain the initiative, and political power. Consider, by way of introduction to this argument, a strategy discussion involving Modrow and Wolfgang Schwanitz, at a meeting held at the latter’s inauguration as chief of the secret police.6 ‘The GDR’s situation is considerably more serious and much more difficult and complicated than it appears from outside,’ Modrow lamented, referring to the economic crisis and the unceasing exodus. As to the protest movement, no amount of concessions seemed able to placate it. Schwanitz also warned of the danger of instability. ‘Time is pressing, like a hand on our throats’ he said, ‘we must get this pressure off us. … our power is at stake, we should have no illusions about that.’ The two agreed that the top priority was to win back public trust. ‘The game that we should play’ with the ‘friendlier’ sections of the movement (the citizens’ movement organizations), Modrow proposed, is to draw them into cooperation with established institutions. Offer them a morsel of power, above all, at local-level ‘round tables’. Then, when their representatives are shouldering a portion of responsibility and carrying the can for unpopular decisions, their allegiance to the state will be cemented even while the key centres of authority remain untouched. Modrow and Schwanitz’s intentions were clear, but their realization depended upon an unknown factor: the reaction of the citizens’ movement. On the very day of Schwanitz’s inauguration, the outlines of its response began to take shape, in the form of an appeal by Democracy Now for ‘democratic parties’ to begin negotiations at a national ‘Round Table’. Hardly had the appeal been announced than it was taken up positively by parties of the old regime. For them, Dieter Rucht has written, ‘the Table was an unwillingly accepted but necessary means to retain power by a strategy of cooptation’ (Rucht 1996: 41). It helped them to regain the initiative at a time when the citizens’ movement was still finding its bearings following the fall of the Wall.

5 6

The German word, Wendehals, puns on ‘Wende’. The full document is archived in BStU, ZA (ZAIG 4886).


213

The emerging rapprochement between regime and citizens’ movement was put to the test in early December, a turbulent period marked by protest radicalization. Prisons erupted in revolt, with inmates demanding an amnesty, reform of the criminal code, improved conditions, and participation in prison decision-making. The movement began to enter the workplaces too. In the South, a wave of industrial action occurred, affecting a hundred workplaces and tens of thousands of workers. It crested on December 6, with a general strike call from Karl-Marx-Stadt New Forum, and strikes in several towns, including a general strike in Plauen. For New Forum, this was the first of two defining moments. Its leadership was aware that the opportunity existed for the SED regime to be swept from office. ‘Power to New Forum!’ was a popular slogan on demonstrations. Delegations from several major factories approached New Forum bearing the message ‘We’re prepared to strike; just give us the signal.’7 On the other hand, New Forum had already committed itself to inter-élite negotiation at the Round Table, and this depended upon a spirit of compromise with the regime that would be negated by support for mass action. Its leaders had to decide which way to jump: Round Table or general strike, negotiation or ‘ruptura’. After a somewhat confused debate they opted for the former, and took their seats at the Table, the declared aim of which was to seek ways ‘to overcome the crisis’ (Lohmar 1995: 66). The second defining moment occurred a month later. In the intervening period the regime had retrenched. In late December the promised disbanding of the secret police had been postponed until the following summer. At the Round Table, government representatives prevaricated, particularly with regard to dissolving the Stasi. In this context, and against a backdrop of economic breakdown and mass emigration, opposition leaders demanded that the government resume progress on Stasi reform. If not, they warned, up to a million workers in the South were prepared to take political strike action. Indeed, a strike wave was already underway, across the country, with a variety of economic and political aims, including expedited democratization and Stasi dissolution. Yet again, citizens’ movement leaders faced a dilemma. The opportunity to push for rapid democratization was apparent. Yet, as in December, the fear that continued popular action would lead to chaos weighed heavy. Regime spokespeople such as SED-PDS leader Gregor Gysi appealed to these fears, urging movement leaders to ‘join with the SED-PDS in appealing for calm’ (Neues Deutschland, 18 January 1990). As in early December, the movement was at a crossroads. ‘Had the civic movement been prepared to more fully exploit the situation’, Steven Pfaff (1999: 425) observes, ‘it is likely that the Modrow government could have been compelled to take much more radical steps or have collapsed completely. Of course, this is precisely what the civic movements feared – a popular upsurge they could not fully control.’ What did result from this, the popular movement’s final upsurge, was a strategic shift on the part of government. From mid-January onwards it became markedly more cooperative towards the opposition. At the Round Table, the SED collaborated with the new forces on drafting a constitution for a democratic GDR and, in February, 7

New Forum spokesperson Klaus Wolfram, interviewed in Berlin, January 1995.

214


opposition members were invited into a Government of National Responsibility. However, the more significant phenomenon of the time was not the co-optation of new forces but cooperation between the established parties of Germanies East and West. In February, the West German CDU formed an alliance with its namesake in the East – alongside a small citizens’ movement group, Democratic Awakening and, later on, another bloc party, the German Farmers Party (DBD) – while the western Free Democrats (FDP) hitched up with the two remaining bloc parties, the LDPD and the National Democratic Party (NDPD). Following elections in March, these parties, alongside the SPD, formed the GDR’s final government, a caretaker administration that ruled until October when the GDR ceased to exist. Although some ministries were occupied by former oppositionists, this was no government of ‘new forces’. Rather, it was dominated by former functionaries from the middle and upper layers of the bloc parties, typified by the new premier, Lothar de Maizière, who had been a senior figure in the (eastern) CDU since 1987. ‘All the three major players with whom Kohl formed the Alliance for Germany,’ Dirk Philipsen has pointed out, ‘namely the General Secretary of the CDU, Martin Kirchner, the chairman of the CDU and later Prime Minister, Lothar de Maizière, and the chairman of Democratic Awakening, Wolfgang Schnur, had for many years served as Stasi informants’ (Philipsen 1993: 337). Both Kohl himself and his government, Philipsen adds, ‘possessed conclusive evidence of this fact at the time.’ Nomenklatura Privatization The story of Eastern Europe’s transition is one of a learning process, in which functionaries came to see that although democratization would spell the collapse of the nomenklatura system, it need not spell the demise of their class’s power. Communism itself was dispensable; and functionaries generally paid obeisance to Marxism not as a guide to, but as sanctification of, their Party’s practice. For company managers, state officials and a range of other élite groups, their allegiance to the Party was a particular form of organising their loyalty to, and identification with, the national ruling class. Industrialists, Chris Harman points out (1990), did not care too much about ideology, providing they could run their enterprises successfully, accumulating capital to protect their very substantial privileges. They would hold party cards because party membership helped them to succeed – and because the party helped stamp out dissent among the workforce. But they did not take the party’s avowed beliefs seriously. This style of ‘pragmatic’ Communism was also pervasive in the state apparatuses, and even amongst Party cadre. Soviet-type institutions were given support in so far as they provided a viable framework for the achievement of economic growth and social control, but could be discarded without undue fuss when these conditions no longer obtained. This accounts for the ‘Wryneck’ phenomenon – the easy abandonment by Eastern European élites of what had appeared to be deeply held beliefs. As Harman has argued (1990: 66), in a comparison between the transitions in Eastern Europe and regime changes of earlier times, a ruling party and a ruling class are never quite the same thing. The former represents the latter, ‘binding its


215

members together in a common discipline which helps them achieve their common goals against the rest of society. But the class can preserve the real source of its power and privileges, its control over the means of production, even when the party falls apart. This was shown in Germany, Italy, Portugal and Spain after the fall of their fascisms.’ In the post-fascist cases, the unitary party that bound industrialists, landowners, police chiefs, army officers and government ministers into a tight network disintegrated, but, a measure of élite replacement and reforms to corporate ownership notwithstanding, was replaced in each instance by a pluralist political system that preserved the class divisions upon which capitalist order rests. In Eastern Europe, changes to ownership structures were greater, but here too, ‘the enterprise heads, the ministry officials, the generals, even most of the police chiefs, remain[ed] in place’. They did not abdicate but sought positions in new or reformed institutions, establishing new political parties and creating new structures of accumulation. Harman’s study, published in 1990, was prescient. As the years have passed, evidence has accumulated that shows high rates of élite continuity in Eastern Europe. In 1996, a concise summary was published by John Higley, Judith Kullberg and Jan Pakulski. During and after the transitions of 1989-91, they conclude (1996: 137), ‘communist leaders scrambled to protect their power bases or to create new ones. Their maneuvers were varied. Some negotiated places for themselves in postcommunist regimes through the famous “roundtable talks.” Many cashed in the credits they had accumulated through patron-client networks and appropriated large parts of stateindustrial enterprises (“nomenklatura privatization”); still others colluded in “mafia” activities to profit from weakened state oversight and regulation.’ Democracy, they added, did not constitute a major threat to established élites in the region: ‘Instead of having to fight tooth and nail to defend their power and status, most élites associated with the old order have adapted to democratization without major loss. … nothing approaching a ‘revolutionary’ circulation of élites occurred; in this key respect there were no Central and East European revolutions in 1989-91.’ In a monograph published the same year, Klaus von Beyme made the case that in contrast to democratic transitions from right-wing authoritarian dictatorships, ‘[t]here was no fundamental turnover of élites’ in Eastern Europe’ (von Beyme 1996: 67-8). In no former wave of democratization, he continues, ‘were the reformed forces of the old regime able to make a come-back so quickly as in Eastern Europe’. Perhaps the most notorious case is Russia, where the private sector is dominated by former Soviet monopolies seized by ex-Communist officials who have become the core of a semi-criminalized business class. This ‘new’ capitalist class is so extraordinarily intertwined with the state that Russia’s post-transition economic system is described by the Financial Times as ‘a corporate state, … a new form of state capitalism’ and by one prominent liberal politician, Grigory Yavlinsky, as ‘a 100 per cent merger between business and the authorities’ (Financial Times, 19 June 2006; The Economist, 25 June 2005; see also Cohen 2000: 142). In East Germany, the alchemy that saw a portion of the ‘old’ bureaucratic power transmuted into investments in the embryonic new Germany was an important aspect of the transition period. The process began towards the end of 1989 and continued apace in 1990 under the coalition government of Lothar de Maizière. Under Modrow,

216


the liberalization of land and property markets enabled thousands of functionaries to exploit the resultant opportunities, buying up land and scooping luxury properties at bargain basement prices. Those in positions of economic authority, and with appropriate connections and knowledge, were able to siphon ‘people’s own’ funds into their newly-established firms or bank accounts, transferring large sums with a few strokes of the pen. Loopholes in the State Treaty (which unified the currencies of the two Germanies) enabled functionaries to convert colossal sums of GDR Marks and ‘transfer roubles’ into Deutschmarks at parity, by illicit methods. In such ways, Martin Flug has described (1992: 26), thousands of members of the old regime, including the ‘dissolved’ Stasi, became German unification’s victors, through the back door.’ As the ‘communist’ élites filed across their hastily constructed bridge to capitalist democracy, two striking phenomenas could be observed. One was the readiness with which most of them shed the ideological commitments and trappings of their previous calling. Senior army officers, to give an example that stands for many, happily exchanged the title ‘Genosse’ [comrade] for ‘Herr.’ Managers resigned their SED membership in droves, and actively sought partnership with the western ‘enemy’. The second phenomenon of note was that although, unlike elsewhere in Eastern Europe, the transition necessitated the sacrifice of many of those most implicated with the old regime, this process took place much more gradually than is usually thought. In mid-1991, élite replacement had been minimal. In the economy, 70–80 per cent of directors and managers of the Kombinate had been managers before 1989. In politics, it was largely middle and lower officials who were able to remain active; hundreds of the bloc parties’ elected representatives in the new Germany had been activists or functionaries in the old GDR. In the army, the vast majority of senior officers were retained, albeit at one rank beneath their existing station. As to the administrative élite, some took the opportunity of early retirement while others engineered their transfer to offices with greater prospects. In the legal élite, 78 of 1,300 judges were forced to resign by June 1990, but the remainder were allowed to ‘cleanse’ their files of incriminating documents pending re-election. In the long run, of course, German unification led to far greater élite replacement in the former GDR than elsewhere in Eastern Europe. Indeed, for this very reason the threat of unification had haunted SED leaders throughout the transition period. For them, it sharply exacerbated the dilemmas of liberalization. When, for example, Krenz had listened to General Jaruzelski’s cheerful descriptions of the ‘shared position with regard to the interests of state’ between Communist Party and Solidarność leaders, the East German leader had found little comfort. The question ‘But what are the interests of state?’ nagged at him. It highlighted the distinction between his precarious situation and the General’s. ‘However great the extent of reforms in Poland, the state remains Poland’, he wrote in his diary (Krenz 1999: 207); ‘But what if the SED loses? Without it the GDR would not exist. … There would be no raison d‘être for two capitalist German states. The GDR‘s existence as a German state depends upon its socialist nature.’


217

Epilogue: German Unification and the European Union Although the focus of this chapter has been upon domestic developments within the GDR, the end of the Cold War and German unification were to have far-reaching effects on the European Union. With the fall of the Berlin Wall and the withdrawal of Soviet troops from Eastern Europe, the threat that had helped to bring the EU’s founder members together was, at a stroke, removed. This posed, more starkly than ever, the question of a common European security system. It raised the possibility of the eastwards expansion of the EU, and it altered the elaborate internal balance of relations between the EU’s larger member states. To begin with the last of these, the EU had originally developed around a strong and equal France-Germany partnership, with France exercising a political and military lead, and Germany economically dominant. Two other similar sized states, Britain, Italy, provided the other legs of the main table, so to speak. With German unification, one of those four ‘legs’ suddenly became far larger, by population, territory and, albeit to a lesser extent, GDP. Germany was now fully sovereign, and its geostrategic situation changed too: from its previous frontline position, it now came to occupy a pivotal position with European trading networks, and became the largest trading partner with all Central European states. This marked a major expansion of influence for the FRG, one that for long had perforce been advanced only subtly, through Ostpolitik. Moreover, whereas in the 1980’s two of the three EU accession states had been culturally and geographically close to France, in the 1990s the enlargement zone was in more German-influenced regions. In the early 1990s, Germany’s stabilising role with the EU seemed to vanish, and in some respects it became a disruptive factor. Economically, Germany experienced a unification-induced boom which, due to the enormous transfer expenses involved, caused interest rates to soar. Due to the Deutschmark’s centrality in the European Monetary System the rest of the European Union was forced to raise interest rates, even though economic conditions were unlike those obtaining in Germany. The upshot was a series of foreign exchange crises, culminating in the expulsion of Britain and Italy from the European Exchange-rate Mechanism. Ideologically, Germany experienced a period of heightened nationalism. Its foreign policy stance, in addition, grew more assertive, with minesweepers and troops despatched to the Persian Gulf, Iran, Cambodia, and Somalia, and the Luftwaffe to Serbia. United Germany was no longer so willing to defer to French political leadership; it now sought a political role commensurate with its economic strength. Superficially, these developments seemed at the time to presage a new German arrogance, one that could spell long-term difficulties for the European Union. In fact, Bonn was careful to embed its new assertiveness within a renewed commitment to the EU. In the years in which unification was being implemented, a period of rising nationalism, fascist movements, and a widespread uncertainty as to Germany’s new role and intentions, Chancellor Helmut Kohl was ever keen to insist that his goal of rapid unification would occur in tandem with a firmer embedding of Germany within the EU. France, and other member states, grasped the opportunity, and pressed for further political integration – notably by expediting a common security and foreign policy – and further economic integration, in the form of currency union.

218


References Batt, Judy (1991). ‘The End of Communist Rule in East-Central Europe’. Government and Opposition, 26: 3. Bermeo, Nancy (1992). ‘Democracy and the Lessons of Dictatorship’. Comparative Politics, 24: 3. ― (1997). ‘Myths of Moderation: Confrontation and Conflict during Democratic Transitions’. Comparative Politics, 29: 3. Cohen, Stephen (2000). Failed Crusade; America and the Tragedy of PostCommunist Russia. New York: W. W. Norton. Ekiert, Gregory (1991). ‘Democratization Processes in East Central Europe’. British Journal of Political Science, 21. Flug, Martin (1992). Treuhand-Poker. Berlin: Links. Friedheim, Daniel (1993). ‘Bringing Society Back into Democratic Transition Theory after 1989’. East European Politics and Societies, 7: 3. Fulbrook, Mary (1995). Anatomy of a Dictatorship. Oxford: Oxford University Press. Harman, Chris (1990). ‘The Storm Breaks’. International Socialism, second series, 46. Hertle, Hans-Hermann (1996). Der Fall der Mauer. Opladen: Westdeutscher Verlag. Hertle, Hans-Hermann and Stephan, Gerd-Rüdiger (eds.) (1997). Das Ende der SED. Berlin: Links. Higley, John, J. Kullberg and J. Pakulski (1996). ‘The Persistence of Communist Élites’. Journal of Democracy, 7: 2. Ishiyama, John (1995). ‘Communist Parties in Transition’. Comparative Politics, 27: 1. Klenke, Olaf (2001). Ist die DDR an der Globalisierung gescheitert? Frankfurt/ Main: Peter Lang. Krenz, Egon (1999). Herbst ’89. Berlin: Neues Leben. Lavigne, Marie (1991). International Political Economy and Socialism. Cambridge: Cambridge University Press. Mainwaring, Scott (1992). ‘Transitions to Democracy and Democratic Consolidation’. In Scott Mainwaring, Guillermo O’Donnell and J. Samuel Valenzuela (eds.), Issues in Democratic Consolidation: The New South American Democracies in Comparative Perspective. University of Notre Dame Press. Lohmar, Henry (1995). „Die Entwicklung des Runden Tisches der DDR – eine vertane Chance‘. In Wolfgang Dümcke and Fritz Vilmar (eds.), Kolonialisierung der DDR. Münster: Agenda-Verlag. Maravall, J.M. and J. Santamaria (1986). ‘Political Change in Spain and the Prospects for Democracy’. In Guillermo O’Donnell, Philippe Schmitter, and Laurence Whitehead (eds.), Transitions from Authoritarian Rule: Southern Europe. Baltimore: Johns Hopkins. Nagle John and A. Mahr (1999). Democracy and Democratization: Post-Communist Europe in Comparative Perspective. London: Sage.


219

O’Donnell, Guillermo and P. Schmitter (1986). ‘Tentative Conclusions’. In Guillermo O’Donnell, Philippe Schmitter, and Laurence Whitehead (eds.), Transitions from Authoritarian Rule: Southern Europe. Baltimore: Johns Hopkins. Pfaff, Steven (1999). ‘From Revolution to Reunification: Popular Protests, Social Movements and the Transformation of East Germany’. PhD Thesis, New York University. Philipsen, Dirk (1993). ‘We Were The People’. Durham: Duke University Press. Richter, Michael (2001). Die Staatssicherheit im letzten Jahr der DDR. Köln: Boehlau. Roesler, Jörg (1993). „Der Einfluβ der Auβenwirtschaft auf die Beziehungen DDRBundesrepublik‘. Deutschland Archiv, 5. Rucht, Dieter (1996). ‘German Unification, Democratization, and Social Movements’. Mobilization, 1: 1. Rüddenklau, Wolfgang (1991). Störenfried. Berlin: BasisDruck. Sanford, G. (1997). ‘Communism’s Weakest Link – Democratic Capitalism’s Greatest Challenge: Poland’. In Geoffrey Pridham, Eric Herring and George Sanford (eds.), Building Democracy. Revised edition. London: Leicester University Press. Schürer, Gerhard (1992). ‘Das reale Bild war eben Katastrophal!’ Deutschland Archiv, 10. Stokes, Raymond (2000). Constructing Socialism: Technology and Change in East Germany 1945–1990. Baltimore: John Hopkins. Teltschik, Horst (1991). 329 Tage. Berlin: Siedler Verlag. Thompson, Mark (2004). Democratic Revolutions. London: Routledge. Valenzuela, J. S. (1992). ‘Democratic Consolidation in Post-Transitional Settings’. In Scott Mainwaring, Guillermo O’Donnell and J. Samuel Valenzuela (eds.), Issues in Democratic Consolidation. University of Notre Dame Press. Von Beyme, Klaus (1996). Transition to Democracy in Eastern Europe. Houndmills: Macmillan. Welsh, Helga (1994). ‘Political Transition Processes in Central and Eastern Europe’. Comparative Politics, 26: 4. Zimmermann, Brigitte and H.D. Schütt (eds.) (1992). ohnMacht Berlin: Neues Leben.


PART IV Convergence and Cohesion


Chapter 13

Public Support for the EU and the Regional Level Effect Elna Roig Madorran1

Since 1973, Eurobarometer surveys have tested public opinion of European citizens in relation to political, social and economic issues. These surveys give us some measures of citizens’ support to the European integration process. Working on these surveys, the authors have proposed explicative mechanisms in order to test why citizens in some states or with certain characteristics have stronger pro-European attitudes than others. Research in this field has been divided in two different kinds of methodology and also in the use of two different groups of explanatory variables. So, on the one hand most of the researchers have focused on individual facts in order to explain attitudes towards the European Union, whereas other authors have mainly observed the macropolitical or macro-economic dimensions of this support. On the other hand, usually the reasons for explaining support to the European Union (EU) have been based on ‘costs and benefits’ relations and taking individuals as units of analyses. However, these models are not able to explain more than 10 percent of the variance on support to European integration. More recently some authors have focused on socio-political and cultural approaches using individuals and at the state-level as the main units of analysis but excluding the role of a third level: the regions or sub-national entities. However, this regional level constitutes a particular identity level that is present in certain citizens and which means an intermediate explanatory level between them, the nation-state, and the European Union. This chapter tries to overcome public opinion studies based exclusively on utilitarian or rational choice theories and it proposes two innovations: firstly, it works on European regions as units of analyses and, secondly, it defines what is the influence of regional identity in order to form attitudes towards European Union. States are entities much more heterogeneous than regions or sub-national entities where we can find wider homogeneity in relation to socio-cultural and political issues or economic development. Such a comparative study working on all the European regions, not only will extend our research sample (instead of working on 15 Member 1 This chapter is a brief review of a wider research that will be included on my dissertation and it has been possible thanks to a scholarship from the Basque Government, Educational department. This version benefited from discussions with J.Mª Roig Rosich, I. Sánchez-Cuenca, J. I. Torreblanca, A.Mª Ruiz Jiménez, Michael Keating and Paz Fernández. Mistakes are on my own.

224


States we will analyse 143 European regions) but also it will show that utilitarian theories and the ones based on socio-political issues are not really incompatible when we study support to the European Union. A Brief Literature Review As we have said, it is possible to differentiate between two theoretical approaches in order to understand support to the EU. Utilitarian or economic approaches are based on cost-benefit analyses made by citizens, usually informed, in order to form their attitudes to the European Union. It is remarkable the research made by M. Gabel where he mainly suggests that support to the European Union is higher as higher are the benefits received (Gabel and Palmer 1995; Gabel 1998). Working on several Eurobarometers, Gabel has found a cost-benefit relation to explain support to the EU based on the income, educational level and individual’s skills. In that sense, Gabel understands support to European integration as a mechanism related to temporally or changing factors such as the economic environment. However, if this theory were right, why then citizens in certain economically wealthy regions, which don’t really receive resources from the Structural Funds, sometimes are more pro-European than citizens from regions without so much economic welfare that are considered Objective 1 by the Structural Funds of the European Union. Secondly, we find theories of public support to the European Union based on socio-political factors defended by authors such as I. Sánchez-Cuenca, Martinotti, Inglehart and Anderson. They offer rational explanations, usually based on costbenefit analyses, but using institutional or political variables as the main explanatory factors of Europeanism. In fact, these authors explain support to the European Union based on the political or ‘non-economic’ benefits of taking part in the EU. R. Inglehart, Rabier and Reif (1991) have worked on the effect of cognitive mobilization and they found a positive relation between high political involvement and support to the European Union. This theory has been refuted by Gabel and others when they demonstrate that it just worked on the original member states. Besides, social scientists don’t agree in relation to the mechanisms between satisfaction with the European Union and the political accountability of the citizens. In that sense, Martinotti et al. (1995) argue that satisfaction with nation-states is not a variable that allows us to establish a relation of higher or lower support to the EU. However, Anderson’s (1996) research, suggests that if citizens were satisfied with national political institutions, they would tend to give more support to the European institutions. On the other hand, I. Sánchez-Cuenca (2000) has considered that a negative perception of the national political system due to, for instance, the level of corruption, can provoke citizens to tend to be more pro-European and have wider confidence in the European institutions. Nonetheless, these hypotheses don’t fit with some real facts such as that the lowest support to European integration in Spain was observed in 1995 when there were several examples of government corruption and international conflicts such as the popularly called ‘war of the Greenland halibut’.

Public Support for the EU and the Regional Level Effect

225

A perception taking into account the regional level opens other relevant questions and hypotheses to explain divergences in support to the European Union between states but also within states. For instance, it should be tested whether support to the EU at the regional level can be explained by disagreement with the central government which would reinforce I. Sánchez-Cuenca’s hypotheses, or if in fact it’s just a reflection of the pro-European attitudes showed by regional political leaders. It is possible to infer that if inside the states-level there were some kind of homogeneity on citizens attitudes towards the European Union, then support to the European integration process could be logically explained by factors or variables that affect at the same level the citizens of a state, such as corruption. Despite this, as far as we find different intensities of support between regions, the explanatory causes can be searched at this regional level such as the historical and cultural frame, the identity issues or the economic environment. Coming back to public opinion schools, there are some studies that explain support to the European Union using identity issues but usually work on the principle that nation-state is the relevant level. In that sense it is remarkable the research made by S. Carey (2002), Van Kerbergen (2000), G. Marks (1999), L. McLaren (2002) or Christin and Trechsel (2002). Despite the growing research focusing on national and cultural issues, it’s quite difficult to find out a clear direction between national pride and European identity. Although Christin and Trechsel (2002) observe that the higher the national attachment and national pride of Swiss citizens the less likely their support to the European Union, S. Carey (2002) argues that the relation between support to the nation-state and European Union attachment is directly proportional: as the proximity feeling to the nation-state gets stronger, there is higher support for the EU. He also proves that national identification is a question as relevant as the economic considerations defended by some authors in order to explain attitudes towards the European Union. Moreover, in his article Carey defends that sub-national identities must also be taken into account despite that they usually are not present on the global Eurobarometer analyses. In that sense, he presents a case study based on the UK. His research concludes that there’s a dynamic on three levels: regional, national and European; those who are clearly identified as ‘English’, the main nationality, are less pro-European than those primary identified with national minorities. This approach can be related to the idea of ‘double allegiance’ defended by Van Kerbergen (2000). He observes that attachment to the region or nation-state is not directly related to attachment to the European Union. In fact, he assumes that the European integration process depends on a ‘primary allegiance’ to the nation-state and a ‘secondary-allegiance’ to the European Union. Once again, the regional or sub-national level is directly avoided despite that some empirical analyses show its relevance and, at the most, we find some case studies complementing the main research focused on the nation-state level. At the purely theoretical level, some authors such as Marks (1999) have already proposed a conceptual frame study. He defines three kinds of identity: multiple identity, exclusive identity and unattachment. Starting on this classification, the author inquires to what extend European and national identities are compatible or whether

226


a national identity is kept up to the detriment of a regional or European identity. Marks concludes that these three identities or attachments are mutually inclusive. In other words, a strong identity at a certain territorial level would be linked to a higher proximity to other identity levels. Moreover, these multiple identities don’t act as a zero-sum game and, so, it’s possible to find at the same time a strong national identity but also a high European identity. The main lack of this research is that the author doesn’t give us a clear empirical support to his theoretical implications. In their recent research, Marks and L. Hooghe (2004) have included the identity as the main mechanism driving public opinion on European integration but, in this occasion, they have just focused on the identity at the nation-state level. To some extent, the study made by L. McLaren (2002) presents an empirical application of this compatibility between identities. She understands national identity on the basis of a perceived cultural threat from other member states. McLaren finds that individuals are more influenced by what could be seen as a ‘nation-state crisis’ than by a rational ‘cost-benefit relationship’ in relation to how their lives could be affected due to this integration process. Given that, a stronger national identity generates a lower pro-European feeling. On the other hand, R. Haesly’s research (2001) has generated new assumptions. Using factor analysis he differentiates between euroeskeptics and individuals with pro-European attitudes that, at the same time, can be divided between: europhiles (individuals with globally positives attitudes towards the European Union) and instrumental supporters (those individuals that give support to certain aspects of the European Union). Applying this schema to the United Kingdom, Haesly finds that pro-European Scottish people are unique in that they also recognize feeling more European than British. However, in the case of Wales, people who identify themselves as European, they mostly do that in opposition or as a way to differentiate themselves from the British. The relevance of this study is that the author is not focusing only on the presence of a certain degree of pro-European feelings, but he also looks for the reasons behind this support to the Union. The problem is that, once again, with this research we don’t know to what extent this situation can be extrapolated to the rest of the European regions. This paper suggests the necessity to generalize this kind of research and make it comparative and extensive to the whole European Union. To sum up, through this brief revision of the literature we can conclude that despite research in relation to public opinion in Europe is increasing, there’s still a lot to do. This paper goes into this debate and analyses together the power of utilitarian theories and socio-political approaches but also goes in depth on the differences not only between states but also among regions. Regions in Europe So far we have been talking about European regions or sub-national entities as a well-known administrative level. However, it is not so clear what we understand by ‘region’ or ‘sub-national’ identity. It is important how we define the concept of


227

region because it can take different forms in the territorial and political sense. In fact, different concepts of regions can generate divergences in our results and in some occasions it has also provoked conflicts between the regions. It has not always been understood the same as a ‘region’ and even nowadays the definition of this term will not necessarily take everyone to the same conclusion. The European Regions’ Assembly defined a ‘region’ as an: entity immediately under the central state level, equipped with political representativity that is assured by the existence of a regional council or, if it’s missed, by an association or organism set up in the regional level by the communities of the immediately inferior level.

This element of ‘political representativity’ is a key aspect that had not appeared in previous definitions and that opens a bi-directional reality or a situation of mutual necessity between the European community and the European regions. Michael Keating (1998) has also worked on an accurate classification on four kinds of regions: economic regions, cultural regions and two types of political regions, those that are formed by the state and/or governmental subdivisions and those that are defined by regionalist movements as the focus of their aspirations to regional self-government. This is one of the best or clearest classifications to work at the theoretical level but quite difficult to apply at the empirical level. In order to be objective and to be able to work at the empirical level, I have opted to work with NUTS (Nomenclature of Territorial Units for Statistics) regional division used by the EUROSTAT and created to be used by the European Union administration. This is mainly a territorial division and sometimes it doesn’t correspond to any political division. However, NUTS-2 level usually ties in with the regional level defined by the Assembly of European Regions. The empirical analysis in the present chapter has I’ve mainly used NUTS-2 level despite that in some occasions, such as with German Landers, NUTS-1 level has also been applied. This NUTS-2 level has been also qualified through other explanatory variables such as the existence or not of legislative power at the regional level or the measure of public sector decentralization. Europeanism and Regionalism in the EU The empirical research that is presented here is based on a huge database including five Eurobarometers from 1994 to 1996 and also economical and socio-political data at the national and regional level from the Eurostat. The historical context of this period of analysis has to be taken into account in order to understand why it has been chosen. At the beginning of the 1980s there was a ‘regional awakening’. The integration process was going on and some sub-national leaders looked at the European institutional building as a way to promote regions as political actors. Some regional actors reinforced the vision of an Europe of Regions where nation-states would disappear. This Europe of Regions would be more democratic, efficient and economically dynamic in comparison to the status quo where nation-states were

228


the central actors in the political field (Laffan 1996). At the same time, the number of regional delegations in Brussels went from two in 1985 to 50 in 1994. Regional political leaders focused on the creation of the Committee of Regions as an entity to give some voice to the sub-national entities at the European level. However, at the end of the 1990s, this ‘regional euphoria’ did not give the expected results. The Committee of Regions was no more than a consultative power where regions, cities and municipalities’ claims were mixed. In fact, despite that at the beginning in Brussels we basically found delegations or central offices from regions with legislative powers or some common particularities in relation to their claims to Europe (such as Scotland, Wales, German Landers, Corsica or Catalonia), at the end of the 1990s those offices were spread out to such extent that by now, Brussels is the center of a huge number of regional, local and municipality offices. Despite this, regional political leaders were still defending the benefits of the European Union for their regions. Were they successful in passing on these perceptions to the voters? In other words, what are in fact the attitudes showed by the citizens of these regions? Support to the European Union: Explanatory Factors Economic and Utilitarian Hypotheses Given that there are regional divergences on support to the European Union, I assume that individual characteristics such as education, occupation or income may not be the main determinant facts of European attachment. So, from an instrumentalist or economic point of view I test whether negative perceptions towards the European Union are influenced by different levels of regional competitiveness and the consequent benefits of the free market. Utilitarian theories presume that individuals are selfish and that their support to the EU varies due to changes in their welfare. Once we assume this, it’s worth it to analyse the effect of individual variables joined together to regional data. This will be done through the derivation of two economic models: Hecksher-Ohlin (H-O) and Ricardo-Viner (R-V) and the two hypotheses related to them. So, assuming that at the economical level European Integration means more free market, we suppose that: 1. High-skilled individuals living in regions with relatively high factor endowment are more supportive to the EU regardless of their industry of employment (H-O model). Heckscher-Ohlin’s model assumes that factors can move across sectors without difficulties and factor incomes vary by factor type (related to the individuals’ skill-level in a country). So, a country that is well endowed with skilled labour, will experience an increase in the relative price of skill-intensive goods and correspondingly will specialize in the production of those goods. Then, according to


229

the Stolper-Samuelson2 theorem, skilled workers in all sectors of the economy will gain and unskilled workers will loose (Mayda and Rodrik 2001). In this scenario, trade protection is received by sectors, which employ relatively intensively the factors, with which the country is poorly endowed relative to the rest of the world. This explains why a country’s abundant factors support free trade while its scarce factors oppose it (see Scheve 2001; J. Pape 2002). Secondly, we have used the Ricardo-Viner model to derive a contrasting hypothesis. It assumes that factors cannot move to other economic sectors, and factor incomes tend to vary by sector of employment. So, changes in relative product prices redistribute income across sectors. Sectors with prices declining (comparative-disadvantage sectors) generate income losses for specific factors while sectors with prices increasing (comparative-advantage sectors) realize income gains for their specific factors. Consequently, individuals employed in sectors where trade protection leads to higher prices should oppose trade liberalization (Scheve and Slaughter 2001). How can we connect this relation with the attachment to the European Union? Following Ricardo-Viner framework, I expect that: 2. Individuals living in comparative-advantage regions who perceive themselves to be competitive will be more supportive of the EU, regardless of their factor endowment (R-V model). Socio-political Explanatory Factors At the political and institutional sphere, we test to what extent the degree of autonomy in a region can be related to pro-European attitudes showed by the citizens and, finally, in the cultural field we’ve looked at the relation between higher regional identity and attitudes towards the European Union. As we have seen in the theoretical review, most of the authors have considered that individuals dissatisfied with nation-state’s status quo, the institutional design of their States or the quality of their democracy, tend to be more pro-European. However, it has not been tested what happens when we introduce regions and their own socio-political and cultural context in the explanatory model. The author’s hypotheses are based on the following assumptions: •

On the one hand we assume that, as G. Marks and L. Ray have asserted, regional governments were mobilized towards Europe because they had some political demands that generated a clash of interests with their own national government or, as these authors affirm, because ‘those in the region have a strong sense of separate identity, reinforced perhaps by a distinct language and/or culture, or because they have a durable party-political orientation that is not represented in the national government’ (see G. Marks and L. Ray 2002).

2 This theorem, and the Heckscher-Ohlin model, belongs to the group of ‘factorendowment’ models. They both assume factors mobility between sectors.

230

•


Secondly, we also assume that these movements at the political élites’ level have passed on to the citizens. In other words, citizens are not considered misinformed and some information from political élites to the citizens is assumed.

So, given the previous theoretical framework and these assumptions we suspect that individuals with a relevant identity, living in regions without legislative powers, would be more pro-European than individuals with a relevant regional identity who live in States very decentralized. In other words, we expect that the relation between regional identity and support to the European Union will also be affected by the institutional context. The logic behind this hypothesis can be found in the research made by S. Carey (2000) that we mentioned before. Carey considers that national identity’s feeling must be observed as a shortcut when individuals shape their attitudes towards the European Union. Then, national identification would be an element with as much weight as or even more than economic or instrumentalists factors. His results at the sub-national level present a multilevel dynamic – regional, national and European, in such a way that in the UK, those identified as ‘English’ will express lower European attachment than those identified with minority identities. The hypotheses that are tested at the empirical level intend to go to the background of the relation between certain institutional design and the identity feeling of the citizens. In other words, it is argued that regional identity per se is not a clear indication of a larger or minor support to the European Union. In fact, the existence of this kind of identity will be influenced by the institutional preferences of the citizens under the assumption that: if a state is not decentralized enough in order to give answer to the regional concerns of the citizens, these citizens will look for support in other institutional level such as the European Union. This point of view would explain why some regions tried to promote their presence as relevant actors in the European Union frame. In fact, at the time that our surveys were done (1995-1996), some regional political élites were strongly defending the idea that Europe was the answer to the traditional demands of power of these entities. Given this historical frame, it is reasonable that individuals with a strong regional identity will trust on the European chances especially if they live in states with a lower institutional decentralization. We hypothesize that regional identity affects preferences towards certain institutional development at the sub-national level and so it is expected that individuals strongly identified to their region will ask for higher decision-making powers at this sub-national level. L. Ray has expressed a similar theory defending that ‘individuals who are satisfied with the political status quo are hesitant to endorse further integration’ (L. Ray 2000). Some derivations of this hypothesis are presented in Table 13.1. In this framework, the researcher looks for support to the EU joining together individual data in relation to regional identity and national data in relation to decentralization. Secondly, the researcher introduces here another theoretical hypothesis related to socio-political factors but it will not be tested at the empirical level. It focuses on the relationship between regional parties’ voters and their support


Table 13.1

231

Decentralization in the nation-state: Regional identity

DECENTRALIZATION

HIGH

LOW

REGIONAL IDENTITY

Strong Weak

Low support to the EU Support to the EU based on

Strongly pro-European Support to the EU based on

instrumentalist arguments

instrumentalists arguments

to the European Union. It is assumed that voters of regional parties in the government tend to be more pro-European than voters of parties at the nation-state level. Some studies have argued that party government’s voters are generally more pro-European than citizens supporting parties in the opposition. This theory has been rejected by recent L. Ray’s research (European Union Politics 2003) who defends that voters of the governing parties are not necessarily more pro-European as this relation is qualified by other issues such as party positions or ideology. At the regional level, as G. Marks observes, ‘regions with a history of supporting opposition parties are more active in forming links with EU institutions than are regions dominated by governing parties’ (G. Marks et al. 1996). Apparently, governing parties’ voters are also relatively less in favour of a European integration because it can weaker their power in the political field. However, L. Ray (2003) has also introduced new intuitions in the relation between support to the governing party and support to the European integration. He argues that we can expect ‘both a positive effect of incumbent support on evaluation of membership in the current EU and the theorized negative relationship between incumbent support and support for further integration’ (L. Ray 2003). Another option that L. Ray tests is the possibility that the relation between support to the government and to the European Union would be in fact spurious. His results indicates that ideology and some economic variables such as incomes and unemployment are important predictors of support to the government so they could be the source of a potential spurious relation between support to the government and attachment to the European Union. As we have seen, I. Sánchez-Cuenca has also analysed the existence of a relation between national performance and pro-European attitudes. He stands on theories focusing on the distributional consequences of economic integration (see Gabel 1998) by claiming that the economic hypotheses cannot account for all dimensions of public opinion. He explains that the EU affects the economics of its member states through political mechanisms and his empirical results defend that the higher disagreement on national government is, the higher support to the European Union will be. Martinotti et al. (1995) are also focusing on the relationship between national performance and support to the European Union. They consider that the EU represents a symbolic threat or, alternatively, a chance to make up the bad governance of the nation-state. They point out that national and international integration of citizens is

232


not a linear process but it can be broken and controversial. So, instead of looking for a clear linear direction between both levels of support, they expect that it might exist in different combinations of orientations, which may not always follow the same pattern. They have created a typology of national and supranational orientation by crosstabulating the measure ‘satisfaction with national democracy’ and ‘evaluation of European membership’ (Martinotti et al. 1995). They propose four options concerning national versus supranational orientation – integrated (positive orientation towards the national political system and towards the EU), nation-statist (positive orientation towards the national political system and negative towards the EU), innovators (negative orientation towards the national political system and positive orientation towards the EU) and alienated (negative orientation towards national political system and towards the EU). So, given that in certain occasions regional parties can be considered as a proxy to the existence of nationalists movements in regions with their one cultural and institutional personality, and if we remind that these regions were the first on acting institutionally at the European Union supranational level, we can hypothesize that voters of governing regionalist parties will be more pro-European than nongoverning regionalist parties’ voters. This hypothesis can also be derived, and we will have a similar schema to the one presented by Martinotti et al. (1995), by adapting the regional frame: A. Governing regionalist parties’ voters Æ positive attitudes towards sub-national government and the European Union. B. Voters of regionalist parties in the opposition Æ negative attitudes towards sub-national and/or national government and low attachment to the European Union. C. Governing national political parties’ voters Æ positive attitudes towards central government and undetermined European attitudes. D. Voters of national parties in the opposition Æ negative attitudes towards central government and undetermined European attitudes. An analysis at the regional level should focus on the fourth possibilities but especially on the A and B conditions. What we have Learned From the Data? I’ve tested some of these theoretical hypotheses and I have organized them in five different models. Firstly I have analysed the effect of the Hecksher-Ohlin’s model and the hypotheses that can be derived from it. Secondly I have tested Ricardo-Viner’s model and its consequent hypotheses. Later on I have run both models together in order to see if the model improves or maybe one of both economical theories was losing weight. Fourthly, I’ve presented a model based only on socio-political variables in order


233

to test empirically our hypotheses and, finally, there’s a model where I have joined together economical and political or institutional issues. All the hypotheses have been tested using ordinal logic and, as we have advanced, our database was created from an aggregation of several eurobarometers and EUROSTATs data. Our dependent variable is the European attitudes’ variable that has been commonly used by the authors in similar research. This is an index already created by the Eurobarometer and it has three categories: negative attitudes towards the European Union, ambivalent attitudes and positive attitudes. Before choosing this variable as a dependent variable we’ve made some correlations to confirm that different Eurobarometers indicators were measuring similar issues when we analyse attitudes towards the European Union. Empirical Results I: Economic and Utilitarian Models3 Firstly, we have tested the hypothesis derived from the Hecksher-Ohlin model in relation to support to the European Union: High-skilled individuals living in regions with relatively high factor endowment are more supportive of the EU, regardless of their industry of employment. Based on the results in Table 13.2, we can conclude that Hecksher-Ohlin (H-O) model (model 1) has a really low explanatory power especially if we compare it with the Ricardo-Viner (R-V) model. It means that individuals tend to value and form their attitudes towards the European Union understanding that there’s no mobility between sectors. In model 1, coefficients of the main variables are very significant and they go in the expected direction. For instance, the H-O variable is strongly significant and with the expected sign. In other words, the combination of individual educational level and regional educational level has a positive coefficient and it means that as stronger is this variable, higher is support to the European Union. The fit of the model (Pseudo R2) is relatively low but given the sample size, it has to be considered as relevant. The more striking data is that the individual educational measure (educind) has no significant coefficient despite having the expected positive sign. However, human capital at the regional level (educreg) is highly significant and with a positive coefficient. So, as regional human capital is higher, citizen support to the European Union will be higher. Control variables are usually strongly significant and they have the expected sign. The age correlates negatively with support to the European Union so it means that elder people tend to be less pro-European (they are less favourable to the free market and the European Union than younger citizens). These results are consistent with the ones presented by Mayda and Rodrik (2001) where they found that elder people tend to be more protectionist than younger. 3 Due to the limited extension of this article, it’s not possible to go in deep on a description of the dependent and independent variables that have been used or how they have been constructed. Further information can be asked directly to the author.


234

The negative coefficient of the gender variable is consistent with expectations showed by other authors defending that women tend to feel less inclined to a free market and European Union. Mayda et. al. has observed that this difference in relation to gender persists even if we are controlling whether we are on the labour market or not. Cognitive mobilization (cognit=1 if mobilization is high) has a coefficient very significant and relatively stronger than the rest of the variables. It means that interest in politics will be linked to more pro-European attitudes. Results in relation to the ideology variable (which has a negative and very significant coefficient) indicate that citizens tend to give support to the European Union as more ideologically in the left they are. These results fit with the ones observed by J.Fernández Albertos and I. Sánchez-Cuenca (2002) or Mayda and Rodrick (2001) and Scheve and Slaughter (2001). Finally, GDP per capita at the regional level has also a coefficient very significant and positive so it indicates that as higher is the GDP per capita at the regional level, higher is the tendency to have pro-European attitudes.

Table 13.2

Support to the European Union: economic models

INDEPENDENT VARIABLES Economic Variables H-O Model Human Capital reg. Individual educ. R-V Model Feartrad Industry Control Variables Age Gender Ideology Cognitiv GDP per capita Reg N Chi2 Pseudo R2 Log Likelihood

MODEL 1

MODEL 2

MODEL 3

.000332*** (.00005) -.579965*** (.01847) -.000731*** (.00011)

.00221*** (.00055) -.02161*** (.00106) -.02764 (.03505) .00035*** (.00005) -.60367*** (.01873) -.00053*** (.00011)

-.00308*** (.00054) -.11145*** (.01868) -.02041*** (.00318) -.25191*** (.00042) -.00268*** (00041) 44965 3929.08(8) 0.045 -41655.593

-.00214*** (.00055) -.10249*** (.01881) -.01878*** (.00321) -.25411*** (.01041) .00204*** (.00044) 44965 5101.77 0.059 -41069.248

.001918*** (.00043) -.016597*** (.00081) .014027 (.02693)

-.006531*** (.00042) -.143813*** (.01491) -.031292*** (.00242) -.262317*** (.00817) .003863*** (.00031) 69471 3198.72 (8) 0.0240 -65171.346

The model 2, in Table 13.2, focuses on Ricardo-Viner assumptions and the following hypothesis – Individuals living in comparative-advantage regions who perceive themselves to be competitive will be more supportive of the EU, regardless of their factor endowment.


235

As we can observe in this model, the adjustment of the model is better, all the variables are very significant and they have coefficients quite more powerful but the direction of the coefficients is not always as I theoretically expected. Firstly, the combination of personal competitiveness and unemployment at regional level (in other words, the interaction between individual and regional competitiveness) has a positive coefficient in the regression. So, high values in both variables increase the tendency to give support to the integration process. However, if we analyse both variables separately, we observe that the higher the fear to free market (and as lower is the individual competitiveness), the lower the probability of having pro-European attitudes. In the same way, there’s an indirect direction between regional unemployment and support to the European Union: as unemployment at the regional level increases, the attachment to the European Union decreases. These results are consistent with the ones showed by other authors that defend that as lower is satisfaction towards your own country’s situation, higher will be the tendency to be more pro-European. In relation to control variables, they follow a similar trend than Model 1 except for GDP per capita at the regional level; its coefficient has changed the sign and so we understand that as far as we take into account mobility issues, as in Ricardo-Viner model, GDP per capita affects in the opposite direction: in regions with a low GDP per capita we will observe a higher support to the European Union. Model 3 presents a combination of both hypotheses and we observe a better fit of the model (Pseudo R2=0.0585) but there are very few variations in relation to the coefficients of our relevant variables. Most significant transformations are related to individual educational level that, despite not being significant, has changed its sign. So, as lower is the observed individual educational level, higher will be the probability to give support to the European Union. Empirical Results II: Models Based on Socio-political and Cultural Explanatory Factors The most relevant fact that we observe in Table 13.3 in comparison with Table 13.2 is that models based on socio-political variables have obtained a much better fit of the model and stronger coefficients than the latest ones. As we can see in Table 13.3, the researcher has tested a model based on sociopolitical variables and finally I present a complete model of analysis joining together political and economic issues in relation to European Union attachment4. The hypothesis that we have tested at the empirical level establishes that – Individuals with a relevant regional identity, living in regions without legislative powers, would be more pro-European than individuals with a relevant regional identity who live in states very decentralized. Decentralization is measured by the presence or absence of legislative powers at the regional level. 4 As we have advanced, our hypothesis in relation to regional political parties have not been tested due to lack of data for the 143 European regions and their regional parties in government. This hypothesis remains at the theoretical level and will be tested in future research.


236

Table 13.3

Support to the European Union: Political model

INDEPENDENT VARIABLES Economic variables H-O model Reg. Human Capital Individual educ. R-V model Feartrad Industry Political variables Hippol Citiznat Citizreg Fearnat Fearlang Reglegr Control variables Age Génder Ideology Cognitiv GDP N Chi2 Pseudo R2 Log Likelihood

MODEL 4

MODEL 5

.00275*** (.00058) -.02137*** (.00111) -.07846** (.03666) .00031*** (.00005) -.46855*** (.01971) -.00073*** (.00012) .1183*** (.04144) -1.2559*** (.03071) -1.5278*** (.03071) -.8501*** (.01997) -.1157*** (.02008) .0108 (.02049)

.07905* (.04588) -1.14873*** (.03395) -1.39557*** (.04599) -.70123*** (.02254) -.04347* (.02248) .09391*** (.02431)

-.0039*** (.00051) -.1054*** (.01774) -.0188*** (.00297) -.2027*** (.00973) -.0024*** (.00035) 51166

-.00098 (.00057) -.07224*** (.01961) -.01311*** (.00338) -.21107*** (.01089) -.00053 (.00049) 43110

6329.85(11)

7789.31

0.065

0.093

-46231.268

-37832.679

A relevant result in Model 4 is that regional identity’s variable (citizreg) has a negative but higher coefficient than national identity’s variable (citiznat). What are the implications of these coefficients? It means that individuals with a relevant regional identity feeling will be less pro-European than individuals with a strong national identity. So, despite the strong Europeanism showed by regional leaders in the 1990s, among citizens with regional identity were prevailing euroskeptical attitudes in relation to the European integration model. On the other hand, the interaction between decentralization at the regional level and regional identity, it’s giving an unexpected positive coefficient. So, citizens with strong regional identity living in regions with legislative powers will tend to be more pro-European. However, as we have seen, regional identity by their own was related to a higher euroskepticism so, it reinforces the idea that institutional frame affects or qualifies the negative relation between regional identity and pro-European attitudes. The main problem when we analyse the effect of interaction variables (variables result of the combination of two independent variables), is that there are different


237

theoretical approaches to interpret their results. Given that, we have considered that individuals with strong regional identity tend to be less pro-European than individuals with national identity. However, this relationship is also influenced by explanatory variables at the regional and institutional level such as, in our case, the political decentralization at the regional level. This interpretation of the results is exemplified in Figure 13.1.

Support to the UE

Regional id.

Regional decentralization Figure 13.1 Interpretation of the results

Going back to Model 4, the most relevant coefficients were the ones related to the fear of losing your own nationality or language. They had negative coefficients so we will talk about lower pro-European attitude in citizens that are afraid of losing these symbols. Finally, we have presented model 5, with a much better fit of the model (Pseudo R2 equals to 0.9), and where all the variables are significant except for: GDP per capita at the regional level, the age and the interaction of regional identity and legislative powers. Despite not being significant, the sign of their coefficients is the same that we observed and expected. One of the variables that is reinforced in model 5 is the one related to legislative power at the regional level (its coefficient is really stronger from one model to the other). This issue is especially relevant as far as it reaffirms the need of going on these analysis in the institutional and regional level. To sum up, the model based on institutional and socio-political issues in order to explain public support to the European Union is more powerful than the ones based on instrumentalist and economic theories. In relation to our socio-political variables, except for the case of fear to free market’s variable, all the rest of the coefficients are stronger in comparison to the instrumentalists approaches. Moreover, the adjustment of the model in Model 4 is much better than in the other three. The hypotheses presented at the theoretical level can be confirmed except for the one related to the Ricardo-Viner approach that must be qualified; separately our variables of individual competitiveness and regional unemployment go on the expected direction but, as we have seen, the interaction term has not really confirmed these trends. Working on such a big sample, there’s a high probability that our variables would always be at least slightly significant and that all of them had some explanatory power. However, we can go a little bit further on the analyses of these coefficients and so I’ve worked on some simulations finding out to what extent


238

changing the value of some variables is increasing or reducing the probability of being more or less pro-European. As we have seen in the models, adding political variables is giving us much more explanatory power in order to understand attitudes towards European Union. However, interaction variables don’t show clearly what happens when an individual has a strong regional feeling but is living in a region with low legislative powers. I have worked on simulations that focus on the changing probabilities of giving or not support to the European Union when we change the values of our main institutional and socio-political variables. In Table 13.4 we observe that the probability of being pro-European is really higher among citizens without regional identity so, regional identity would be in the base of a lower support to the European Union.

Table 13.4

Probability of giving support to the European Union

Region with legislative power Region without legislative power

*Negative With regional id.

attitudes Without regional id.

*Positive With regional id.

attitudes Without regional id.

0.23

0.07

0.27

0.6

0.24

0.07

0.25

0.58

As we can see in Table 13.4, there’s a probability of 27 percent of being pro-European if citizens have a strong regional identity and are living in a region with legislative powers while the probability of being pro-European having regional identity but living in a region without legislative powers is quite lower (25 percent). These simulations confirm again that the higher percentage of euroskeptics is found on citizens with regional identity and, moreover, this negative attitude is slightly higher if individuals are living in regions without legislative powers. Consequently, given that a citizen has strong regional identity, as lower is the decentralization level of its country, lower are his pro-European attitudes. So, it returns us to this latent refusal to the European Union model among citizens with regional identity but living in certain sub-national entities. In order to extent this analysis, the author has have made some more simulations analysing changes in probabilities in certain contexts. As we can observe, among individuals living in regions with legislative powers, the probability of being proEuropean it’s been reduced by 33 percent if we change from having regional identity (value 1) to not having it. On the other hand, the probability of being euroskeptical if we go from not having regional identity to having it, has increased by 16 percent. In conclusion, here we have a final important interpretation of our results: once we focus on regions with legislative powers, such as a German Lander or an Spanish ‘Comunidad Autónoma’, if their citizens have regional identity, they will tend to be less pro-European than those without regional identity.


239

Conclusions The aim of this research consists on presenting a critical literature review in relation to the explanatory mechanisms of support to the European Union and then, testing empirically some hypotheses in relation to this framework. The literature review in relation to public opinion on European integration has been useful to justify these hypotheses in the economic and socio-political level. Secondly, the empirical analysis it is quite innovative as far as, on the one hand, regions were used as unit of analysis, and on the other, it demonstrates that instrumentalists theories in public opinion can be overcome by socio-political and cultural issues. This article has showed that in order to explain attitudes towards the European Union there are different theoretical approaches. In fact, as we have seen, M. Gabel and others have based their explanations on instrumentalists and economical models whereas L. McLaren, S. Carey or I. Sánchez-Cuenca have looked at cultural and socio-political explanations. Both theoretical approaches have been important to advance on our understanding of European attitudes but they also have their own limitations. Usually some political and institutional issues have not been taken into consideration and in occasions it would be necessary to look at other units of analyses in order to go on further conclusions. Another conclusion that we get from this literature review is that research on public attitudes towards European Union it’s growing and that, on the other hand, there’s a large literature on regionalism in Europe. However, public opinion analyses taking into account the regional level – which we have justified to be relevant – is still quite undeveloped. This framework it’s on the background of the hypotheses that have been empirically tested through a huge database: I have aggregated several Eurobarometers and worked on 143 European regions together with the individual and nation-state level. As we have observed in the empirical results, when we are taking into account the regional level, the model based on socio-political and institutional issues appears to be more powerful than the one including the utilitarian approach. Moreover, regional identity is one of the more relevant variables in order to explain attitudes towards European Union. Finally, as we have seen, grade of decentralization is an important variable especially when it affects pro-European attitudes in citizens with strong regional identity. In conclusion, those with a strong regional identity have a higher probability to be more Euroskeptical. However, if we introduce the effect of decentralization, those citizens living in regions with legislative powers, despite having a strong regional identity, are more pro-European than those living on regions without legislative powers. At the beginning of this paper we have mentioned a recent debate in Spain for ratifying the European Constitution. We have said that in some traditionally proEuropean regions it has been a strong rejection to this Treaty. Our results could be useful to explain these attitudes: probably in the 1990s there were latent in certain citizens -those with a strong regional identity – some Euroskeptical attitudes that

240


we have recently observed on regional leaders. But this will be another story to be tested. References Anderson C.J. and K.C. Kaltenthaler (1996). ‘The Dynamics of Public Opinion Toward European Integration, 1973-93.’ European Journal of International Relations 2: 2. Carey, S. (2002). ‘Undivided Loyalties: Is National Identity an Obstacle to European Integration?’. European Union Politics 3: 4. Christin, T. and A. Trechsel (2002). ‘Joining the EU ? Explaining Public Opinion in Switzerland.’ European Union Politics 3: 4, 415-43. Fernández A. and I. Sánchez-Cuenca (2002). ‘Factores Políticos Y Económicos En El Apoyo a La Integración Europea.’ Papeles De Economía Española 91. Gabel, M. (1998). ‘Public Support for European Integration: An Empirical Test of Five Theories.’ The Journal of Politics 60: 2. Gabel, Mattew J. (2001). Interests and Integration. Market Liberalization, Public Opinion, and European Union. Ann Arbor: The University of Michigan Press. Haesly, R. (2001). ‘Euroskeptics, Europhiles and Instrumental Europeans. European Attachment in Scotland and Wales.’ European Union Politics 2: 1. Keating, M. (1998). The New Regionalism in Western Europe. Aldershot: Edward Elgar Publishing. Keating, M., J. Loughlin and K. Deschouwer (2003). Culture, Institutions and Economic Development. A Study of Eight European Regions. Aldershot: Edward Elgar. Laffan, B. (1996). ‘The Politics of Identity and Political Order in Europe.’ Journal of Common Market Studies 34: 1. Marks, G. (1999). ‘Territorial Identities in the European Union.’ In J.J. Anderson, (ed.). Regional Integration and Democracy. Expanding on the European Experience. Rowman & Littlefield Publishers. Marks, G. and L. Ray (1996). ‘Competencies, Cracks and Conflicts.’ Comparative Political Studies 29: 2. Marks, G, J. Carole and L. Ray (2002). ‘National Political Parties and European Integration’. American Journal of Political Science 46: 3. Martinotti, G. and S. Stefanotti (1995). ‘Europeans and the Nation State.’ In R. Sinnot Niedermayer (ed.). Public Opinion and Internationalized Governance. New York: Oxford University Press. Mayda, A. and D. Rodrik (2001). ‘Why Are Some People (and Countries) More Protectionist Than Others?’. National Bureau of Economic Research 846. McLaren, L. (2002). ‘Public Support for the European Union: Cost/Benefit Analysis or Preceived Cultural Threat?’. Journal of Politics 64: 2. Pape, J., ‘Unpacking Utilitarianism: The Economic and Political Formation of Preferences Towards the European Union’. Unpublished paper. Ray, L. (2003). ‘Reconsidering the link between Incumbent Support and proEuropean Union Opinion’. European Union Politics 4: 3.


241

Ray, L. (1999). ‘Measuring Party Orientations towards European Integration: Results from an Expert Survey’. European Journal of Political Research 36. Sánchez-Cuenca, I. (2000). ‘The Political Basis of Support for European Integration.’ European Union Politics 1. Scheve, K. and M. Slaughter (2001). ‘What Determines Individual Trade-Policy Preferences?’. Journal of International Economics 54. Scott Long, J. and J. Freese (2001). Regression Models for Categorical Dependent Variables Using STATA. Texas: Stata Press. Sinnott, R. (1997). ‘European Public Opinion and the European Union: The Knowledge Gap.’ Working Paper Barcelona 126.


Chapter 14

Regional Development in the European Union: Implications for Austria’s Viticulture Nathalie Homlong and Elisabeth Springler

To reduce persisting regional disparities between the Member States of the European Union, a wide set of support measures and subsidies has been set up. This chapter aims at investigating the effects of funding for a region that is lagging behind in economic development. The case study for this investigation is Burgenland, the only objective 1 region in Austria – a region with low economic development compared to the EU average – and focuses on an important sector in this region, viticulture. The following research question is asked: Is EU objective 1 funding contributing to increase competitiveness of wine farming in Burgenland compared to the other wine growing regions of Austria? To answer this question, the chapter starts out by giving an overview over important regional development theories and discusses the main features of European regional development. After that we analyze the situation in the case study and evaluate the impact of EU funding for the economic development of this region. In terms of methodology this chapter is based on interviews with experts and on comparative statistical analysis. Conversely to our approach several studies (Ferto and Hubbard 2001; Laursen 1998; Benedictis and Tamberi 2001) focus on revealed comparative advantage (RCA) approaches introduced by Balassa.1 The research 1 This method measures changes in comparative advantages of countries by focusing on the level of exports of a specific good in relation to the export volume of a similar product of other countries. This index then shows clearly whether the country investigated has a higher or lower performance – in this case comparative advantage – of exporting one specific good. Although measures like the Balassa index and similar measures, which were introduced among others by Vollrath (Ferto and Hubbard, 2001), seem to provide a useful method for the analysis in this chapter on first sight, the research question in this chapter does not enable this mathematical approach. First of all we focus on regional and not national development. From a theoretical point of view this is not an obstacle for implementing comparative advantage approaches, but simply results in data problems. Apart from that, the specific characteristics of the wine industry hamper any comparative advantage approach. Unlike other sectors and products within the agricultural sector, exports in the wine industry are dominated by specific tastes and feelings attached to the product, which highly diversify similar products – even with comparable quality standards. Additionally, exports in the wine industry are very volatile in terms of export countries and volume, as data for Austria indicates. Wine exports do not

244


question in this chapter requires a qualitative rather than a quantitative approach, therefore revealed comparative advantage approaches cannot be used. This of course leaves us with an interpretable result on the effects of international funding for the development of the wine industry in Burgenland, rather than with a specific number, but nevertheless trends and developments are clearly observable. Theoretical Background of Regional Development As there are great differences between the member states of the European Union not only in terms of size and population, but also in income per capita and overall macroeconomic indicators, such as GDP per capita, unemployment rates and inflation rates, various theoretical backgrounds serve as a rationale for the supranational regional development policies. Numerous empirical studies (Altmann 2003; Parr: 1999; Li et al. 1998) put emphasis on the explanatory value of the most discussed regional development theories in selected regions or try to further develop the concepts by integrating additional features (Chick and Dow 1988). In this chapter these regional development theories are presented to give an overview of the justification of the European Union. Traditional regional development theory can be traced back to neoclassical equilibrium approaches. Explanations for lower incomes and lower regional development growth rates in certain regions are argued similarly like the rationale for international trade. The central mechanism in this case is the process of capital accumulation; savings and investments are the crucial factors to accumulate capital, which in turn increases the amount of goods produced (Maier et al. 2006). These different factor endowments result in different income levels across regions. As regional development theory according to neoclassical approaches operates within the strict assumptions of neoclassical equilibrium models, these differences can only occur in the short run. In the long run regional disparities will be eliminated (Chick and Dow 1988: 224). The explanatory value of this approach is doubted, firstly because of the inability to explain persisting regional disparities and secondly because of the strict neoclassical assumptions which need to apply to make this regional development theory coherent. Also Li et al. (1998: 129), who empirically tested the explanatory value of the neoclassical Solow growth model for Chinese provinces conclude that although the model partly provides an explanation, ‘to successfully explain the case of China, one may have to go beyond existing models of economic growth eventually.’ Similarly to these approaches also theoretical arguments within a Marxian framework to explain regional disparities are said – following Chick and Dow (1988: 226) – to have minor explanatory value. Out of the discussion of the weaknesses of these two different approaches, theoretical frameworks emerged in the critical tradition of the neoclassical and Marxian theory, which provide more explanatory value for the lower regional depend only on the quality and performance of the product, but also strongly on economic development of the importing country. Similarly trends and tastes may vary in a rather short period. Therefore a multiple bias might occur when introducing a comparative advantage approach.

Regional Development in the European Union

245

development in certain areas. Criticism of the neoclassical approach fostered the evolution of polarization theories, among others by Francois Perroux, Gunnar Myrdal and Alfred Hirschman, which implement also approaches of economic geography by defining sectoral polarization and regional polarization approaches. According to growth pole theories regional economic development is determined by specific sectors of the economy, which increase above average and due to the strong interrelation of these sectors with other sectors of the regional economy serve as the driving forces for regional development, but can also hamper it (Maier et al. 2006: 78; Parr 1999: 1199). The core argument of all polarization approaches is that market forces will not decrease but rather increase regional disparities. The feedback loops between regions can also lead to cumulated negative effects. This explains a need for national or supranational intervention to promote positive cyclical accumulation and hamper a negative one. Also out of the Marxian theoretical framework adapted models emerged, which have high explanatory value for differences in regional developments. These so called Core-Periphery models are based on the Neo-Marxian dependencia theory, which evaluates the power and influence of core regions for development. These models have high influence also in international political economy and are empirically tested especially for Latin America. The latter explains why those approaches do not seem to be of immediate importance for the evaluation of the rationale for regional development policies in the European Union. A third stream in regional development theories, traced back to the Keynesian theoretical framework, is purely based on the assumptions of the Keynesian theory as rationale for international or supranational intervention to boost regional economic development. The most important of these demand led approaches are the economic base model as well as input-output models. In the first model economic sectors are divided into so-called basic and non-basic sectors. The basic sector generates income from exports, which is the basis of income for the region; the non-basic-sector represents the local – not export-based – sector. When exports are increasing, the non-basic will observe a regional export-base multiplier effect. Therefore increases in output and income of the region are higher than increases in output of the basic sector. Demand for exports are not explained in the model, but the conclusion can be derived that the development of certain leading sectors has to be observed carefully and promoted, as also negative effects have a multiplicative effect for the whole region (Maier et al. 2006: 33). Input-Output models follow the same rationale as the economic base model, but are enlarged by several sectors and control for rebound effects (Maier et al. 2006: 41). The rationale for the European Union to be engaged in regional development finds its roots in all theoretical frameworks which recognize the problem of persisting regional growth and development differences that cannot be diminished only by market forces. The tools and frameworks of regional policies can be seen as a mixture of economic and socioeconomic approaches stating the need of international or supranational intervention as described above. For our research question especially the economic base model approaches and input output model rationales are important, as we assume that an increase in competitiveness in viticulture in the region of Burgenland will lead to a multiplier effect and boost economic development as a whole in the region.

246


Basic Structure and Objectives of the Structural Funds of the European Union Already in the Treaty of Rome the need to reduce differences in development of the regions of the European Economic Community (EEC) was recognized. The founding treaty of the EEC stated the member states’ wish to ‘ensure their harmonious development by reducing the differences existing between the various regions and the backwardness of the less-favoured regions’ (European Union 2005). But it took almost two decades until the Community created the first regional development instrument – the European Regional Development Fund (ERDF) – in 1975. Initially the ERDF only provided additional funding to the regional development programmes of the individual member states. Over the years funding increased gradually. With the accession of Greece (1981) and Spain and Portugal (1986) to the European Community2 differences in economic development between the existing EC-members and the new member states increased, therefore creating a need for further intensification of the Community’s regional development funding (Maier et al. 2006: 170). Furthermore it was expected that regional development differences between wealthy and poorer regions would intensify once the Single Market would come into effect in 1992. As a result the funding structure was reformed and funding was stepped up in 1989. The main principles for regional development funding that this reform introduced do still apply today: • • •

• •

•

Concentration: the funding is concentrating on the least prosperous regions. Partnership: all governing levels (region, member state, Commission) are to work together on regional policies. Subsidiarity: the lowest tier of government possible should be involved in the policies, thereby leading to higher local and regional acceptance and efficiency of the programs. Programming: instead of supporting individual initiatives, the EU’s regional policy supports projects that are embedded in multi-year programs. Additionality: EU funding is not supposed to replace national and regional funding, but to supplement it, and is therefore only given in addition to other sources of funding (Armstrong and Taylor 2000, 324-332). Evaluation: all projects are subject to evaluation before, during and after their completion.

After the creation of the ERDF, other funds were set up. Today the European Union is using the following funds for regional development:

2 Together with the European Coal and Steel Community (ECSC) and Euratom the EEC merged into the European Community (EC) in 1967 (Baldwin and Wyplosz 2004: 11).


247

The Structural Funds: •

• •

•

European Regional Development Fund (ERDF): is used for local development projects, infrastructure, support for small businesses, transport and communication, investments resulting in job-creation, among others. European Social Fund (ESF): finances training that improves job qualifications, training of unemployed persons, as well as start-ups. Guidance Section of the European Agricultural Guidance and Guarantee Fund (EAGGF): funds investments that lead to improvements of agricultural structure, support for tourism, SMEs and environmental measures in rural areas. Financial Instrument for Fisheries Guidance (FIFG): aims at modernizing the fishing industry.

The Cohesion Fund: was created in 1993 to assist the poorest EU member states; criterion is a per-capita GNP in p.p.p. below 90 per cent of the EU-average (Bourne 2003: 285). Initially Ireland, Spain, Portugal and Greece received funding from the Cohesion Fund; now the 12 new member states that joined in 2004 and 2007 are eligible (Regional Policy 2007). In this period cohesion funding received €18 billion (Maier et. al. 2006: 176-177). During programme period 2000-2006 Structural Funds had a total of EUR 195 billion available, which was spent on the following objectives and initiatives: Objective 1 (ca. 70 per cent of Structural Funds): aimed at regions that are lagging behind in development. The criterion was a GDP per capita below 75 per cent of the EU average, or areas with low population density (under 8 persons per square kilometer) in Finland and Sweden; focus areas were investments in infrastructure and companies, as well as human resources to address the major problems in these regions, such as low levels of investment and high unemployment rates. • Objective 2 (ca. 11 per cent of Structural Funds): projects in regions with structural problems in rural, industrial or urban areas; the projects are supposed to help facilitate the economic conversion of these areas. • Objective 3 (ca. 12 per cent of Structural Funds): aims at the modernization of training and education systems and at promoting employment. These funds are available in the entire EU with the exception of objective 1 regions (Baldwin and Wyplosz 2004: 262). • Community Initiatives (ca. 5 per cent of Structural Funds) consisted of the four programmes INTERREG III, LEADER+, URBAN II and EQUAL. INTERREG supported interregional projects, LEADER rural development, URBAN focused on urban problem regions and EQUAL on reducing discrimination and inequality on the labour market. For the following budget period the program structure was reformed and in programme period 2007-2013 the following three objectives apply: •

•

Convergence (81.54 per cent of the regional development funds): replaces


248

•

•

former objective 1; the goal is that lesser developed regions converge with the rest of the EU. Regions with a GDP per capita below 75 per cent of the EU average are eligible; this applies mostly to regions in the new member states. In addition to that regions with a GDP p.c. below 75 per cent of the EU-153 average receive phasing-out funding (see also Figure 14.1). Regional competitiveness and employment (15.95 per cent of the funds): investment in human resources as well as development programmes fostering innovation, entrepreneurship and protection of the environment should help improve competitiveness. European Territorial Cooperation (2.52 per cent of the funds): exchange of experiences and inter-regional cooperation across borders (Regional Policy 2007).

Figure 14.1 shows that the majority of the regions that receive Convergence funding are located in the new member states, whereas the remaining regions of the EU are eligible for the competitiveness and employment strand of regional development funding. The increased importance of regional development policies, especially after EU enlargements in 2004 and 2007, is also reflected in the amount of spending. In the budget period 2007-2013 regional development accounts for 43 per cent of the EU’s total expenditure and is therefore the largest item in the budget, surpassing even agriculture (European Commission). Case Study: Developments in Viticulture in Austria’s Objective 1 Area In international wine production there has been growing competition between the traditional wine growing countries of Europe, the so-called ‘Old World’ countries on the one hand and wine producers of ‘New World’ countries like the United States, Australia, New Zealand, South Africa, Argentina and Chile on the other hand. The quality of new world wines has gone up to meet old world standards, while conditions like climate and farm size often favour large-scale production at constant quality levels and quantities among new world producers (Spitzer 2002). This is also reflected in the fact that fluctuations in quantity of wine production in EU-15 countries from the late 1990s to 2001 were much greater than among new world producers (European Commission 2002: 13). As Table 14.1 shows, the share of wine production by members of the EU-15 has been declining slightly since 2000. At the same time Austria’s share has gone up somewhat, although both the trends for EU-15 and for Austria show fluctuations, which can be at least partly attributed to varying harvests. Table 14.1

International wine production in hectoliters 2000

World wide 3

2001

2002

283,900,000 266,100,000 253,300,000*

The EU member states before enlargement in 2004.

2003

2004

260.891,000

294,600,000


Figure 14.1 EU Regional development funding 2007-2013 Source: Regional Policy, 2007

249

250


EU15 173,443,000 156,724,000 148,085,000* 152,658,000* 173,776,000* ratio in % 61 59 58 59 59 EU25 – – – 158,836,000* 180,858,000* ratio in % – – – 61 61 Austria 2,338,410 2,530,576 2,599,483 2,529,846 2,731,000* ratio in % 0.824 0.951 1.026 0.970 0.927 * estimation Source: Österreichische Weinmarketing Servicegesellschaft 2004,174; 2005, 175; own presentation

In the EU there has been a clear trend towards production of higher quality wines. Another important consumption trend is higher demand for red compared to white wine since the 1990s. In the past three decades the wine market has been characterized by increasing trade, with EU-15 exports losing in relative importance in comparison to new world wines (European Commission 2002: 14-16). Significance of Agricultural Policies (CAP) for the Wine Industry Additional to measures out of the European Structural Funds also subsidies from the European Union’s agricultural policies are important for this sector and led to production surpluses by EU-15 wine growers. The EU has been addressing this issue by introducing a ban on new plantings, which was in effect until 1996, and by granting a premium for permanent abandonment of vineyards (Faltl 2001: 73). These measures have not brought the desired results – partly due to growing yields the EU is still producing significant surpluses. At the moment new world wine farmers are not producing structural surpluses, but significant increases in new areas used as vineyards from 1998 to 2000 in Australia, Chile and California are signs of possible future surpluses in production in new world countries (European Commission 2002: 15-18) and are further increasing competition between old and new world wines. Austrian Wine Four of Austria’s nine provinces are wine growing regions. With a share of 61.8 per cent of all of Austria’s wine farming areas, Lower Austria is the largest wine region, followed by Burgenland with 29.9 per cent, Styria with 6.8 per cent and Vienna with 1.4 per cent; winegrowing in the provinces of Carinthia and Upper Austria is very limited and will therefore not be discussed further. As shown in Figure 14.2, Lower Austria and Burgenland together make up the region ‘Weinland Österreich’ (wine country Austria). At least partly as a result of EU and national premiums for abandonment of vineyards, the land used for wine growing in Austria declined by 8.5 per cent from 1992 to 1999 and covered 48,500 hectares in 1999. Except for a sub-region of Burgenland (Mittelburgenland) and a sub-region of Styria (Weststeiermark), white wine dominates the wine production in Austria’s entire wine region. (Österreichische Weinmarketing Servicegesellschaft 2005: 9-11)


251

Figure 14.2: Austrian wine growing regions Source: Österreichische Weinmarketing Servicegesellschaft 2005, 10.

There are two trends worth noting in Austria’s wine industry in recent years. Firstly, from the mid-1980s Austria’s wine industry underwent a severe change. Before 1985 Austrian wine producers were mainly focusing on the production of cheap sweet wine in large quantities. In 1985 the so-called ‘wine scandal’ was uncovered – a few wine producers from the provinces of Burgenland and Lower Austria had sweetened their wines with di-ethylen glycole, which is a sweet oily alcohol usually used as anti-freezing agent. As a reaction Austria introduced a very strict wine production law in 1985, which was updated in major parts in 1999 (Bundesgesetz über den Verkehr mit Wein und Obstwein – Weingesetz 1999). Simultaneously a structural change in the wine industry was made possible by the liquidation of the ‘Weinwirtschaftsfonds’, which had aimed at stabilizing the wine industry in Austria and had been part of the social partnership ever since its foundation in 1969. Furthermore the ‘Österreichische Weinmarketing Servicegesellschaft’ (Austrian wine marketing association) was founded to re-establish consumer confidence in the quality of Austrian wine (Jany 1988: 21). The results were significantly improved quality standards and new approaches by the following generation of winemakers, with stronger focus on education for winegrowers, quality instead of quantity and a stronger export orientation. Secondly, following international trends and consumer demands, wine production shifted from an overwhelming share of white wine production to higher shares of red wine. With a production of on average 2.5 million hectoliters wine per year (Österreichische Weinmarketing Servicegesellschaft 2005: 46) Austria is among the smaller wine producing nations. Around one third of the production is exported, where the peak until now was reached in 2003 when 831.400 hl were exported (LBG 2005: 10). The fact that the price gap between Austrian and foreign wine is narrowing can serve as an argument for the reestablishment of Austrian wine as high

252


quality wine. Nevertheless one has to bear in mind that prices in the wine sector are first of all highly instable and depend on the quality of harvests each year. Secondly comparable prices of quality wines do not exist (European Commission 2006), which complicate the analysis of causal arguments between national and international wine prices in the light of improving quality in the sector. Overall exports went down by 11 per cent from 2003 to 2004, but the total value of wine exports went up by 20 per cent (Österreichische Weinmarketing Servicegesellschaft 2005). As shown in Table 14.2, in the period 1997 to 2005 Austrian wine exports to most countries have increased. With about 60 per cent of Austria’s total wine exports, Germany is the biggest market for Austrian wine, and the volume of exports approximately tripled in that period. Surprisingly values only about doubled in the same period, indicating that higher quantities of cheaper wine were exported from Austria to Germany in 2005 as in 1997. When comparing more recent developments from 2003 to 2004 however, higher export values were achieved with clearly lower volumes. A similar development can be observed in Italy. In the US on the other hand the value of exports went up more strongly than the volume over the entire period from 1997 to 2005, thereby indicating a continuous shift towards a higher price segment. Increased values of exports from 2003 to 2004 can furthermore be observed in Switzerland, the UK, Japan, Slovakia, Denmark, the Netherlands, France, Canada, Taiwan and Finland, partly at significantly higher values at reduced quantities. While the Czech Republic is among the most important importers of Austrian wine in terms of quantity, exports there are clearly dominated by the low-price segment. Similar to the developments in the home market, also the external trade sector suffers from fluctuations in volume and value. This can be explained by short-term developments of harvests and by changes in tariff rates, which increase importprices in the export countries. Tariffs and other border measures might vary because of differing alcohol content or depending on which quantities of wine were imported bottled or in bulk (Schnepf 2003: 6). Regional Development Funding for Wine Growing in Austria Out of two approaches of the CAP (common agricultural policy) programme of the European Union, market organization and regional and structural funding, Austria developed ÖPUL (programme as the main tool to fulfil the aims of structural and regional funding). Three different programme periods have been implemented so far (1995, 1998 and 2000). The general aim is to foster agricultural production with environmental guidance. Therefore structural funding is only accompanied by very broad constraints and enables farmers from all provinces of Austria to participate in the programme (Bundesministerium für Land- und Forstwirtschaft, Umwelt und Wasserwirtschaft 2000). Additional to these sources of financial support the province of Burgenland has been receiving substantial regional development funding from the European Union as objective 1 region since Austria joined the European Union in 1995. Funding for agriculture, forestry and environmental protection has been among the main target areas of objective 1 in Burgenland, and in the programme period 2000-2006 15.1 per

Table 14.2

Volume and value of Austria’s wine exports 1997-2005 1997

1998

volume value Canada

623

Czech Rep. 23.735 France Germany

–

1999

2000

2001

volume value volume value volume value volume

233

791

279

2.001

1.366

16.942

658

55.144 1.822 40.409

102

–

18.200

182

432 89

519 151

219

642

1.010 154.789 141

673

2002

value

volume

392

494

3.683

152.682

333

505

2003

2004

value volume value 252

2.237

458

3.740 193.889 5.909 185

572

212

volume 1.528 216.942 583

2005 value volume value 413

–

8.522 210.000 9.000 455

–

–

133.971 21.657 169.023 32.614 190.971 25.588 273.604 28.500 292.597 33.857 503.519 41.987 528.191 46.439 426.128 48.244 400.000 43.000

GB

1.166

377

726

276

828

268

410

Hungary*

2.284

109

210

36

785

90

32

Italy

1.292

723

11.019 11.006

1.190

1.355

1.432

354

655

598

31 448

1.743

571

243

313

404

553

854

1.317

1.300

3.228

102

18.058

595

6.348

489

–

50.742

1.761

27.713

1.566

21.878

6.130 28.000

1.200 – 7.500

Japan

1.857

714

2.391

984

1.716

764

942

525

1.038

632

1.028

627

1.079

669

1.401

1.185

1.000

900

Netherlands

3.448

508

5.570

1.261

535

241

7.133

1.030

639

262

1.176

433

1.276

510

1.921

713

9.500

1.200

Norway

214

151

89

83

175

118

365

219

185

170

234

159

902

255

1.481

533

1.300

400

Poland

11.317

779

4.786

429

4.474

397

1.422

169

2.601

299

2.996

213

12.278

665

16.680

749

–

–

Russia*

275

58

177

36

53

22

–

–

10

14

40

18

90

86

80

66

150

350

Slovakia

70

18

98

34

3.103

138

17.798

506

45.774

1.058

11.987

176

18.999

417

19.887

802

–

–

Sweden

8.629

1.216

4.783

697

3.683

716

1.571

394

1.379

406

788

366

1.160

426

313

251

–

–

Switzerland

2.452

1.163

2.487

1.190

2.867

1.680

4.296

2.702

4.257

2.758

5.576

3.553

10.614

4.310

8.790

5.220

–

7500**

USA

1.121

596

1.537

1.071

2.322

1.858

2.809

2.057

3.257

4.272

4.388

3.618

6.364

3.943

8.797

4.877

9.000

5.000

*Values in Euro, for 1997, 1998 in ATS = 13.76 Euro Source: Österreichisches Weinmarketingservice 2000, 138; 2002, 141; 2005, 207; Exportentwicklung 2000-2005, own presentation


254

cent of the total funding (€271 million for the programme period 2000-2006) was used in this area (Amt der Burgenländischen Landesregierung 2005: 68). Table 14.3 shows the distribution of wine market organization subsidies among the four wine growing provinces. Surprisingly, in terms of subsidies per hectare and per hectoliter, funding was highest in Styria rather than in the objective 1 region of Burgenland. These subsidies were used to restructure Austrian wine farms from lower quality to higher quality wines and to shift production closer to market demand, which means reduction of white and increase in red wine production. Parts of these funds were also used to permanently abandon vineyards (Rechnungshof: 1112). In general these funds represent ÖPUL funding, and differ between special wine producing farms and agricultural farms with lower than 75 per cent wine production; these farms can apply for other agricultural funding programmes like for land use. One has to bear in mind, though, that Burgenland, as mentioned above, received additionally structural objective 1 funding. Wine farming received so far approximately € 38.7 million in the program period 2000-2006. Adding the share of this figure per year to the data in Table 14.3, which compares the subsidies received in the various wine-farming provinces, Burgenland could more than double its subsidies because of the structural funds programme and also ends up with the highest amount of subsidies per hectoliter, when taking 2003 as an average harvest. Based on this empirical evidence it could be assumed that Burgenland should also have a much higher growth in quality and possibly quantity than the other provinces, if structural funds programmes are supposed to foster regional development by improving the performance of wine of this region on the market. Table 14.3

Wine market organization subsidies for Austrian wine growing provinces 2003 Burgenland

Number of wine farms

8,910

Lower Austria 16,221

14,647

Styria

Vienna

3,287

443

28,516

4,115

678

839,028

1,512,915

163,131

13,531

Subsidies 2002/2003 in million Euro

4.45

4.60

1.57

0.05

Average subsidies per wine farm in Euro Average subsidies per hectare in Euro

499

284

478

113

304

161

382

74

5

3

10

4

Wine growing area in hectares Wine harvest (hectoliter)

Average subsidy per hectoliter of harvest 2003 in Euro

Source: Rechnungshof 2005, 10; own calculations, own presentation


255

Objective 1 Funding as a Way Towards Structural Improvements for Wine Growers? Following the analysis of trends on the international wine market in terms of demand and price development, a shift towards production of high quality wine should be the aim of funding for Burgenland’s wine farmers, as demand for quality wines has been increasing and since the price development for quality wine is more favourable than for table wines. Accordingly the authority that grants funding to objective 1 projects names improvement of quality as the primary goal of objective 1 funding to wine farmers; this is especially of importance since there was a great need in catching up to higher quality standards in this province. Furthermore the production of wine from grapes, which can only be found in the region, is being supported (interview Billes). Marchhart (interview) from Regional Management Burgenland, the agency that is responsible for part of the administration and for monitoring of EU regional development funding in Burgenland, confirmed that funding for wine farmers aims at improving the quality of wine production. Marchhart stated furthermore that objective 1 funding is to advance the production and cost structures in wine farming. An analysis of project descriptions shows a focus on quality enhancement (better technical equipment, purchase of barrique barrels and storage rooms), extension

Table 14.4

Average production prices of quality wines by region 1998-2004

Product Burgenland Wine 1998 Bottle quality wine, white 2.48 Bottle quality wine, red 2.82 Wine 1999 Bottle quality wine, white 2.25 Bottle quality wine, red 2.59 Wine 2000 Bottle quality wine, white 2.28 Bottle quality wine, red 2.82 Wine 2001 Bottle quality wine, white 2.42 Bottle quality wine, red 3.10 Wine 2002 Bottle quality wine, white 2.41 Bottle quality wine, red 2.94 Wine 2003 Bottle quality wine, white 2.46 Bottle quality wine, red 3.03 Wine 2004 Bottle quality wine, white 2.53 Bottle quality wine, red 3.57 Prices in Euro, Bottle contains 0.7 liters No data available on Vienna Source: Statistics Austria, own presentation

Lower Austria

Styria

3.16 3.15

3.05 -

3.24 3.24

3.05 -

3.30 3.34

3.05 -

3.38 3.40

3.19 3.08

3.63 3.92

3.52 3.47

3.64 4.03

3.90 3.95

3.88 4.37

4.03 4.00

256


of production facilities and investment in marketing activities (sales rooms, wine presentations) (RMB). Therefore we use the development of the share of quality wine production as part of total wine production and the price levels of quality wine as indicators to whether Burgenland gained a competitive advantage over wine production in other regions in Austria, and whether funding achieved its goals. Export shares by wine growing region cannot be used as indicators because of the lack of available data. Comparison of Price Levels and Shares of Quality Wine Production among Regions As can be seen from Table 14.4, an increase in price level of quality wines from Burgenland can be observed. But prices both of white and of red quality wines in Burgenland are consistently lower than in Lower Austria and in Styria, and in most years during this time period the gap is even increasing. The average price of white quality wine per bottle from Burgenland reached 79 per cent of the price level of Lower Austria and 81 per cent of the price level in Styria in 1998. In 2004 Burgenland’s white wine came to only 65 per cent of the Lower Austrian and even only 59 per cent of the Styrian quality wine price levels. Similarly the price of red wine from Burgenland in 1998 came to 90 per cent of the level in Lower Austria; in 2004 this figure had gone down to 82 per cent. In contrast to this data Billes (interview) states that quality red wine prices in Burgenland are consistently above the levels of other wine growing regions. Table 14.5a shows which share of the different quality categories of wine were produced in different regions in Austria in the years 2000 to 2004; Table 14.5b shows the percentage changes of different quality levels in the same years. In this period Burgenland had the highest share of vintage and superior vintage wine of all Austrian wine producing regions. But in spite of significantly higher funding for wine farmers in Burgenland compared to the other regions of Austria, the share of the lowest quality segment – table wine – increased between 2000 and 2004 at the cost of the share of vintage and superior vintage wine. A similar situation can be observed in Lower Austria, but as discussed earlier, funding for wine farming in Lower Austria is clearly lower than in Burgenland. Vienna and Styria have – with the exception of the year 2002 – quite stable shares of top quality wine production, while Vienna receives significantly lower funds than Styria. Based on this data, no connection between funding and a higher share of quality wine production could be observed. Billes (interview) points out, though, that Austria’s strict wine law is the reason for this trend. There are maximum production levels per hectare for quality wine; in years with good harvests wine has to be graded down from quality to table wine, if the production per hectare exceeds the limits set by the law. Conclusion Based on the indicators share of quality wine production and price level, it can be concluded that Burgenland did not gain a competitive advantage over other wine

Table 14.5a Share of table wine, superior table wine and vintage wine produced in different regions in per cent

TW Burgenland Niederösterreich Steiermark Wien Kärnten Oberösterreich

2000 STW

VW

TW

2001 STW

VW

TW

5,07 2,47 90,6 9,68 2,89 85,09 5,16 7,31 3,78 87,96 14,2 7,43 77,19 8,34 6,22 9,58 83,21 5,58 9,49 83,8 7,48 8,9 12,09 79 7,89 15,02 76,96 34,9 22,22 29,62 48,14 28,9 21,05 50 – 23,6 1,81 74,54 23,52 13,2 63,23 10,45

2002 STW

VW

11,5 82,3 12,24 77,76 27,6 59,29 3,2 20,9 9,13 69,3 17,46 52,45

2003 STW

TW 7,87 9,71 3,5 3,69 12,8 2,85

VW

TW

2,03 88,17 3,42 85,5 8,1 85,68 10,5 83,36 23 64,1 8,12 88,1

9,2 14,2 3,7 6,08 12,6 4,7

2004 STW

VW

2,62 85,4 5,5 78,9 9,9 84 11,2 79,56 6,8 81 13,9 69,93

Baseline: total production in respective region TW = table wine STW = superior table wine VW = vintage and superior vintage wine

Source: Der Österreichische Wein, various issues, own calculations, own presentation

Table 14.5b Percentage change in percentage production of different wine qualities in various provinces TW Burgenland Niederösterreich Steiermark Wien Kärnten Oberösterreich

2001 90,93 94,25 -10,29 -11,35 30,06 -0,34

2002

2003

2004 STW

-46,69 52,52 16,90 -41,27 16,43 46,24 34,05 -53,21 5,71 342,33 -89,43 64,77 – – -1,56 -55,57 -72,73 64,91

Source: own calculations, based on Table 5a.

2003

2004

17,00 297,92 -82,35 96,56 64,74 -72,06 -0,94 190,83 -70,65 24,23 -78,70 228,13 -28,93 -56,63 151,92 629,28 32,27 -53,49

2001

2002

29,06 60,82 22,22 6,67 -70,43 71,18

VW

2001

2002

2003

2004

-6,08 -3,28 7,13 -3,14 -12,24 0,74 9,95 -7,72 0,71 -29,25 44,51 -1,96 -2,58 -72,84 298,85 -4,56 3,86 38,60 -7,50 26,37 -15,17 -17,05 67,97 -20,62

258


producing regions in Austria – in spite of clearly higher funding available through the objective 1 programme. A factor that may improve the competitive position of Burgenland’s wine production is the fact that – due to favourable natural conditions – the share of red wine production is higher than in the other Austrian wine growing areas. As mentioned above, both nationally and internationally demand for red wine is stronger than for white wine. The EU has been financially supporting the conversion from white to red wine production. Burgenland converted the biggest areas from white to red wine among Austria’s wine regions (Österreichische Weinmarketing Servicegesellschaft 2005: 78-83) – thereby indicating that it gained a competitive advantage through EU agricultural funding (not objective 1 funding). As for the overall development of Austrian wine internationally, the data presented above shows that part of the positive performance of Austrian wines is its relatively stable position on the home market, especially in the price levels above the low budget segments. The positive overall development on the export markets can be attributed to the high quality level of wine. Staggl (interview) from the Austrian Wine Marketing Association (Österreichische Weinmarketingservicegesellschaft) furthermore states the high level of education of the young generation of Austrian wine farmers and marketing efforts which led to positive international press coverage; in addition to that the style of Austrian wine (strong emphasis on fruity flavours) and wine from grapes that are only grown in Austria give Austrian wine a unique selling position. Given these factors, which apply to wine from Burgenland as well as to wine from other regions, the effects of objective 1 funding in improving the competitive position of wines from Burgenland compared to the other wine producing regions of Austria have yet to reach their potential. References Altman, M. (2003). ‘Staple Theory and Export-led Growth: Constructing Differential Growth’, Australian Economic Review 43: 3, 230-255. Amt der Burgenländischen Landesregierung, Ergänzung zur Programmplanung Ziel 1- Burgenland 2000-2006, Version BA: 2005. http: //www.burgenland. at/euservice/Images/ErgaenzungProgrammplanungsdokument_2006_tcm13161322.pdf (accessed 03/29/2007). Arestis, Ph. (ed.) (1988). Post-Keynesian Monetary Economics. Aldershot: Edward Elgar. Armstrong, H. and J. Taylor (2000). Regional Economics and Policy. Malden / Oxford / Carlton: Blackwell. Baldwin, R. and C. Wyplosz (2004). The Economics of European Integration. Berkshire: Mac Graw-Hill Publishing. Bourne, A.K. (2003). ‘Regional Europe’, in: Cini, M. (ed.). Bundesgesetz über den Verkehr mit Wein und Obstwein (Weingesetz 1999), BGBl. I. Nr 141/1999. Chick, V. and Sh. Dow. (1988). ‘A Post-Keynesian Perspective on the Relation between Banking and Regional Development’, in Arestis, Ph. (ed.) (1988). PostKeynesian Monetary Economics. Aldershot: Edward Elgar.


259

Cini, M. (ed.). (2003). European Union Politics. Oxford: Oxford University Press. Clarke, O. (2003). Gyldendals Vinatlas. Oslo: Gyldendal. De Benedictis, L. and M. Tamberi (2001). A Note on the Balassa Index of Revealed Comparative Advantage. Working Papers Universita’ Politecnica delle Marche, Dipartimento di Economia No 158 (Italy). European Commission (2002). Ex-post Eevaluation of the Common Market Organization of wine. Final Report, Tender AGRI/Evaluation/2002/6 (accessed 03/29/2007). http: //europe.eu.int/comm/agriculture/eval/reports/wine/fullrep_ en.pdf. European Union (2005). Treaty establishing the European Economic Community, EEC Treaty – original text. http: //europa.eu/scadplus/treaties/eec_en.htm (accessed 03/29/2007). European Commission (2006). ‘WINE Economy of the Sector’, Working Paper, Directorate-General of Agriculture and Rural Development, Feb. 2006. European Commission (no year). Financial Programming and Budget. http: // ec.europa.eu/budget/index_en.htm (accessed 04/01/2007). Faltl, D.F.J. (2001). Vermarktungsstrategien der Weinwirtschaft im Raum Wachau – Kremstal – Kamptal, Thesis. Vienna: Vienna University of Economics. Ferto, I and L.J. Hubbard (2001). ‘Regional comparative advantage and competitiveness in Hungarian agri-food sector’. Working Paper 77th EAAE Seminar, No. 325 Helsinki. Jany, F.R. (1988). Österreichisches Weinmarketing nach dem Weinskandal 1985, Darstellung und Entwicklung neuer Strategien – Ein pragmatischer Zugang, Thesis. Vienna: Vienna University of Economics. Laursen, K. (1998). Revealed Comparative Advantage and the Alternatives as Measures of International Specialisation. Working Paper Danish Research Unit of Industrial Dynamics (DRUID) No.98-30. LBG Wirtschaftstreuhand- und Beratungsgesellschaft (2005). Weinbaubericht 2004, Betriebwirtschaftliche Erhebungen und Statistiken über den österreichischen Weinbau. Vienna: LBG. Li, H. et al. (1998). ‘Testing the Neoclassical Theory of Economic Growth: Evidence from Chinese Provinces’. Economics of Planning, 31, 117-132. Maier, G. et al. (2006). ‚Regional- und Stadtökonomik 2, Regionalentwicklung and Regionalpolitik’, 3rd Edition. Wien: Springer. Österreichische Weinmarketing Servicegesellschaft (ed.) (various years). Dokumentation Österreichischer Wein, Wien www.weinausoesterreich.at Parr, J. (1999). ‘Growth-pole Strategies in Regional Economics Planning: A retrospective View, Part 1. Origins and Advocacy’. Urban Studies 36: 7, 1195-1215. Rechnungshof (2005). ‘Wahrnehmungsbericht des Rechnungshofes. Lehrerpersonal, Maßnahmen betreffend das Produktionspotential für Wein’, Reihe Burgenland, 2005/1, Zl oo1.501/083-E1705, Wien. Regional Policy (2007). Regional Policy – Inforegio. http: //ec.europa.eu/regional_policy/index_en.htm (accessed 03/25/2007). RMB (no year), Schwerpunkt “Land- und Forstwirtschaft, Naturschutz”. www.burgenland.at/euservice/Images/Land-%20und%20Forstwirtschaft%2C%2 0Naturschutz_tcm13-164172.pdf (accessed 05/04/2006).

Schnepf, R. (2003). ‘The International Wine Market: Description and Selected Issues’, CRS Report for Congress, Order Code RL32028. Spitzer, A. (2002). The Wine Pact: ‘New World’ Wines Change the Industry. www. american.edu/TED/wine-pact.htm (accessed 04/29/2006). Statistik Austria (various years) Land- und forstwirtschaftliche Erzeugerpreise. Wien Umweltministerium für Land- und Forstwirtschaft, Umwelt und Wasserwirtschaft (2000). ÖPUL 2000, Sonderrichtlinie für das Österreichische Programm zur Förderung einer umweltgerechten, extensiven und den natürlichen Lebensraum schützenden Landwirtschaft, ZI.25.014/37-II/B8/00, Wien. Interviews Billes, Wolfgang, Burgenländische Landesregierung (provincial government Burgenland), department agriculture, 05/23/2006 (telephone interview). Marchhart, Susanne, Regional Management Burgenland, 05/23/2006 (telephone interview). Staggl, Susanne, Österreichische Weinmarketingservicegesellschaft (Austrian wine marketing association), 05/23/2006 (telephone interview).

Chapter 15

Towards a Post-Communist Welfare State? Juraj Draxler

The post-communist members of the EU have seen significant changes in their welfare regimes. Taxation has probably made the biggest headlines. While social policies can theoretically be paid for by various taxation mechanisms, the widespread adoption of flat-rate income tax has been seen as the hallmark of the overall ‘liberalization’ of state policies. The state treats everybody on one, ‘equal’ and fully quantifiable basis – income. Fifteen years ago, all of these countries started the transformation process by adopting progressive taxation and a strong caring role of the state. In recent years, however, five of the ten post-communist countries that became EU members in 2004 and 2007, became part of the ‘flat-tax revolution’.1 Seven of these countries have partly privatized their pension systems.2 Social assistance has increasingly become means-tested and benefits have been decreased. There are widespread attempts to privatize healthcare. These developments have two ways of impacting the European integration process. On the one hand, the building of a critical mass of support for certain policies among Member States can lead to a paradigmatic shift in the public and policymaking opinion in the other EU countries. The second channel of impact is more direct: the adoption of EU-level measures, voted in by the national governments. Of course, there is no clear borderline between the two processes. The efforts to identify best-practices through such soft-policy mechanisms as the open method 1 Estonia, Latvia, Lithuania, Romania and Slovakia have a flat-rate system for personal income tax. Slovakia actually has an overall single tax rate (with very minor exceptions) for personal and corporate taxes, as well as for the VAT. It is the only country in the OECD to have a flat rate personal income tax (the Baltic states and Romania are not the members of the OECD). 2 The countries are Bulgaria, Estonia, Hungary, Latvia, Lithuania, Poland and Slovakia. These countries adopted the model sponsored by the World Bank, where the public pension system is split into two ‘pillars’. The first remains publicly administered and pay-as-you-go, the second is comprised of individual accounts whose assets are invested by private fund managers. Participation in both pillars is mandatory after a certain transition period. This does not fully apply to Lithuania, where the option to split contributions between the two pillars is voluntary. The World Bank has also advocated coming up with strong incentives to establish a third pillar of supplementary pension saving. Third pillar saving is, however, very small in these countries.

262


of coordination (OMC) mean that social policies can be translated into the contexts of other countries with the help of, but not the direct management by, the EU institutions. One also needs to look at the long-term aspects of social policies. The changing patterns of social cohesion can help create better or worse governance, make Europe more or less competitive, and make people more or less willing to support the European integration project. This contribution suggests a certain methodological framework for capturing the developmental logic of the post-communist welfare state. New Member States have recently adopted radical reforms. Further research should show if this is a transient phenomenon or whether this marks a long-term trend within the EU. The key principles of such research will be described here. Economic Logic Matters The post-communist members of the EU face three particular sets of socio-economic challenges. First, they are establishing themselves as fully-fledged capitalist economies. The introduction of the basic free-market framework has been completed – these countries now have full legal support for private property relations, and the private sector accounts for the dominant part of economic output. However, in terms of the polarization of capital and labour relations, or income stratification linked to prolonged capital accumulation, these countries have arguably not fully awoken to the realities of capitalism. Secondly, the post-communist states have found themselves at a certain periphery position towards the core, the West. Their growth is strongly driven by delocalization of labour-intensive production from the EU-15 countries. In these small, extremely open economies, very little impetus for growth comes from endogenously created domestic demand. Thirdly, these countries are at a different point on the trajectory towards establishing post-industrial, knowledge-based economies than their Western counterparts. The economic demands on these countries provide the right background for both explaining the developments in the recent past, and for assessing the viability of current welfare models. They should also provide input into the models of political economy of these countries, which should help understand how economic and political power shapes public policy towards particular arrangements. One approach that takes a very holistic view of society, with careful regard for the interplay between the economic and the social, is the French regulation school. Of central importance here are the concepts of Fordism and post-Fordism, describing qualitatively different, successive stages of operations of capitalism. The concepts that the Regulationists use for describing how far an economy is developed as a Fordist economy, can be used for the analysis of post-communist economies. A capitalist economy is a set of diffuse relations that are bounded, at the aggregate, by the circuit of production and consumption. Central to the functioning of this circuit are two processes of constant reproduction: reproduction of the labour force and reproduction of capitalist relations as such. In the warfare states of the period just preceding the Industrial Revolution, economic growth was already a noticeable

Towards a Post-Communist Welfare State?

263

phenomenon. But it was affected through mercantilist policies (hoarding of gold through trade for equipping armies) and armed struggle. The modern state, in contrast, is a welfare state. It intervenes in lives of individuals through various policies to integrate the circuit of capital and help the reproduction of the labour force. The attempts to describe the evolution of social protection in the post-communist bloc that fail to take into account these basics will inevitably be wanting on capture of logical long-term trends, and will likely lack predictive power. The Emergence of the Post-Communist Liberal Welfare State Tax reforms, radical overhauls of pension systems, and decreasing generosity of social transfers make for most of the headlines. However, the post-communist states also possess some other attributes that make them look like the real champions in the global, flexibility-demanding economy (Draxler 2006a). Institutional rigidities in the labour market are few. There are practically no occupational pensions, to hamper mobility across firms or sectors (Pragma 2005). Industrial actions are scarce, trade unions relatively weak, tripartite framework playing an increasingly marginal role (Adam 2004: 10). On some quantitative measures, the picture can be mixed. The overall level of social protection outlays, nominal and effective payroll tax rates, outlays on healthcare and other quantitative measures fluctuate over time, for example with the political cycle. For the purposes of cross-country comparison, they do not present clear enough profiles to make it possible to identify clusters within the group of post-communist countries. On the other hand, we see clear willingness on the part of the postcommunist countries to embrace radical, ‘paradigmatic’ reforms. There are two exceptions, Slovenia and the Czech Republic, and this will be discussed below. So, the post-communist Member States seem to be now oriented towards a very ‘liberal’ welfare state-and-taxation mix. Why is this happening? It would be possible to describe this as a logical continuation of a trend observed in the region ever since the fall of communism. Three waves of early transition policies can be observed, each attended by hopes of swift delivery in terms of creating a fully functional, efficient market economy. First, fast price and labour market deregulations were implemented. Especially price deregulation sometimes happened as a ‘big-bang’, when most prices would be deregulated from one day to another. Second, privatizations were looked at as the natural next step in this process. Thirdly, governments started to look systematically at attracting foreign direct investment. This wave has, of course, heavily overlapped at first with the privatization process. In this transition process, the respective countries did manage to fairly substantially overhaul their formerly centralized command economies. Also, by the 2000s, some of these countries did manage to post rates of growth that looked good compared to Western European counterparts. However, the convergence still looked painfully slow and fruits of growth were very unequally distributed. Unemployment levels remained high, with official rates in Poland and Slovakia, the most extreme cases among the New Member States,

264


hovering at around 20 percent by the time of their accession to the EU. It is no wonder, then, that policy-makers in these countries increasingly started to look at welfare policies as the one area where novel ways of doing things could effect economic changes. The welfare policies adopted at the beginning of the transition process were an uneasy mix of the old approach of state-provided, highly centralized and inflexible policies, mixed with some more ‘free market’ approaches. In reality, the added flexibility often served politicians to hijack welfare mechanisms for short-term political purposes. A typical example would be the use of early retirement policies to get rid of overemployment, especially when regarding the segments of labour force characterized by high inflexibility. This politically convenient solution has helped to create the long-term problem of fiscal sustainability of pension systems. Incremental changes to welfare mechanisms proved difficult. They often initiated resistance by groups that were seemingly going to lose. Instead of parametric reforms, policy-makers found ‘reform bundling’ could be a much more attractive option (Müller 2003). Introducing reforms as complete packages, touted as radically new programmes, had some clear advantages. The most spectacular example has been the introduction of ‘multipillar pension systems’ (World Bank 1994) in Eastern Europe. In place of reforming pay-as-you-go systems, governments opted for splitting the public pension system into a public and a privately administered, fully-funded part. This came on the heels of a World Bank Report recommending the system. The report itself has been criticized for unreasonably extolling the alleged virtues of funding (Independent Evaluation Group – World Bank 2006). Yet, policy-makers were able to sell it successfully to citizens. They exploited the myths relating to this policy option, particularly the alleged capacity of fully-funded systems to cope better than pay-as-you-go systems with demographic ageing (Orszag and Stiglitz 1999; Barr 2000). In terms of practical politics, this option also meant that the public relations effort to support the reform was not managed by the not-so-effective local political machines, but rather by the private companies that got licenses to administer private pension accounts. These were more often than not branches of multinational financial conglomerates with strong marketing know-how. Instead of facing resistance to changes, policy makers found campaigns too successful. Many people joined the new system even though it was objectively not in their interest, leaving savings period to short for accumulating enough pension wealth. This was at the most dramatic in the case of Hungary, where the reform was designed in such a way that people switching also gave up some rights accumulated previously (Simonovits 2005: 12). This sparked fears of adequacy of old-age income in the future. On the other hand, with too many people paying contributions into the second pillar, the transition to the new system became too costly, as funds were now missing for payouts in the first pillar. In Slovakia, where the reform was more radical than elsewhere, creating a second pillar as big as the first, this sparked acrimonious and protracted debates once a new government was voted into power in June 2006.3 3 In Slovakia, an employee pays 9 per cent of gross wage into the first pillar, and equal rate, 9 per cent, to the second pillar. There is also a 4.75 per cent charge which goes into a


265

The process of adoption of radical social security reforms in post-communist Europe can thus be described in various ways. As a simple heuristic, one can identify, as above, the search and trial processes involved. This comes out especially clearly when viewed in parallel with the political process, which also proceeded in certain steps: at first, roundtable talks with the old elite about the handover of power, then constitution-building. To add some descriptive power, one can capture effects of evolving institutions and power structures. As outlined above, for example, one can identify certain proneness to radical solutions as stemming from limited public relations know-how, and also technical expertise for handling subtler restructuring of the local political machines. This has been done (Hausner et al 1995; Müller 2003). What seems to be lacking in research, however, is a systematic review of the deeper needs of the economy, and the effect on the local welfare state. The post-communist countries are in a specific situation. First, there is the transition process, the building up of capitalism. Secondly, these countries have rather different structure of economy when compared to ‘old’ Europe, the EU-15. Although the service sector has expanded rapidly, in other aspects they hardly qualify as post-industrial economies: small and medium enterprises have low productivity (Janovskaia 2006), research intensity levels are much below Western European ones, and economic growth is very much driven by foreign capital inflows into traditional industries such as engineering, metallurgy or chemistry. This leads to another consideration, which is the periphery relation of post-communist Europe vis-à-vis the West – in other words, these countries seem to rely rather heavily on delocalization from the core (Barysch 2005). The need to understand the evolution of Eastern European social protection in such a multidimensional space has produced some calls, for example, for adding the ‘post-communist welfare regime’ to the traditional typology of social models derived from Esping-Andersen (Giddens 2005: 99). Some attempts to locate the most recent social protection mechanisms on a wider map created by certain quantitative characteristics have been made (Soede and Vrooman 2006). So far, however, there seems to be a lack of willingness to go beyond such descriptive exercises and tackle the problematic through a more structural analysis. Frigid Economies as a Reason for Half-Hearted Social Protection? One often meets the suggestion that the post-communist states ‘cannot afford’ a generous welfare state. This view is equivalent to seeing the welfare state as practically nothing more than a mechanism for dividing a pie, the national product. However, social protection is much more than that. First of all, most of what constitutes the welfare state is insurance (unemployment insurance, also health insurance, if one takes a broader definition of the welfare state) and consumption smoothing (the pension system). Insurance and consumption smoothing constitute the ‘piggy bank’ function of the welfare state (Barr 2001). In ‘liberal’ countries like

‘solidarity fund’ which serves a curious double purpose of pre-funding the first pillar and providing guaranty payments for the event of second pillar bankruptcies.

266


Britain, lifetime redistribution of income between individuals actually accounts for less than one third of social protection expenditure (Barr 2001: 2), and this is similar even in some heavy welfare spenders like Denmark (Sorensen, Hansen and Bovenberg 2006). But even lifetime social transfers have an important productive function (Begg et al 2004). In fact, econometrically speaking, it does not make sense to see welfare spending as a cost to the economy (Lindert 2002). The analysis of post-communist developments has to go beyond misleading notions of alleged cost. Social protection makes risk-taking possible (Draxler 2006b: 22), both enterpreneurial (Castells 1998) and in the labour market, which is especially important for open economies (Rodrik 1998). The challenge is to explain exactly the post-communist political economy where rise in the openness of economies (see Fig. 15.1) goes parallel with efforts to scale down social protection. A few hints might help. First of all, the local economies rely on islands of prosperity, constituted by foreign-owned manufacturing companies and the closely related services (Janovskaia 2006). We can also look at firms, rather than sectors. The striking feature of all EU postcommunist economies seems to be the low productivity of small and medium-sized enterprises compared to the large companies (Fig. 15.2). This taken together already creates a picture of economies strongly reliant on providing cheap labour to investors in manufacturing. Add to this very low levels of investment in research and development (R&D). Research intensity of these countries is extremely low, only in Slovenia and the Czech Republic is investment into R&D higher than one percent of GDP, well below EU average (Fig. 15.3). Moving onto the wider picture of political economy, one can detect high levels of rent-seeking (EBRD 2005: 69-70). This would indicate bottlenecks for expansion of a truly effective social protection. To complete the picture, and illustrate the nature of economic development as a series of fits and starts, one can look at the financial sphere. Some of these countries have experienced phenomena clearly illustrating the challenge of creating a fully integrated regime of capital accumulation. This was most visible in either high inflation (where central banks implemented lax monetary policy) or very high real interest rates on bank deposits in mid-1990s in some countries. There are other phenomena, which also illustrate the uneasiness of accumulation, such as public finance problems. So, what these countries ended up with was a regime of increasing openness, decreasing taxes (Eurostat 2006: 35), and, related to this, modified and generally weakened quality of social protection. Some argue that overflexible labour markets in post-communist EU might be decreasing willingness to take risks by the labour force (Cazes and Nesporova 2004). Others state that low taxes deprive the states of necessary long-term investments in human and social capital (Janssen 2005). In order to fully explore these and similar hypotheses, it is necessary, again, to draw a comprehensive picture that would sketch out the room of maneouvre of the economy and the political sphere of the country. Indeed, the impact of some recent


267

Figure 15.1 Trade openness measured by total of exports and imports as per cent of GDP. The post-communist EU members are clearly among the leaders in the table, in the following order (2005): Lithuania (LU), Estonia (EE), Slovakia (SK), the Czech Republic (CZK), Hungary (HU), Slovenia (SI), Latvia (LT), Poland (PL). Notice also the dramatic increase in openness since 1995. Source: European Commission, AMECO database (2005).

reforms has not been clearly documented.4 Establishing a broader framework of research would help outline which areas are key. The picture is not uniform. Slovenia and the Czech Republic clearly stand out. They are richer than the rest. They have not implemented any of the radical reforms en vogue in the East (particularly not the partial privatization of the pension provision and the flat rate income tax). They invest more in R&D. This only underscores the 4 See, for example, World Bank note on methodological problems in assessing the impact of reforms in Slovakia (World Bank 2005).

268


Figure 15.2 Share of small and medium-sized enterprises in total employment versus their share in total added value. The difference shows low productivity of SMEs in post-communist countries as opposed to some Western economies. Source: SME and Entrepreneurship Outlook 2005, cited from Janovskaia (2006)

point: the need to research the different paths the countries in the region have taken. Is the different orientation in social protection of Slovenia and the Czech Republic the result of them being wealthier? And, if so, would this mean that other countries from this group would revert to more generous social protection once they reach a certain level of development? Or is the story more complicated? Let’s start with the ways welfare states are usually classified depending on the political economy behind them. Welfare State Classifications There are several ways of classifying welfare states. Some simple dichotomies describe how the welfare benefits are targeted. In a residual welfare state, the object of social protection is to provide a minimal safety net that keeps individuals out of abject poverty. The universalist welfare state, on the other hand, takes but also gives much more freely. Here, the piggy bank function (Barr 2002) of income


269

Figure 15.3 R&D intensity (R&D as per cent of GDP) of EU countries, USA, Japan and China (2003). Source: Eurostat (2005).

and consumption smoothing – in other words, lifetime redistribution of income – becomes arguably much more important than redistribution for the benefit of the few very poor. In a similar vein, the label of Beveridgean welfare state describes the one where benefits are flat rate and means tested, while in the Bismarckian model the aim is to keep up the standard of living of individuals (by, for example, giving relatively generous pensions), and benefits are tied to status. The most famous comprehensive taxonomy comes from Gøsta Esping-Andersen, the social scientist of Danish origin. He made a simple quantitative analysis of eighteen countries, and divided these into three groups of six based on the level of their decommodification of labour power. He then described the institutional characteristics and path-dependencies of these ‘three worlds of welfare regimes’ (Esping-Andersen 1990). There were many other methodologically similar attempts. Some have added many more variables and performed sophisticated cluster analyses to come up with a list of models, ranging from the Antipodean to Bismarckian (Jessop 2002: 61-66). Some studied in the similar way only certain components of the welfare state, for example the pension system (Soede and Vrooman 2006). The

270


power of these classification exercises comes from the fact that they yield an easy heuristic schema, essentially a set of ideal types. The problem, on the other hand, with these classificatory efforts grounded in descriptive statistic is that they fail to capture the developmental logic of social welfare mechanisms. As a result, when a new set of conditions necessitating changes opens up, what happens is that, at best, the set is extended to add a new model. Giddens (2006) has recently mentioned the need to add a post-communist welfare regime. In the meantime, however, even the original set is becoming obsolete, as Esping-Andersen himself has acknowledged (2000). The French Regulation School as a Methodological Framework For the French Regulation School, one of the key concepts is ‘regime of accumulation.’ Building on its Marxist roots, the School thoroughly conceptualizes capital as ‘value in motion’, a strictly social relation (Aglietta 2000: 37-110). Value itself is a social utility stemming from the division of labour (2000: 42). In this space, the regime of accumulation determines how capital is constituted in its transient forms. Among other things, it determines how social labour becomes wage labour. Crucial here is the wage relation, where market forces do not strict determine wages. (2000: 45). The school insists on not treating wage labour as other commodities (2000: 46). Labour power is reproduced outside the market (2000: 151). It is being integrated into the capital circuit by way of social consumption norms (2000: 152). In a typical post-war, relatively closed economy, intensive accumulation (extraction of surplus value via rising productivity, driven mostly by technical progress) fully takes precedence, in contrast to earlier regimes, over more primitive, extensive accumulation of capital (though wars or other types of appropriation and expropriation). This is an economy of a decidedly ‘industrial’ nature: it is relying on large-scale industrial operations driven by economies of scale. These concentrate massified workforce, locked in life-time assembly line or semi-assembly line jobs. The fully blown regime of this type is called Fordism, and the French Regulation School formulates a multidimensional framework to describe this socio-political regime (see Box 15.1). This post-war regime is characterized by a ‘developmental rhythm’ (Aglietta 1999: 154) where wages grow in line with accruals to productivity and growth is underpinned by steady expansion of credit helped by Keynesian state policies and by social reproduction and consumption assisted by the welfare state. This ‘structural coupling’ of economic and social policies has led some authors affiliated with the school to theorize a Keynesian Welfare State as a typical state form necessary for the existence of the Fordist forms of accumulation (Jessop 2002). In developed economies, Fordism increasingly gives way to post-Fordism. Here, the technical content of products becomes much easier to modify thanks to both fast pace of technical change (driven by ICT) and change in organization of supply chains due to highly developed manufacturing sector. Manufacturing methods and capital goods are fairly standardized. But also transportation and telecommunication advances


Box 15.1

271

Fordism described by analytical dimensions of the French Regulation School (Jessop 2002, 56-58).

A distinctive type of labour process. Mass production is the main source of economic dynamism, centering on assembly line production operated by semi-skilled labour. A stable mode of economic growth. Virtuous circle of growth, where rising incomes are linked to productivity, which itself is based on economies of scale. Demand increases constantly with steadily rising wages. A mode of economic regulation. Monetary and credit policies secure effective aggregate demand. Wage bargains are struck in key sectors of industry, from which the ‘going rate’ spreads to other sectors of the economy. The state plays crucial role in promoting mass consumption and preserving balance between labour and capital demands. A pattern of societalization. This is based on nuclear family, urban and suburban, to which the market caters by providing standardized goods. The state provides bureaucratized collective goods.

make it easy to find suppliers (for some industrial segments) anywhere around the globe. Both of these decrease the relative importance of the manufacturing base and economies of scale. Profit is increasingly driven by economies of scope (the ability to achieve quick variation) and economies of networks (in sourcing supplies, for example). Also, services become much more important than in the Fordist economy. Some authors argue that the state tends to assume more flexible, individual-oriented ways of social protection, which some conceptualize an Schumpeterian Workfare State (Jessop 2002). Analyzing the Post-Communist Welfare State: the Future The advantage of Regulationist analysis is that it very clearly focuses on the crucial axis production/consumption: how goods are produced, and how are they consumed. This is a good starting point for developing a systematic inquiry into a particular country’s regime of accumulation. At the basic level, the aim is to identify how much the country is a Fordist regime, and how much it is on the way to developing a post-Fordist economy. Secondly, it is important to identify how the welfare regime is congruent with the country’s level and form of economic development.

272


Step 1. Structural description of the society in terms of four levels: •

•

• •

dominant type of labour processes. Here, it is important to describe how much the country is dependent on skilled, semi-skilled and highly skilled labour processes. The statistics used would be: structure of skills in the labour force (and their employment), and structure of industry: share of manufacturing in the economy, share of labour intensive production. mode of economic growth. Description of how much wages and productivity gains are kept in line; trends in the development of real returns on financial assets; description of development of personal disposable income and other forms of effective demand. What is important here is the description of trends, and analysis for how smooth the accumulation process is. mode of economic regulation. What determines ‘going rates’ of wages in different sectors of the economy: bargaining, pressures of the global market? How is the state promoting mass consumption through legal norms (mortgages, etc)? patterns of societalization. How key is nuclear family to the accumulation process? How much is consumption determined by the division between agricultural and urban society. What are the consumption norms developing?

Step 2. Description of the type of social protection and assessment of its appropriateness to the accumulation process. What is striking at the first glance is the fact that the post-communist member states exhibit many traits of a Fordist economy. In particular, they still heavily depend on large-scale industrial operations as their engine of growth (Draxler 2006a). On the other hand, their mode of accumulation is definitely not Fordist. They operate as extremely open economies, and consequently the pressure of the global market dictates the wage rate more than by the considerations of medium term productivity developments, underpinned by social bargaining. The domestic demand in these open economies is far less important than the demand of the outside markets. These countries serve to produce parts of global value chains, rather than being parts of substantial lengths of these value chains. Nor are these countries very close to developing post-Fordist, heavily flexible and R&D-driven economies. It is precisely this peculiar quality of having a sort of late-industrial but by now means Fordist economy, and seemingly being on a peculiar path to post-Fordism that makes the post-communist welfare state an interesting object of inquiry. The process of analysis outlined above should provide a clear focus for a description that integrates institutional analysis, analysis of the context in which the economy operates and a certain historical perspective. It is precisely the need to describe structures and long-term trends in one framework that has apparently been missing in the research on the post-communist welfare state. The approach chosen provides a broader framework, of course, leaving a lot of room for more detailed analysis within the larger paradigm. The second step of the analysis, description of how the existing social protection mechanisms feed into the four-fold level of socio-economic operation is equally demanding, particularly since it calls for the whole welfare regime to be taken into


273

account, not just its parts. Social protection and healthcare should be analysed, as well as the tax regime. This will give an indication of which trends given by the economic base are being strengthened by this larger mechanism determining the type of social reproduction. Conclusion In order to capture the developmental logic of the post-communist state, it is necessary, first and foremost, to see in what key dimensions the economy is operating. This contribution argues that there are three such dimensions. First, the transition of these states from command economy to capitalism; second, the periphery relation towards the West; and third, the peculiar structure of the economy, which exhibits some post-industrial trends, but generally remains very much dependent for growth on industrial, large-scale plants and semi-skilled work. A general framework of inquiry should be set up that helps to develop a dense picture of the political economy of these countries. This contribution has suggested implementing the framework used by the French Regulation School to analyse the general socio-economic regime of the country. We have shown how in early transformation, the mechanisms of social protection were used to displace conflicts arising out of radical economic restructuring. In further stages of transformation, many of the post-communist countries embraced whole-heartedly the model of growth based on delocalization of production from the West. This model means that the focus is squarely on the utilization of cheap and relatively skilled labour force. The labour market is strongly liberalized, and even where some formal institutional constraints exist they are more than made up for by lack of effective organization of the labour force for bargaining purposes. Innovation depends on technological transfer rather than domestic R&D. In parallel with adopting this growth model, the post-communist members of the EU have, with some exceptions, moved towards a rather ‘liberal’ type of the welfare state-taxation mix, characterized by moves such as the introduction of the flat-rate personal income tax or partial ‘privatization’ of the pension system. Two countries that clearly stand outside this trend are Slovenia and the Czech Republic. They have not implemented either of the two radical ‘headline’ reforms popular in the region – flat-rate income tax or partial privatization of the pension system. They also have significantly higher levels of R&D than the other countries on the group, thus relying much more on drivers of growth other than labour utilization. Low research intensity, dependence on FDI into manufacturing for growth, and other aspects suggest that the ‘radical reformers’ Estonia, Hungary, Latvia, Lithuania, Poland and Slovakia and the newest members Bulgaria and Romania have not just the policies but also a certain economic base common. It should be the task of further research to establish to what extent the particular economic position and the welfare state-taxation mix are structurally coupled and therefore likely to persist over time.

274


References Adam, Z. (2004). ‘Autonomy and Capacity. A State-Centred Approach to PostCommunist Transition in Central Europe’. Working Paper no. 40, Centre for the Study of Economic and Social Change in Europe. London: School of Slavonic and East European Studies. Aglietta, M. (2000). A Theory of Capitalist Regulation: The US Experience. London: Verso. Barr, N. (2000). ‘Reforming Pensions: Myths, Truths, and Policy Choices’. IMF Working Paper 139. Barr, N. (2001). Welfare State as a Piggy Bank. Oxford: Oxford University Press. Barysch, K. (2005) ‘East versus West?: The ESM after Enlargement’. Progressive Politics. 4: 3, 48-55. Begg, I. (2004). The Costs of Non-Social Policy. Final Report. Brussels: DG Employment and Social Affairs of the European Commission. Castells, M. (1998). End of Millenium. The Information Age: Economy, Society and Culture. Vol. III. London: Blackwell. Cazes, S. and A. Nesporova (2004). Labour Markets in Transition: Balancing Flexibility and Security in Central and Eastern Europe. Geneva: International Labour Office. Draxler, J. (2006a). ‘Eastern Europe: Post-Industrial Welfare State for Industrial Economies?’. Paper presented at MC2 Conference, Manchester University, April. Draxler, J. (2006b). ‘Globalization and social risk management in Europe: A literature review’. ENEPRI Research Report. Brussels: Center for European Policy Studies. Esping-Andersen, G. (1990). The Three Worlds of Welfare Capitalism. Cambridge: Polity Press. Esping-Andersen, G. (2000). Social Foundations of Post-Industrial Economies. Oxford: Oxford University Press. Eurostat (2006). Structures of the Taxation Systems in the European Union. Brussels: European Commission, DG Taxation and Customs Union. Hausner, J., K. Nielsen and B. Jessop (1995). Strategic Choice and Path-Dependency in Post-Socialism: Institutional Dynamics in the Transformation Process. Aldershot: Edward Elgar. Independent Evaluation Group-World Bank. (2006). Pension Reform and the Development of Pension Systems: An Evaluation of World Bank Assistance. Washington, DC: The World Bank. Janovskaia, A. (2006). ‘Ownership structures in Central and East European Manufacturing and its Integration into the International Value Chains’. Paper presented at UACES Student Forum conference. University of Oxford, April. Janssen, R. (2005). ‘Social Europe and the Challenge of Globalization’. European Economic and Employment Policy Brief No. 6. Brussels: ETUI-REHS. Jessop, B. (2002). The Future of the Capitalist State. Cambridge: Polity. Lindert, Peter H. (2002). ‘Why the Welfare State Looks Like a Free Lunch?’. Seminar presentation at Harvard University.


275

Müller, K. (2003). Privatizing Old-Age Security. Cheltenham: Edward Elgar. Orszag, P. R. and Stiglitz, J. E. (1999). ‘Rethinking Pension Reform: Ten Myths About Social Security Systems’. Paper presented at the conference ‘New Ideas About Old Age Security.’ The World Bank: Washington D.C., September 14-15. Pragma Consulting (2005). The Pension Issues in the New Member States. Brussels: Pragma Consulting. Rodrik, D. (1998). ‘Why do more open economies have bigger governments?’. Journal of Political Economy, Vol. 106, 997-1032. Simonovits, A. (2005). ‘Social Security Reform in the US: Lessons from Hungary’. unpublished paper. Soede, A. and C. Vrooman (2006). ‘A Comparative Typology of Pension Regimes’. Research report for Adequacy of Old-Age Income (AIM) research project. Sorensen, P. B., M.I. Hansen and A.L. Bovenberg, A.L (2006). ‘Individual Savings Accounts and the Life-Cycle Approach to Social Insurance’. Paper presented at Reinventing the Welfare State conference, The Hague, April. World Bank (1994). Averting the Old-Age Crisis: Policies to Protect the Old and Promote Growth. Washington, D.C.: World Bank. World Bank (2005) The Quest for Equitable Growth in the Slovak Republic, Report, no. 32433-SK. Washington, D.C.: World Bank.


PART V Economic and Monetary Issues


Chapter 16

The Future of EMU: Towards the Disruption of the European Integration Process? Leila Simona Talani

This chapter is concerned with assessing the state of European integration in the aftermath of the establishment of EMU. Its purpose is to address the question: is there a disruptive impact of EMU on the process of European integration? No debate in European integration theory has raised so many questions and provoked so thriving an academic and intellectual literature as the one concerning European monetary integration. The establishment of a European currency union with the adoption of the Euro as the single currency for millions of EU citizens is arguably the single most important accomplishment of the EU. The monetary union has massive economic, political, and social consequences for the European and international political economy. Recently scholars have tended to focus on the disruptive potential of EMU especially in the lack of political Union. De Grauwe, for example points at the importance of a political union to reduce the impact of asymmetric shocks on the public opinion’s assessment of EMU. From this point of view the credibility of the member states commitments to EMU is higher the closer EMU is to an Optimal Currency Area (OCA). OCA theory says that if the benefits of the monetary union, exceed the costs, member countries have no incentive to leave the union. They form an optimal currency area. Or put differently, they are in a Nash equilibrium, and the monetary union is sustainable. Political Union and the adoption of a common fiscal policy increases the benefits of a currency union. Moreover, by increasing fiscal support to countries in a business cycle downturn, a single budgetary policy could ease the support for EMU and facilitate the legitimacy and implementation of structural reforms. These are necessary as flexibility is another essential dimension of an OCA. In the lack of political and fiscal union, De Grauwe suggests the credibility of the member states commitment to EMU is reduced and chances are that the project will collapse producing a disruptive impact on the whole European integration process. Indeed structural reforms have already produced a number of political struggles which have been considered in the literature as a natural consequence of the lack of legitimacy of the EMU project and have potential disruptive consequences on the desire of nation states to keep adhering to a currency Union1. 1 See De Grauwe, P. (2006). ‘What have we learnt about monetary integration since the Maastricht Treaty?’

280


In this contribution, the answers to the future of EMU are sought within the framework of a revised, embedded2 version of intergovernmentalism based on Moravcsik’s liberal intergovernmentalism (Moravcsik 1993a), which adds to the traditional intergovernmentalist framework an explicit theory of national preferences formation. According to this theoretical framework, the decision to enter strict monetary commitments and exchange rate commitments shall be related to the existence of a strong socio-economic consensus in the domestic constituencies of the most powerful European member states, namely France and Germany. In turn, the existence of such consensus provides for the credibility of the exchange rate commitment itself.3 Contrary to De Grauwe, this chapter adopts a structural definition of the credibility of the commitment to EMU4. Following Talani’s tripartite distinction of the levels of analysis in: ’political economy’ analysis; ‘purely economic’ analysis; and a ‘purely political’ one; despite the recent crisis of the Stability and Growth Pact and the struggles over structural reforms, at the political economy, structural level, the leading socio-economic actors in the Euro-member states are still supporting the set of anti-inflationary and supply -side policies which were enshrined in EMU from the onset and which will guarantee the competitiveness of the German and French manufacturing sectors. Indeed, it was precisely because the SGP had turned into an obstacle for the implementation of those same policies, that its stricter constraints were abandoned for the time being by Germany and France with the full support of their socio-economic constituencies. It is assumed that the economic interests of the French and German business sectors are still geared towards increasing competitiveness. However, after relying shortly on the devaluation of the Euro, favoured by the monetary and exchange rate policy of the ECB, with the reversal of this trend, they had to focus on a reduction of taxes and on the implementation of structural reforms. In turn, the adoption of structural reform in a neo-corporatist system had to rely on the consensus of the trade unions which was sought by relaxing the adherence to the SGP. However, the future of EMU has not been jeopardized by the latest developments of the SGP and the proof is that financial markets did not react negatively to the crisis of the European fiscal rule. The Quest for Competitiveness in Theory Colin Crouch (Crouch 2002) provides an analysis how the quest for competitiveness by the European socio-economic sectors has influenced European States’ attitude towards EMU, the Euro and the stability and Growth Pact. The focus of his contribution is on the way by which national governments will react to the lack of 2 January 2006 Paper prepared for the Special Issue of the Journal of Common Market Studies, ‘The Theory and Practice of Economic Governance in EMU Revisited: What Have We Learnt’, Guest Editor, Waltraud Schelkle. 3 See Talani, L.S. (2007). The Demise and Reform of the Stability and Growth Pact. London: Edward Elgar. 4 For more information on this see Talani, L.S. (2000). Betting for and against EMU. Aldershot: Ashgate.

The Future of EMU

281

competitiveness of their industrial sectors in the lack of the instrument of competitive devaluations. In particular, the author identifies three phases in the development of an EU industrial relation system as a consequence of the establishment of EMU: short term, medium term and long term. Leaving aside the long term in which the possibility of the creation of a transnational European collective bargaining system is envisaged (Crouch 2002: 297), this contribution is concerned particularly with the short and the medium term. In the short term, the devaluation of the Euro is considered the means by which nation states have addressed the lack of competitiveness of their industrial sectors (see section on the ECB in this contribution). In this context, the policy of benign neglect towards the devaluation of the Euro, implemented by the ECB in the first years of activity should be regarded as a short term surrogate of the national competitive devaluations lost with the establishment of EMU. As a consequence, it was accepted with joy by the socio-economic sectors of the main members of the Euro-zone hoping for an export orientated growth of their economies. (Crouch 2002: 282) It is important to note that according to the author this policy was perfectly in line with the previous behaviour of Germany, which had relied on a weak although stable currency for most of the 1970’s (Crouch 1994; Streeck 1994). It is also consistent with the intergovernmentalist view that Germany decided to enter EMU to guarantee a stable but slightly less strong currency to its industrial sector (Moravcik 1998). In Crouch’s opinion, however, the Euro-devaluation strategy could not be sustained for long and therefore would be substituted in the medium term by Social Pacts and Labour Market reforms. Particularly important, according to Crouch, structural reform in the Euro-zone member states would happen in a neo-corporatist fashion (For similar arguments see Boyer 2000, Marsden 1992; Pochet 1999). Neocorporatism is defined more as action co-ordination amongst social partners, than institutionalization of corporatist practices. It can take various forms, including organized decentralization, which is defined as ‘a shift away from centralized bargaining managed by employers’ organizations and trade Unions (Crouch 2002: 293). In turn, the relation of the government with the social partners is one of mutual dependence. The government needs consensus of the social partners to ensure smooth acceptance by the electorate of the structural, welfare policy reform while social partners, particularly trade unions, need neo-corporatism to keep being involved in the decision making process (Crouch 2002: 285). This is true, according to Crouch, for the great majority of western European cases, excluding only the UK. Also according to Martin Rhodes (Rhodes 2002), the reform of the labour markets and of the welfare state would not happen in a deregulatory fashion, but through a neo-corporatist strategy, or better, as he calls it, ‘competitive corporatism’ (Rhodes 1997). Paradoxically, the EMU, instead of decreasing the power of social partners, increases their role in the welfare and wage bargaining processes. For our purposes it is important to note that these neo-corporatist practices entail that structural reforms need to rely on the consensus of the social partners. The necessity to achieve such consensus produced the relaxation of the German and French commitment to the SGP, not to EMU whose foundations have not been put under discussion by neither the crisis of the SGP nor the social struggles entailed in the necessity to implement structural reforms.

282


This chapter will study in a historical perspective all the phases of the quest of competitiveness of the European member states and their leading socio-economic sectors. The first phase in the quest of competitiveness is represented by a monetary policy and an exchange rate policy of the ECB of ‘benign neglect’ vis-à-vis the devaluation of the exchange rate and the overshooting of the monetary targets. In the second phase from 2002 onwards, given the unlikelihood that the ECB could reverse or even slow down the depreciation of the dollar, the imperative competitiveness produced a new attention towards structural reforms and the flexibility of the labour markets. The chapter will highlight the relation between EMU, unemployment and structural reforms and their importance for the leading European socio-economic sectors. Finally, the most powerful member states, namely Germany and France, sought to obtain a relaxation of the macroeconomic policy framework, much needed by their economic domestic actors, by loosening the grip of the SGP. The Macroeconomic Consequences of EMU: How to Regain Competitiveness? At the dawn of the 1st of January 1999, the official birth date of the Euro, the international economic environment was characterized by the persistence of unusually high levels of growth in the US (what made some talk about the end of the business cycle) and the growing concerns for the Asian financial crisis. In the meantime, the EU was experiencing one of the highest aggregate unemployment rates since decades, and growing signs of a slowing down of the GDP, particularly for important members of the Euro-club like Germany and Italy.

Unemployment (%) Austria Belgium Finland France Germany Ireland Italy Netherlands Spain Portugal

98 4.7 9.5 11.4 11.7 9.4 7.8 11.9 4 18.8 5.1

99 4.3 9 10 11 9.1 6.7 11.4 3.2 15.6 4.8

GDP growth rate (%) 98 3.3 2.9 5.6 3.4 2 8.9 1.3 3.2 4 3.5

99-Q1 1.7 1.7 3.4 2.4 0.6

99-Q2 1.7 1.7 3.3 2.1 0.6

0.8 3.1 3.2

0.8 3.1 3.6

Figure 16.1 GDP growth and unemployment in the euro-zone 1998-1999 Source: Eurostat

No wonder that the attention of many, within both the academic and the political circles, was focusing on the pro-cyclical effects of the monetary constraints imposed by both the Maastricht Treaty and the Stability and Growth Pact while the European institutions worried to devise an appropriate employment strategy. On the contrary, as

The Future of EMU

283

Figure 16.2 EU 15 and euro 11 growth rates Source: Eurostat

a result of the many co-operation agreements signed by the trade Unions, particularly in the traditionally inflationary/club-med countries (notably Italy and Spain), the level of inflation, i.e., the main statutory concern of the ECB, was keeping a very low profile recording an unprecedented 0.8 per cent, which created concerns about the possibility of negative inflation. How did European Institutions react to this situation? How could Europe regain competitiveness? The Quest for Competitiveness Phase One: The Monetary and Exchange Rate Policy of the ECB in the First Years from its Establishment At the onset it is worth noting that the European Central Bank is the most independent of all Central Banks5. Indeed, its independence is guaranteed by its very statute in order to ensure as its exclusive goal the achievement of monetary stability, defined as a level of inflation rates below 2 per cent. Independence from political constraints, both national and supra-national, on the one hand, created further preoccupation over the democratic deficit of the European institutional setting; on the other hand, it allowed central bankers to concentrate theoretically only on monetary variables,

5 For a similar interpretation see Berger, H., de Haan, J., and S. Eijffinger, (2000). ‘Central Bank independence: and update of theory and evidence.’ CEPRDP No. 2353: (London: CEPR). See also Cukierman, A., Webb, S.B. and Neyapti, B. (1992). ‘Measuring the independence of Central Banks and its effects on policy outcomes.’ The World Bank Review, 6, pp. 353-398.

284


Figure 16.3 HICP in euro-area ( per cent changes) Source: ECB

leaving aside the performance of the real economic indicators, namely growth and employment rates. The reality of the first years of implementation of a single monetary policy in the Euro-area, however, demonstrates that monetary policy considerations have not been separated from the performance of real economy. Many were the worries concerning the performance of the ECB at the eve of its establishment, given the unprecedented nature of its tasks as the responsible for the implementation of a European common monetary policy and the management of a European common currency in the lack of full political integration. These ranged from the lack of credibility of the ECB monetary stances, to its lack of flexibility, from the need to increase its democratic accountability, to that of ensuring its independence from the governments of the Member States. According to the CEPR6, from its inception, the ECB displayed more flexibility than expected regarding asymmetries within the Euro-zone. This result was possible due to the adoption of a so-called ‘two-pillar monetary strategy’ at the expenses of transparency. Given the goal of price stability, defined as HIPC inflation between 0 and 2 per cent, the two pillars of monetary policy are on the one hand, a money growth reference target and, on the other hand, a number of unspecified indicators including the exchange rates and asset prices. In a period in which the majority of central banks abandon monetary targeting to replace it with the much more 6 See CEPR (2000). One money, many countries: monitoring the European Central Bank 2. London: CEPR.

The Future of EMU

285

transparent and accountable (expected) inflation targeting, this strategy has been judged rather obscure7. One might argue that in the trade-off between transparency and flexibility, the balance shall not necessarily incline in favour of the former. Indeed, if the ECB were to make public regularly its (expected) inflation targets, this could even weaken its credibility vis-à-vis financial markets, in case the target could not be achieved, leaving less scope of manoeuvre to harmonize monetary policy with the performance of the Euro-zone in real terms. However the issue is far from being uncontroversial. Critics underline that the reduction of transparency following from the multiplication of targets and indicators leads to surprises which unsettle financial markets while uncertainty might result in higher borrowing costs8 Leaving the debate over the trade-off between transparency and flexibility to the experts9 and turning to the concrete monetary policy performance of the ECB during its first years of activity, the picture does not get much clearer. The first issue to address is the importance attributed by the ECB to output growth in Euro-land (and in some member countries in particular) relative to inflation. Since the establishment of EMU, in 1999, the economic outlook recorded a marked slow-down in all OECD countries for the first time since the 1970’s. Whereas the Japanese economy was in a recession since some time already in the year 2001 the US economy experienced the first substantial fall of the business cycle in a decade. Also the Euro-zone, with a lag of some months with respect to the US, slowed significantly in the year 2001. It is not clear, that this is the place to analyse the motivations of such a global decline10, though it is important to notice that this had a major impact especially on the most important European economies, namely Italy, France and Germany (Figure 16.5 & 16.6). Theoretically, as underlined in many speeches and documents11, the ECB would pay little attention to the short-run output developments to avoid the threat of loosing credibility in its anti-inflationary stances in front of the financial markets. However, it is easy to notice that the 30 point cut of interest rates to 3 per cent on January 1st, 1999 was associated with deflationary risks in the wake of the Asian crisis. Furthermore, the April 1999 cut to 2.50 per cent coincided with declining output in important Euro-land members (notably Germany). Finally, the cut of the 17th of September 2001 in the minimum bid rate on the Eurosystem’s main refinancing operation by 50 points to 3.75 clearly matches a similar decision taken by the US Federal Reserve in the aftermath of the terrorist attacks of the 11th of September and their recessive consequences. More sophisticated analyses clearly show that the ECB monetary policy, and, in particular, the timing and frequency of interest rate changes reflected the aim to 7 For a structured criticism of this monetary pillar, see CEPR (2002). Surviving the slow-down, monitoring the EUROPEAN Central Bank 4. 8 See CEPR (2000). 9 See, for example, Artis, M. ( 2003). ‘EMU: four years on’, EUI: un-published. 10 For more information see ECB (2002). 11 For some quotations see CEPR (2002).

286


Figure 16.4 Real GDP per cent changes 1999-2004 Source: OECD

Figure 16.5 Output gaps Source: OECD

The Future of EMU

287

Real GDP Percentage change from previous period Projections 1999

2000

2001

2002

2003

2004

2.7 3.2

3.5 3.7

0.7 0.8

1.0 0.7

1.1 1.3

2.0 2.3

2.6 3.4 3.2 2.0 3.6 11.1 1.7 4.0 3.8 4.2

2.8 5.5 4.2 2.9 4.2 10.0 3.1 3.3 3.7 4.2

1.4 0.6 1.8 0.6 4.1 6.0 1.8 1.3 1.6 2.7

1.6 1.6 1.2 0.2 4.0 6.0 0.4 0.3 0.5 2.0

1.6 2.2 1.2 0.3 3.6 3.2 1.0 0.7 0.3 2.1

2.6 3.4 2.6 1.7 3.9 4.2 2.4 1.9 2.3 3.1

Sweden United Kingdom United States

4.6 2.4 4.1

4.4 3.1 3.8

1.1 2.1 0.3

1.9 1.8 2.4

1.5 2.1 2.5

2.8 2.6 4.0

Euro area European Union

2.8 2.8

3.6 3.5

1.5 1.6

0.9 1.0

1.0 1.2

2.4 2.4

Austria Belgium Denmark Finland France Germany Greece Ireland Italy Netherlands Portugal Spain

Figure 16.6 Real GDP per country Source: OECD

engage in some output stabilization and not only to control prices, though leading Central Banks personalities constantly deny it12. If the output level was never officially recognized as a point of reference in the monetary policy-making of the ECB, but was certainly taken into consideration, the opposite happened with monetary targets. Indeed, the two-pillar strategy theoretically rests on the prominence of the target for M3 growth as the main official indicator for ECB monetary policy decisions. However, in many occasions, when the target has been overshoot, the ECB has not reacted accordingly. For example, despite the fact that the target had been publicly set at 4.5 per cent for 1999, no measures were taken by the ECB when it became clear that the target would not be achieved by the end of the year. On the contrary, the ECB cut the interest rates and engaged in sophisticated explanations over the reasons why the departure from the reference M3 growth rate did not represent any rupture with the two pillar monetary strategy.

12 See CEPR (2002).


288 Date

With effect from 6 Jun. 2003 7 Mar. 2002 6 Dec. 9 Nov. 18 Sep. 2001 31 Aug. 11 May 6 Oct. 1 Sep. 28 Jun.3) 2000 9 Jun. 28 Apr. 17 Mar. 4 Feb. 5 Nov. 9 Apr. 22 Jan. 1999 4 Jan.2) 1 Jan.

Deposit facility

Level 1.00 1.50 1.75 2.25 2.75 3.25 3.50 3.75 3.50 3.25 3.25 2.75 2.50 2.25 2.00 1.50 2.00 2.75 2.00

Main refinancing operations Fixed rate tenders Fixed rate Level 4.25 3.75 3.50 3.25 3.00 2.50 3.00 3.00 3.00

Variable rate tenders Minimum bid rate Level 2.00 2.50 2.75 3.25 3.75 4.25 4.50 4.75 4.50 4.25 -

Marginal lending facility

Level 3.00 3.50 3.75 4.25 4.75 5.25 5.50 5.75 5.50 5.25 5.25 4.75 4.50 4.25 4.00 3.50 4.50 3.25 4.50

(1)The date refers to the deposit and marginal lending facilities. For main refinancing operations, unless otherwise indicated, changes in the rate are effective from the first operation following the date indicated. Dates of settlement and amounts are shown in Table 1.3 of the ECB Monthly Bulletin. (2)On 22 December 1998 the ECB announced that, as an exceptional measure between 4 and 21 January 1999, a narrow corridor of 50 basis points would be applied between the interest rates for the marginal lending facility and the deposit facility, aimed at facilitating the transition to the new regime by market participants. (3)On 8 June 2000 the ECB announced that, starting from the operation to be settled on 28 June 2000, the main refinancing operations of the Eurosystem would be conducted as variable rate tenders. The minimum bid rate refers to the minimum interest rate at which counterparties may place their bids.

Figure 16.7 ECB main refinancing operations Source: ECB

As the outlook for inflation turned upward by the end of 1999, the ECB did promptly intervene by increasing the interest rate by 50 basis point. Of course, given the parallel increase in the M3 growth, this seemed to be consistent with the monetary strategy declared by the ECB, while the final divorce between the ECB changes in the interest rates and the M3 growth rate appears justified by the necessity to keep the HICP within the 2 per cent limit. In any case, the suspicion that the M3 target was never really given the importance implicit in the adoption of the two-pillar strategy and was often subordinated to pragmatic considerations about the level of output, never abandoned the experts. Indeed, reacting to the many criticisms towards the first pillar, the ECB effected

The Future of EMU

289

Figure 16.8 Adjusted M3 percentage changes per month Source: ECB

some modifications of the M3 series, by first removing non-resident holdings of money market funds from the definition of Euro-zone M3 and then purging nonresident holdings of liquid money, market paper and securities. However this adjustment is no more than a cosmetic change and does not improve the reliability of the monetary pillar. If anything, the figure below shows that M3 percentage changes and interest rate decisions by the ECB go in opposite directions. All this is to the expense of the transparency and credibility of the ECB monetary policy-making.

Figure 16.9 Source: ECB

M3, HICP and ECB main refinancing rate per cent changes 1999-2003

290


Even more obscure is the role attributed by the ECB to the exchange rates within the two-pillar monetary strategy13. Indeed, the second pillar of the strategy makes explicit reference to a series of indicators influencing the ECB monetary decisions amongst which, the Euro exchange rates. However, looking at the performance of the newly born currency in the first months of its existence, it raises spontaneously the suspicion that the Bank had adopted an attitude of ‘benign neglect’ vis-à-vis the exchange rate of the Euro14. Indeed, the Euro lost around 15 per cent of its value vis-àvis the dollar between August 1999 and August 2000 while the parity with the dollar was already lost in Janurary 2000. Also the effective nominal and real exchange rate of the Euro experienced a marked decrease (-11.3 and –10.1 respectively between August 1999 and August 2000). Of course the ECB has always underlined that the performance of a currency must be assessed in the long run. And indeed in the long run the Euro/Dollar exchange rate has witnessed a reversal of its previous performance with a marked appreciation of the Euro, though it should be better to talk about a strong depreciation of the Dollar. However, the substantial lack of concerns on the fall of the Euro on the side of the European monetary authorities provoked further doubts about the real scope of the two-pillar strategy15.

Figure 16.10 USD/Euro exchange rates 1999-2003 Source: ECB

13 See CEPR (2000) for a similar interpretation. 14 This is the intervention of the central banks in favour of the euro in the Summer 2000. 15 Many economists have expressed doubts on the behaviour of the Euro exchange rates. See, for example, Artis, M. (2003); and Koen, V. (2000). EMU: one year on, OECD Observer, March-Paris, OECD.

The Future of EMU

291

In a few words, the emphasis on the performance of the monetary aggregates (M3) as the first pillar of the ECB monetary strategy, seems to conceal the desire by the Central Bank to trade-off some of the transparency that the adoption of an alternative monetary strategy would imply (like targeting the inflation rate, for example), in exchange for more flexibility. In turn, this flexibility has been used to pursue output objectives that would not be acceptable otherwise within the strict anti-inflationary mandate of the ECB.16 Similarly, the attitude of the ECB towards the performance of the exchange rate, particularly in the first two years of its activity, an attitude that the economists fail to fully understand17, acquires a completely different meaning in the light of the analysis of the manufacturing export performance of the euro-zone, and, in particular of some of the euro-zone countries. In particular, following Frieden, it is possible to claim that the export oriented manufacturing sectors would gain the most from a devalued currency. Therefore, the countries heavily relying on the performance of the export oriented manufacturing sector, like Italy, Germany and France to a lesser extent, should have a vested interest in adopting a policy of ‘laissez-faire’ with respect to the depreciation of the Euro. Things however drastically changed when the dollar started depreciating leaving countries member to the Euro-zone with the long-lasting problem of how to increase their economic competitiveness especially after the globalization of the world economy started biting. One way to increase competitiveness is indeed to reduce the costs of labour by adopting supply side measures to increase the flexibility of the labour markets. The expression ‘flexibility of labour markets’ as used by the scholars of industrial relations (e.g. Rhodes 1997) refers to three forms of flexibility: 1. Internal (or functional) flexibility in the work place; 2. External (or numerical) flexibility vis-à-vis the wider labour market 3. Greater pay flexibility at local levels Is there a relation between the EU discourse on structural interventions to increase the flexibility of the labour markets and the implementation of EMU? This is what we will discover in the next section of this contribution. The Quest for Competitiveness Phase 2: The EMU, Unemployment and the Flexibility of Labour Markets and Structural Reforms The establishment of EMU shall be read as a major institutional undertaking whose economic outcomes are not only constrained, but also defined by its institutional framework. This is to say that the economic consequences of EMU are specific to the way in which this particular currency union has been devised and this, in turn, is the product of a unique historical process. Therefore the purpose of the present section is 16 About the effective mandate of the ECB there is a huge debate within the academic community. See, for example CEPR (2002). 17 See Artis, M. (2003).

292


not to analyse the economic impact on unemployment of currency unions in general. The focus of this analysis is on a particular type of currency union: the one defined by the Maastricht agreement on EMU in 1991 and refined by the adoption of the Stability and Growth Pact by the European heads of state and government in 1997. It will not however discuss why EMU has this particular institutional configuration because, though it is an issue of major importance, it has been addressed widely in the literature18. From an institutional point of view, the Maastricht treaty and its protocols solved the long-lasting controversy between the ‘monetarist’ and the ‘economist’19 approaches to monetary union. This was possible on the one hand by establishing a rigid institutional framework with a clear-cut economic objective (that of pursuing price stability) and a three-stage timetable to achieve EMU (cf. Gros and Thygesen 1998), on the other hand by devising a set of convergence requirements that applying member states had to respect before entering. These requirements included permanence in the ‘new’ ERM (within 15 per cent bands) for at least two years; inflation rates no more than 1.5 per cent higher than the average of the three most virtuous member-states; interest rates no more than 2 per cent higher than the average of the three most virtuous member-states; a debt-to-GDP ratio not exceeding 60 per cent, subject to conditions; and, most importantly a deficit to GDP ratio not exceeding 3 per cent (TEU art. 104(c) and art. 109 (j)). The economic viability and the political (or political economy) rationale of the Maastricht criteria has been the subject of a number of studies from the most various academic points of view, which is why the issue will not be tackled here. What is important to underline is, however, that their strict anti-inflationary aim was even strengthened by the adoption of the Stability and Growth Pact (SGP) (Eichengreen and Wyplosz 1998: 71). The pact confirms the objective of a deficit to GDP ratio not exceeding 3 per cent and commits EMU member states to a medium term budgetary stance close to balance or in surplus. It also defines the terms and sanctions of the excessive deficit procedure. Exemption from respecting this fiscal criterion within EMU is allowed only in case of a decline in GDP of 2 per cent or more and of a temporary and small excess deficit. With a GDP declining by between 0.75 and 2 per cent, the decision on exemption from sanctions is left to the Council of Ministers. With lower decreases in GDP, the excessive deficit procedure will be implemented in any case, and countries obliged to keep up to 0.5 per cent of their GDP in noninterest-bearing mandatory deposits with the ECB until excess deficit is re-absorbed. If this does not happen within two years, deposits are transformed into outright transfers (Gros and Thygesen 1998: 341). 18 See for example Crouch (2000), Dyson and Featherstone (1999), Eichengreen and Frieden (1998), Frieden (1998), de Grauwe (1997), and also Talani (2000). 19 The distinction between ‘monetarists’ and ‘economists’ emerged in the course of the discussions over the Werner Plan and referred to the strategy to be adopted during the transitional period. The ‘monetarists’ stressed the importance of achieving exchange rate stability through European institutional arrangements, while the ‘economists’ pointed out the necessity of policy co-ordination and, ultimately, convergence before agreeing on the adoption of a European fixed exchange rate regime or a currency union. For more details see Tsoukalis (1997).

The Future of EMU

293

The major question to answer at this point is how, if at all, the implementation of this particular kind of currency union will influence EMU member states performances in terms of unemployment and which were the consequences of the SGP. First, to what extent does this particular form of currency union contain a recessive bias, thus reducing the level of output ceteris paribus. The other way is to see how the establishment of EMU has been linked in theory and in practice to the flexibility of labour markets. These two streams of reasoning might have opposite outcomes. Indeed, while the former would point to an increase in the level of unemployment, the second could lead to its decrease. However, the tricky aspect lies in the fact that the first way of reasoning might be used to further the second, thus adding to its economic rationale and fostering its political feasibility. The first stream of economic reasoning assesses the overall recessive effects of the implementation of the Maastricht fiscal criteria and/or of the SGP. Some authors have argued that the effort brought about by the implementation of the Maastricht criteria, and in particular of the fiscal ones, as well as the determination to stick to the ERM in a period of high interest rate policy, can explain the upsurge of European unemployment in the 1990’s (Artis 1998). Of course, economic analyses are far from reaching an agreement on the issue. Indeed, the counter-arguments tend to underline the necessity of fiscal consolidation and anti-inflationary policies. Others point out that the time period over which unemployment has been growing in Europe is too long to be easily explained in macro-economic terms (Nickell 1997). However, deflationary policies implicit in the implementation of the Maastricht way to EMU seem to have eventually worsened the level of European unemployment, at least by increasing the equilibrium rate of unemployment; a phenomenon called hysteresis (Artis 1998; Cameron 1997). Moreover, some econometric simulations show that the implementation of the stability pact from 1974 until 1995 in four European countries (notably, Italy, France, Germany and the UK) would have limited economic growth by reducing the annual growth rate. This would lead to cumulated output losses of around 5 per cent in France and the UK, and of 9 per cent in Italy. The economic theory rationale of these results is, of course, that the SGP constraints would limit (and will limit, in the future) the use of automatic stabilizers to counter recessive waves, thus increasing the severity of recessions. This, however, will happen only if member states are not able to achieve a balanced or surplus budgetary position allowing them to use automatic stabilizers during mild recessive periods in the appropriate way without breaching the Maastricht and SGP threshold (Eichengreen 1998: 93). There is the counter-argument that the stability and growth pact gives credibility to the ECB anti-inflationary stances, thus reducing the level of interest rates required to maintain the inflation rate below 2 per cent and boosting economy. Finally, even if the recessive bias of the fiscal criteria and the SGP were proved, this would not necessarily lead to a higher unemployment level (Artis 1997; Buti 1997). However, there is another way in which the Maastricht criteria and the stability pact might affect unemployment, a more indirect way, which is the basis to justify a neo-functionalist automatic spill over leading from EMU to labour market flexibility. This is related to how member states should react to possibly arising asymmetric shocks. By definition, autonomous monetary policy and exchange rate policies are

294


not available to react to idiosyncratic shocks in a currency union. At the same time, common monetary and exchange rate policy should be used with caution since they can have mixed results in case the other members of the Union were experiencing an opposite business cycle situation. Thus, economic theory leaves few options: fiscal policy, labour mobility and relative price flexibility. Indeed, a country could react to an asymmetric shock by using national fiscal policy, both as a counter-cyclical tool, through the action of automatic stabilizers, and in the form of fiscal transfers to solve more long-term economic disparities (as in the case of Italian Mezzogiorno). However, in the special kind of monetary union analysed in this paper, the Maastricht criteria and, to an even bigger extent, the requirements of the SGP constraint substantially the ability of member states to resort to national fiscal policy to tackle asymmetric shocks. Alternatively, some authors suggest the redistributive and stabilising functions of fiscal policy be performed at the European level. Regarding this, the proposals range from the increase in the size of the European budget, to the pooling of national fiscal policies, to the establishment of a Common fiscal body, which would act as a counterbalance to the ECB (Obstfeld 1998). The feasibility of similar proposals looks at least dubious in the light of the difficulties EU Member states encounter in finding some agreement on the much less challenging task of tax harmonization (Overbeek 2000). Moreover, whichever the discussion about fiscal policy, it inevitably triggers a discussion on the loss of national sovereignty and a related one on political unification whose outcomes are still far from being unanimous. Overall, there does not seem to be a compelling will of EU member states to reach an agreement on the creation of a common fiscal policy nor to find some way to increase the size of the EU budget as to introduce a stabilization function. Given the difficulties in using national fiscal policy to tackle asymmetric shocks, and the lack of any substantial fiscal power at the European level, economists suggest the option of resorting to labour mobility. The EU does indeed provide an institutional framework in which labour mobility should be enhanced. The Treaty’s articles regarding the free movement of workers, the Single Market programme, and recent provisions in the Amsterdam Treaty of course represent this. However, economic analyses show little evidence of mass migration in response to asymmetric shocks in the EU (unlike in some respects the US) (Obstfeld 1998). Indeed, few European policy makers, if any, would seriously endorse temporary mass migration as a credible way to react to national economic strains, for obvious political as well as social considerations. There thus remains only one policy option for national policy makers to tackle the problems arising from asymmetric shocks. That is, increasing the flexibility of labour markets so that ‘regions or states affected by adverse shocks can recover by cutting wages, reducing relative prices and taking market shares from the others’ (Blanchard 1998: 249). Also, since the reform of the labour market is clearly a structural intervention, it will help eliminate the structural component of unemployment, apart from the cyclical one, if it is still possible to distinguish between the two (Artis 1998). Indeed, the employment rhetoric and strategy officially adopted by EU institutions in the last few years shows clearly that the European Union has chosen to give priority

The Future of EMU

295

to labour flexibility and structural reforms as ‘the’ means to tackle the problem of unemployment in Europe. However the implementation of structural reforms is a costly endeavour which produces social unrest and requires the co-operation of domestic constituencies and actors. Is this effort going to disrupt the Economic and Monetary Union and put strains on the process of European integration as a whole? 3. The future of EMU: assessing its disruptive potential and the crisis of the SGP and structural reforms Some answers about the disruptive potential of the implementation of structural reforms on EMU and European Integration have already been given by the not-somuch publicized crisis and reform of the Stability and Growth Pact. When it was adopted by the European council in Amsterdam in 1997 the Stability and Growth Pact (SGP)20 was welcomed as the main pillar of the credibility of the forthcoming Economic and Monetary Union, as the guarantor of the stability and strength of the newly born common currency, and as a German creature able to constraint the free-riding attitude of the club-med21. Not even ten years later, the Stability and Growth Pact died at the hands of its father and mother, Germany and France22, the most amazing thing being that the Euro remained stronger than ever and that the markets did not even think about speculating on the lack of credibility of a post-SGP EMU23. Here, a fundamental paradox arises: how can a currency remain as strong as ever in the midst of a serious crisis of the fiscal rule? This paradox seems to point towards a political economy interpretation of the making and enforcement of fiscal co-ordination in the Euro area. In this context the debate is still very open between various interpretations of the related events from opposed theoretical perspectives.

20 When European finance ministers agreed at the Dublin Summit in 1996 on the need for a fiscal framework to reinforce the powers of the future European Central Bank, they called it the Stability Pact. The words and ‘and Growth’ were added later, at the Amsterdam European Council of 1997. The Amsterdam resolution establishing the Stability and Growth Pact may be found at the following website: http: //www.ena.lu/mce.cfm accessed on 6 September 2005. The EU legislation relating to the Stability and Growth Pact may be found at the following website: http: //europa.eu.int/comm/economy_finance/about/activities/sgp/sgp_en.htmb accessed on 6 September 2005. 21 For an account of these reactions see Keegan, W. (2003). ‘On firmer ground without Stability’, The Observer, Sunday November 30, 2003 website: http: //politics.guardian.co.uk/ euro/comment/0,9236,1096589,00.html#article_continue. See also Keegan, W. (2003). The Prudence of Mr Gordon Brown. London: Wiley. 22 For a very thorough account of the role of France and Germany in the making of the SGP see Heipertz, M. and Verdun, A. (2005). ‘The Stability and Growth Pact – Theorising a Case in European Integration’ Paper prepared for delivery at the Ninth Biennial International European Union Studies Association Conference Austin Texas, 31 March – 2 April 2005 23 See section 3 of this article.

296


The issue of fiscal policy in EMU is still dominated by economists24. However, political science research has recently moved in and proposed some useful frameworks to analyse the issue. Verdun has extensively written about the stability and growth Pact, adopting a neo-constructivist view of its making and an eclectic approach to its working and collapse (Heipertz and Verdun 2004.) She argues that the SGP was possible due to a convergence in basic ideas about the relationship between monetary and fiscal policies held by experts in Ministries of Finance, central banks, the Commission as well as in academia and international organizations. However, ideational convergence provided only the basis for a political compromise. The final decision to adopt it was possibly a product of the prominent position of Germany in the intergovernmental talks leading to the approval of the SGP and the creation of a convergence of interests with France in a typical power-politics fashion. (Heipertz 2004: 1-2). As Verdun rightly states, ‘designing rules is one thing, applying them another’ (Heipertz and Verdun 2005: 16). So, how does the author explain the (non)application of the SGP? She presents an eclectic mixture of four theoretical approaches to address the issue: intergovernmentalist, neo-functionalism, domestic politics and ideationalist approaches. (Heipertz 2005: 2) The neo-functionalist and the ideationalist approaches, however, are applied mainly to the questions relating to the making of the SGP, which is out of the scope of this discussion, although the author admits that also the adoption of the SGP was conditional on an agreement between France and Germany, as intergovernmentalist would predict. As regards the implementation or non-implementation of the SGP, the intergovernmentalist lenses are still helping the author who claims that ‘France and Germany while no longer holding the same degree of influence over specific outcomes, were still able to shape events according to their national interest’. (Heipertz 2005: 3).

24 For the most recent literature see Allsopp, C. and M. Artis (2003). ‘The Assessment: EMU Four Years On’, Oxford Review of Economic Policy, 19(1): 1-29; Annett, A., J. Decressin and M. Deppler (2005). ‘Reforming the Stability and Growth Pact’, IMF Policy Discussion Paper, PDP/05/2. Artis, M.J. (2002). ‘The Stability and Growth Pact: Fiscal Policy in the EMU’. In F. Breuss, Fink, G. and S. Griller, (eds.), Institutional, Legal and Economic Aspects of the EMU. Springer: Wien-New York.; Artis, M.J. and M. Buti (2000). ‘Close to Balance or In Surplus’ – A Policy Maker’s Guide to the Implementation of the Stability and Growth Pact’, Journal of Common Market Studies, 38(4): 563-92. Edited version in Buti and Franco (2005). Balassone, F. and D. Franco (2000a). ‘Public Investment, the Stability Pact and the Golden Rule’, Fiscal Studies, 21(2): 207-29. Edited version in Buti and Franco (2005). Balassone, F., Franco, D. and R. Giordano (2004). ‘Market Induced Fiscal Discipline: Is There a Fallback Solution for Rule-Failure?’, in Banca d’Italia (2004): 389-426. Begg, I. and W. Schelkle (2004). ‘The Pact is Dead: Long Live the Pact’, National Institute Review, 189: 86-98. Buti, M. and D. Franco (2005). Fiscal Policy in EMU – Theory, Evidence and Institutions. Edward Elgar: Cheltenham. Eijffinger, S.C.W. (2005). ‘On a Reformed Stability and Growth Pact’, Intereconomics, 40(3): 141- 147. Wren-Lewis, S. (2003). ‘Fiscal Policy, Inflation and Stabilisation in EMU’, in Buti (2003). Wyplosz, C. (2002). ‘Fiscal Policy: Rules or Institutions?’, Paper prepared for the Group of Economic Analysis of the European Commission, April. Wyplosz, C. (2005). ‘Fiscal Policy: Institutions versus Rules’, National Institute Economic Review, 191: 64-78.

The Future of EMU

297

However, it is a domestic politics approach which is used to scrutinize the internal situation of the relevant governments in their respective countries: Germany and France. Based on a neo-institutionalist/neo-constructivist account of the role of domestic actors in the making of the EMU, (Dyson 1996; Martin 1994; McNamara 1994; Sandholtz 1993; Young 1999) Verdun identifies as the most relevant domestic actors all political parties (in government and opposition) and the central bank. Other actors (parliaments, trade unions etc.) were only influential on EMU and the SGP insofar as they succeeded in influencing public opinion and the national governments. (Heipertz 2005: 10). So, accounting for the decision to suspend the implementation of the EDP on 25 November 2003 the emphasis is on the French and German governments’ necessity to keep their electorate- mainly by cutting tax, and therefore giving up their fiscal pledges. This, despite the fact that in neither case the elections were close and that promises to cut tax had been broken before, particularly in France. According to Verdun having broken his promises about tax cuts before, Chirac this time decided to go ahead with them, arguing that they were a necessary complement to pension reform. For Schröder, the application of the SGP in November 2003 would have implied a loss of face domestically and put oil on the fire of the opposition. Potential sanctions could have eventually become a concrete possibility in 2006, which would be an election year. (Heipertz 2005: 15). But why did Chirac decide to cut tax in November 2003? Why was Shröeder so worried about losing face in front of the electorate in 2003 when the elections were not until 2006? Who wanted to cut tax? Was the cut in tax so necessary as to put under discussion the SGP that France and Germany had wanted so much? Was the cut in tax the only reason why Germany and France could not stick to the fiscal rule? And what about the credibility and the future of EMU after this decision? Summing up, it is debatable whether the only relevant actors were institutional ones. Focusing only on governments, parties and the central bank, risks resulting in a rather descriptive account of the domestic politics of formal decisions, while from a more analytical point of view it would be important to ask why those decisions were taken investigating on their distributional effects. It is worth noting who wins and who loses from the adoption of certain decisions while socio-economic interests were at play. Indeed, other domestic politics perspectives might point to the distributive effects of the fiscal rule on socio-economic sectors. From the domestic politics point of view, David McKay addresses the impact of fiscal co-ordination on the behaviour of domestic political actors (McKay 2002). In particular, McKay identifies three dimensions of the EU fiscal policy: fiscal federalism, fiscal co-ordination through the implementation of the SGP and fiscal harmonization. For each of these dimensions, the author makes hypotheses relating to the effects of fiscal policy on domestic politics. Leaving aside the questions relating to fiscal federalism and fiscal harmonization, which are outside the scope of this contribution, it is worth recalling the implications of the SGP on the domestic structure. One obvious consequence, often emphasised in the literature (McKay 2002; Talani 2004; Crouch 2002) is that budgetary constraints would imply a reform of the domestic labour market structure, activating socio-economic domestic actors as the

298


trade unions and the employers’ organizations. The rationale, in its simplified form, is that in the lack of other tools to react to asymmetric shocks, Euro-zone member states would have to revert to labour market flexibility to solve their economic unbalances (Talani 2004). What is relevant for McKay, however, is what kind of response the structural reforms brought about by the SGP will have on the electorate once realized that labour market practices and social benefits given for granted are being lifted as a consequence of the implementation of this particular form of EMU. While some political scientists address this issue in terms of legitimization crisis (Weale 1996; Verdun 2000), McKay is interested in how single countries would react to these developments. From his point of view, reactions will be different in different countries, and might have well produced, in times of recession, a breach of the fiscal rules adopted through the SGP. Indeed this prediction is in line with those of many economists, who had forecasted that the SGP would not hold in many circumstances (Eijffinger 2000: 92). And indeed, this is exactly what happened with the crisis of the SGP in November 2003. McKay failed to realize however, that this would not produce any major consequence on the Euro, the ECB or the EMU project. His idea was that ‘Unchallenged fiscal recidivism on the part of some members would damage the Euro on the foreign exchanges, and, via imported inflation, might undermine the whole project’ (McKay 2002: 84). But this is exactly what did not happen. Let’s see whether other domestic politics approach might help understand why. Socio-economic sectors have pursued their quest for competitiveness by first relying on the devaluation of the Euro. In Crouch’s opinion, however, the Eurodevaluation strategy could not be sustained for long, and would be substituted in the medium term by Social Pacts and Labour Market reforms which, in turn, had to be supported by the social partners. Indeed, as Dyson points out, (Dyson 2002: 182) Shroeder, his economic adviser Klaus Gretshmann, Eichel, Economics minister Werner Muller and labour and social affairs minister Walter Riester all agreed that ‘managed capitalism’ was the way forward for Germany to improve its competitiveness. Managed capitalism wrapped around co-operation, co-ordination in wage bargaining, dialogue with the social partners and consensus in managing supply side reforms. Consensus was indeed the main principle of managed capitalism and was deeply entrenched in both the political and economic German systems (Dyson 2002). By the same token, France’s recipe to combat the loss of competitiveness attached to globalization implied a short term reliance on competitive devaluation and a medium term consensus by the social partners’ to the reform pension reform (Crouch 2002). It is true that, since 1983, Mitterand’s decision to keep the Franc in the ERM, the process of European monetary integration had been seen as a tool to reinforce domestic economic reform. However, particularly after German re-unification, the constraints of EMU were increasingly blamed for the French economic crisis (Howarth 2002). However, the substantial decline of the Euro in relation to the dollar and the yen suited the French preferences. Throughout the 1990s the French Government had argued that European currencies were overvalued in relation to the dollar (Howarth 2002). Both in Germany and in France consensus to structural reform in the impossibility to sustain the short term strategy of a devaluation of the Euro, would mean relaxing the adherence to the SGP budgetary constraints.

The Future of EMU

299

However, this did not reduce the credibility of the EMU project no it jeopardize the future of EMU because it signalled a change of preferences of the socio-economic groups only at the level of purely economic or purely political interests, and not at the political economy level. Conclusion: A Structural Definition of the Credibility of the Commitment to the EMU The answers to the future of EMU are sought within the framework of a revised, ‘embedded’ version of intergovernmentalism based on Moravcsik’s liberal intergovernmentalism (Moravcsik 1993), which adds to the traditional intergovernmentalist framework, an explicit theory of national preferences formation. Intergovernmentalists would predict that the interests of the most powerful member states prevail over the ones of smaller states. Based upon previous research (Talani 2005), embedded intergovernmentalism would trace back the interests of the most powerful Euro-zone member States to the position of their leading socioeconomic sectors. In particular, the shift of emphasis from strict fiscal policy to more relaxed ones enshrined in the new outlook of the SGP, does not detract to the credibility of the member states commitment to EMU. This is why, after the decision by the ECOFIN not to impose sanctions on France and Germany, financial markets did not reduce the value of the Euro, which kept on increasing vis-à-vis the dollar, nor did they ask higher yield to keep assets denominated in Euros. This chapter employs a definition of credibility rooted in the consensus to EMU of the most powerful socio-economic actors (Talani 2003). Here, credibility derives primarily from structural considerations relating to the institutionalization of a set of favourable macroeconomic policies following from this particular form of monetary union (Gill 1997). Following Talani’s tripartite distinction of the levels of analysis in: ‘political economy’ analysis; ‘purely economic’ analysis; and ‘purely political‘ one; this article argues that at the political economy, structural level, the leading socio-economic actors were still supporting the set of ant-inflationary and supplyside policies which were enshrined in EMU from the onset. Indeed, it was precisely because at the purely economic level and at the purely political level the SGP had turned into an obstacle for the implementation of those same policies, that its stricter constraints were abandoned for the time being by Germany and France. The second level of analysis, ‘purely economic analysis’, focuses on the identification of the concrete interest groups’ preferences in a shortterm time-scale. It is at this level that is possible to trace back changes in the attitude of socio-economic groups in relation to their macroeconomic preferences. In the context of this analysis, the economic interests of the French and German business sectors aimed at increasing their competitiveness, after relying shortly on the devaluation of the Euro, with the reversal of this trend, focused on a reduction of taxes and on the implementation of the structural reforms (Crouch 2002). In turn, at the political level of analysis, the adoption of structural reform in a neocorporatist system had still to rely on the consensus of the trade unions. This means that when the external, international conditions cannot be modified by their previous

300


institutional referents, such as the ECB, socio-economic groups and the governments supporting their interests may modify their policy preferences and decide to target other referents, like, for example, the ECOFIN. On the basis of similar considerations it is possible to explain why, from 2002 onwards, given the unlikelihood that the ECB could reverse or even slow down the depreciation of the dollar, the most powerful member states, namely Germany and France, sought to obtain a relaxation of the macroeconomic policy framework, much needed by their economic domestic actors, by loosening the grip of the SGP. The exact timing of the crisis, in turn, was defined by the political needs of Germany, involved precisely in November-December 2003 in the final stages of a tough negotiation, during which both the opposition and the trade unions for the approval of a package of structural reform package denominated agenda 2010. As underlined above, however, the demise of the SGP did not signify an abandonment of the EMU project, but only a short-term contingent shift of the economic interests of the most powerful Euro-zone states. Therefore the credibility of their commitment to EMU remained intact, and the markets did not feel the need to attack the Euro in the aftermath of the abandonment of the fiscal rule or to bet against the stability of EMU asking for higher yields. In brief, the future of EMU was safe, the credibility of the EMU project was still rooted on structural considerations, while the decision to relax the fiscal rule was justified by a change of macroeconomic preferences by the leading socio-economic groups at the ‘purely economic’ and at the ‘purely political level’ of analysis. References Accornero, A. (1994). La parabola del sindacato. Bologna: Il Mulino. Alesina, A. and V. Grilli (1993). ‘On the feasibility of a One-speed or multi-speed European Monetary Union’. Economics and Politics, Vol. 5 No. 2, July 1993. Andrews, D.M., (1993). ‘The global origins of the Maastricht Treaty on EMU: closing the window of opportunity’, in Cafruny, A. and Rosenthal G.G., (1993). The State of the European Community: The Maastricht Debate and Beyond. Boulder: Lynne Rienner. Andrews, D.M. (1994). ‘Capital mobility and state autonomy: toward a structural theory of international monetary relations’. International Studies Quarterly, No. 38, pp. 193-218. Artis, M. and Winkler (1997). ‘The stability Pact: safeguarding the credibility of the European Central Bank’, CEPR Discussion paper No.1688. Artis, M., (1998). ‘The unemployment problem’. Oxford Review of Economic Policy, Vol.14, No3. Artis, M. ( 2003). ‘EMU: four years on’, EUI: un-published paper. Baun, M. J. (1996). An Imperfect Union: The Maastricht Treaty and the New Politics of European Integration. Boulder, CO: Lynne Rienner. Blanchard, O.J. (1998). ‘Discussion to ‘Regional non-adjustment and fiscal policy’, Economic Policy, No 26, April 1998, p. 249.

The Future of EMU

301

Berger, H., de Haan, J., and S. Eijffinger (2000). ‘Central Bank Independence: an Update of Theory and Evidence’, CEPRDP No. 2353: (London: CEPR). Boyer, R. (2000). ‘The unanticipated fall out of the European Monetary Union: The Political and Institutional deficit of the Euro’. In C. Crouch (ed.) After the Euro. Shaping Institutions for Governance in the Wake of European Monetary Union. Oxford: Oxford University Press. Buelens, F. (1999). Globalisation and the Nation State. Aldershot: Edward Elgar. Buti, M., D. Franco and H. Ongena (1997). ‘Budgetary policies during recessions: retrospective application of the Stability and Growth Pact to the post-war period’. Economic Paper No 121, European Commission, Brussels. Cameron, D. (1997). ‘Economic and monetary union: underlying imperatives and third-stage dilemmas’. Journal of European Public Policy, 4, 455-85. Cameron, D. (1998). ‘EMU after 1999: the implications and dilemmas of the third stage’. Columbia Journal of European Law, 4, 425-446. Cameron, D. (1999). ‘Unemployment in the new Europe: the contours of the problem’, EUI Working papers, RSC No. 99/35. CEPR (2000). One money, many countries: monitoring the European Central Bank 2, London: CEPR. CEPR (2002), Surviving the slow-down, monitoring the EUROPEAN Central Bank 4. Cobham, D. and George Zis (1999). From EMS to EMU–1979 to 1999 and Beyond. Basingstoke: Macmillan. Commission of European Communities (1990). One market, One Money. Economic Papers, No. 44. Crouch, C. (1994). ‘Incomes policies, institutions and markets: an overview of recent developments’. In Dore, R., R. Boyer and Z. Mars (eds.), The Return to Income Policies, London: Pinter. Crouch, C. (2000). After the Euro. Oxford: Oxford University Press. Crouch, C. (2002). ‘The Euro, and labour markets and wage policies’, in K. Dyson (ed.), European States and the Euro. Oxford: Oxford University Press. Cukierman, A., S.B. Webb and B. Neyapti (1992). Measuring the Independence of Central Banks and its Effects on Policy Outcomes. The World Bank Review, 6, pp. 353-398. Currie, D. (1989). ‘European monetary Union or competing currencies: which way for monetary integration in Europe?’. Economic viewpoint, Sept. 1989. De Cecco, M. (1992). Monete in concorrenza. Bologna: Il Mulino. De Grauwe, P. (1996). International Money. Oxford: Oxford University Press. Duff, A. (1997). The Treaty of Amsterdam. London: Sweet and Maxwell. Dyson, K. H. F. and K. Featherstone (1996). ‘Italy and EMU as Vincolo Esterno.’ Journal of South European Society and Politics 2(3): 272-299. Dyson, K. and K. Featherstone (1999). The Road to Maastricht. Oxford: Oxford University Press. Dyson, K. (2000). The Politics of the Euro-Zone. Oxford: Oxford University Press. Dyson, K., (2002). ‘Germany and the Euro: Redefining EMU, Handling Paradox and Managing Uncertainty and Contingency’, in k. Dyson (ed.), European States and the Euro. Oxford: Oxford University Press.

302


Eichenberg, R.C. and R.J. Dalton (1993). ‘The Europeans and European Community: The Dynamics of Public Support for European integration’. International Organization, Vol. 47, pp. 507-534. Eichengreen, B. and Jeffrey Frieden (1994). The Political Economy of European Monetary Union. Boulder: Westview Press. Eichengreen, B. and Jeffrey Frieden (1998). Forging an Integrated Europe. Ann Arbor: University of Michigan Press. Eichengreen, B. and C. Wyplosz (1998). ‘The stability pact: more than a minor nuisance?’. Economic Policy, No 26, April 1998. Eijffinger, S., and De Haan, J. (2000). European Monetary and Fiscal Policy. Oxford: Oxford University Press. Engelmann, D., H.J. Knopf, K. Roscher, and T. Risse (1997). ‘Identity Politics in the European Union: The Case of Economic and Monetary Union’. In P. Minkkinen and H. Potomaki (1997). The Politics of Economic and Monetary Union. Kluwer Academic Publishers. Esping-Anderson, G. (1999). Social Foundations of Post-industrial Economies. Oxford: Oxford University Press. European Commission (1993). White Paper on Growth, Competitiveness, and Employment: The Challenges and Ways Forward into the 21st century, COM(93) 700 final, Brussels, 5 December 1993-http: //www.europa.eu.int/en/record/white/ c93700/contents.html European Council Meeting on 9 and 10 December I Essen-Presidency Conclusions, http: //ue.eu.int/newsroom European Council, 21-22 June 1996- Florence- Presidency Conclusions, http: // ue.eu.int/newsroom Fratianni, M., Jürgen von Hagen and Christopher Waller (1992). From EMS to EMU. London : Centre for Economic Policy Research. Frieden, J. (1991). ‘Invested interests: the politics of national economic policies in a world of global finance’. International Organization, N. 45, Autumn 1991. Frieden, J. (1994). The impact of goods and capital market integration on European monetary politics, Preliminary version, August. Frieden, J. (1998). The New Political Economy of EMU. Oxford: Rowman & Littlefield. Frieden, J. and E. Jones (1998). ‘The political economy of European Monetary Union: a conceptual overview’. In J. Frieden, D. Gros and E. Jones (1998). The New Political Economy of EMU. Oxford: Rowman and Littlefield Publishers. Flood, R.P. and N.P. Marion (1996). ‘Speculative attacks: fundamentals and selffulfilling prophecies’. National Bureau of Economic Research, Working Paper 5789, Cambridge (Ma): NEBR. Garret, G. (1993). ‘The Politics of the Maastricht Treaty’. Economics and Politics, Vol. 5, No. 2. Giavazzi, F. and M. Pagano (1988). ‘The advantage of tying one’s hands : EMS discipline and central bank credibility’. European Monetary Review, Vol. 32, pp. 1055-75. Gill, S. (1991). ‘Historical materialism, Gramsci and international political economy’, in C.N. Murphy and R. Tooze (1991). The New International Political Economy. Boulder: Lynne Rienner.

The Future of EMU

303

Gill, S. (1997). ‘An EMU or an Ostrich?: EMU and neo-liberal globalisation; limits and alternatives’. In P. Minkkinen and H. Potomaki (1997). The Politics of Economic and monetary Union. Kluwer Academic Publishers. Giugni, G. (1981). ‘The Italian system of industrial relations’. In P.B. Doeringer (ed.), Industrial Relations in International Perspective: Essays on Research and Policy. London: Macmillan. Gros, D. and N. Thygesen (1998). European Monetary Integration. London: Longman. Gourevitch, P., P. Lange and A. Martin (1981). ‘Industrial relations and politics: some reflections’. In P.B. Doeringer (ed.), Industrial Relations in International Perspective: Essays on Research and Policy. London: Macmillan. Gualmini, E. (1998). ‘Italy’. In H. Compston, The New Politics of Unemployment. London: Routledge. Hayek, F.A. (1970). ‘Denationalisation of money’. Hobart paper special, No. 70, October, London: IEA. Hayek, F.A. (1976). ‘Choice in currency: a way to stop inflation’. IEA occasional papers, No. 48. Hayek, F.A. (1979). ‘Toward a free market monetary system’, Journal of Libertarian Studies, Vol. 3, No. 1. Heipertz, M. and A. Verdun (2004). ‘The dog that would never bite? What we can learn from the origins of the Stability Pact’. Journal of European Public Policy, 11: 5 October 2004: 765–780. Heipertz, M. and A. Verdun (2005). The Stability and Growth Pact – Theorising a Case in European Integration. Paper prepared for delivery at the Ninth Biennial International European Union Studies Association Conference Austin Texas, 31 March – 2 April 2005. HM Treasury (1990a). ‘Economic and Monetary Union’. Treasury Bulletin, Summer 1990, London: HMSO. HM Treasury (1990b).’The UK proposal for a EMF and a hard ECU’. Treasury Bulletin, Autumn 1990, London: HMSO. Howarth, D. (2002). ‘The French State in the Euro-zone: ‘Modernization and legitimising dirigisme’. In K. Dyson (ed.), European States and the Euro. Oxford: Oxford University Press. Koen, V. (2000). EMU: one year on, OECD Observer, March-Paris, OECD. Krugman, P. (1989). ‘The case for stabilising exchange rates’. Oxford Review of Economic Policy 5, 61-72. Ingham, G. (1984). Capitalism Dived? The City and Industry in British Social Development. London: Macmillan. Lange, P., G. Ross and M. Vannicelli (1982). Unions, Change and Crisis: French and Italian Union Strategy and the Political Economy. London: Allen and Unwin. Marsden, D. (1992). ‘Incomes Policy for Europe? Or will pay bargaining destroy the single European market?’. British Journal of Industrial Relations, 30: 587-604. Martin, L. (1993). ‘International and domestic institutions in the EMU process’, in Economics and Politics, Vol. 5, No. 2.

304


Martin, L. L. (1994). ‘International and domestic institutions in the EMU process’. In B. J. Eichengreen and J. A. Frieden (eds.), The Political Economy of European Monetary Unification. Boulder: Westview Press, 87-106. McKay, D. (1999). ‘The political sustainability of European monetary Union’. British Journal of Political Science 29: 481. McKay, D. (2002). ‘The political economy of fiscal policy under monetary union’, in K. Dyson (ed.), European States and the Euro. Oxford: Oxford University Press. McNamara, K. R. (1994). ‘Economic and Monetary Union: Do Domestic Politics Really Matter?’. Paper Presented at the American Political Science Association Annual Meeting. McNamara, K. (1998). The Currency of Ideas: Monetary Politics in the European Union. Ithaca, NY: Cornell University Press. Merkel, W. (1987). Prima e dopo Craxi: le trasformazioni del PSI. Padova: Liviana Editrice. Middlemas, K. (1995). Orchestrating Europe, New York. Moravcsik,A. (1993a). ‘Preferences and power in the EC: a liberal intergovernmentalist approach’. Journal of Common Market Studies 31(4): 474. Moravcsik, A. (1993b). ‘Integrating international and domestic theories of international bargaining’, in P.B. Evans, H.K. Jacobson and R.D. Putnam (eds.), Double-edged Diplomacy: International Bargaining and Domestic Policy, Berkeley: University of California Press. Moravcsik, A. (1998). The Choice for Europe: Social Purpose and State Power from Messina to Maastricht. Ithaca, NY: Cornell University Press. Nickell, S. (1997). ‘Unemployment and labour market rigidities: Europe vs. North America’. Journal of Economic Perspectives, No. 11, 55-74. Obstfeld, M. and Peri, G. (1998). ‘Regional non-adjustment and fiscal policy’. Economic Policy, No 26, April 1998. Overbeek, H. (ed.) (2003). The Political Economy of European Unemployment. London: Routledge. Padoa-Schioppa, T. (1988). ‘The European monetary system: a long term view’. In Giavazzi, F., S. Micossiand M. Miller (1988). The European Monetary System. Cambridge: Cambridge University Press. Padoa-Schioppa, T. (1994). The Road to Monetary Union in Europe: The Emperor, the Kings and the Genies. Oxford: Clarendon Press. Pochet, P. (1998). ‘The Social Consequences of EMU. An Overview of National Debates’. In P. Pochetand and B. Vanhercke (eds.), Social Challenges of Economic and Monetary Union. Brussels: European Interuniversity Press. Regini, M. (1981). I dilemmi del sindacato. Bologna: Il Mulino. Regini, M. and I. Regalia (1997). ‘Employers, Unions and the State: The Resurgence of Concertation in Italy’. West European Politics, Vol.25, No.1, pp. 210-230. Rhodes, M. (1997). ‘Globalisation, labour markets and welfare states: a future of ‘Competitive corporatism?’’. EUI Working Papers, No. 97/36. Rhodes, M. (2002). ‘Why EMU is, or may be, good for European Welfare States’, in K. Dyson (ed.), European States and the Euro. Oxford: Oxford University Press.

The Future of EMU

305

Risse, T. (1998). ‘To Euro or not to Euro? The EMU and identity politics in the European Union’. Arena working papers, WP 98/1. Available on the web at the following address: http: //www.arena.uio.no/publications/wp98_1.htm. Romer, D. (1993). ‘Rational Asset-Price Movements without news’. The American Economic Review, Volume 83, Issue 5, 112-1130. Sandholtz, W. (1993). ‘Choosing Union: Monetary Politics and Maastricht.’ International Organization 47(1): 1-39. Salvati, M. (1984). Economia e politica in Italia dal dopoguerra ad oggi. Milano: Garzanti. Streeck, W. (1994). ‘Pay restraints without incomes policies’. In R. Dore, R. Boyer and Z. Mars(ed.), The Return to Incomes Policies. London: Pinter. Talani, L. (2000a). Betting for and against EMU. Aldershot: Ashgate. Talani, L.S. (2000b). ‘Who wins and who loses in the City of London from the establishment of EMU’. In C. Crouch (ed.), After the Euro. Shaping Institutions for Governance in the Wake of European Monetary Union. Oxford: Oxford University Press. Talani, L.S. (2003). ‘The political economy of exchange rate commitments: Italy, the UK and the process of European monetary integration’. In A. Cafruny and M. Ryner (eds.), A Ruined Fortress?: Neo-liberal Hegemony and Transformation in Europe. Oxford: Rowman and Littlefield. Talani, L. (2004). European Political Economy: Political Science Perspectives. Aldershot: Ashgate. Talani, L.S., (2005). ‘The European Central Bank: Between Growth and Stability’. Comparative European Politics, no. 3, (204: 231). Tsoukalis, L. (1997). The New European Economy Revisited. Oxford: Oxford University Press. Young, R. (1999). ‘The Politics of the Single Currency: Learning the Lessons of Maastricht’. Journal of Common Market Studies 37(2): 295-316. Vannicelli, M. (1984). A labor Movement in Search of a Role: The Evolution of the Strategy of the Italian Unions since 1943. Harvard University, PhD thesis. Verdun, A., and T. Christensen (2000). ‘Policies, Institutions and the Euro: Dilemmas of Legitimacy’. In C. Crouch (ed.) After the Euro. Shaping Institutions for Governance in the Wake of European Monetary Union. Oxford: Oxford University Press. Weale, A. (1996). ‘Democratic Legitimacy and the Constitution of Europe’. in R. Bellamy, V. Bufacchi and D. Castoglione (eds.), Democracy and Costitutional Culture in the Union of Europe. London: Lothian Press. Wooley, J.T. (1993). ‘Linking political and monetary union: the Maastricht agenda and German domestic politics’. Economics and Politics, 5(2).


Chapter 17

The Race to the Bottom: Tax Reform and Economic Development in the European Union Akis Kalaitzidis

This paper seeks to review the Flat Tax proposal and answer the question: ‘What factors ultimately determine whether or not the flat tax is a viable economic strategy for future economic growth?’ Many European economists identify the need for EU tax harmonization and point to the success of the flat tax in countries where it has already been implemented as evidence of its effectiveness. But the European commission and several leaders of the largest EU member states argue that the flat tax would be detrimental to EU tax strategy, as well as to the larger economic climate. Just as importantly, however, socio-political factors stand firmly in the way of the flat tax’s implementation in much of Western Europe. Now with decadeslong histories of ensuring socioeconomic equity through relatively high, graduated taxes, many ‘senior’ EU member states are path-dependent and have copious sunk costs. Using the case studies of the Baltic countries, Russia, Ireland, and Greece, I conclude that social and political factors are largely ignored by economists who support the implementation of the flat tax in what would otherwise be a worthwhile effort to reform EU tax strategy. The Proponents of the Flat Tax Jean Baptiste Colbert use to say that an artful tax man is one who plucks the goose to obtain the most feathers with the least amount of hissing.1 In Europe, it seems like these days the taxmen get all feathers no matter the amount of hissing. Ever since 1985 and the publication of Robert Hall’s and Alvin Rabushka’s The Flat Tax, the debate on progressive vs. flat taxes has raged (Hall and Rabushka 1995). What is the idea behind the flat tax? The key idea is that one low, simple and across the board tax will revitalize the productive capacities of the economies of European states. Facing a stagnant economy barely hovering above 2.4 per cent2 growth rates, several large EU states 1 As quoted in The Economist, ‘The Case for Flat Taxes’, 4/16/2005, Vol. 375, issue 8422, pp. 59-61. 2 ECB, Statistics pocketbook of January 2006 shows the average growth rate of the Euro zone in the years 1996-00 at 2.7 but the 01-04 average is 1.4 while the 2004 data is around 2.4.


308

such as France and Germany have to deal with persistent unemployment figures and an anxious population. The fiscal conservatives advocating the flat tax solution have the answer, pointing to the newly anointed EU member states of the East such as Estonia, Latvia Lithuania, and Slovakia, who took the flat tax gamble and have farexceed the expectations for economic growth in their societies. In fact when looking at Table 17.1

Table 17.1

GDP Growth in the EU3

Country Belgium Germany Greece Spain France Ireland Italy Luxemburg Netherlands Austria Portugal Finland EURO ZONE Czech Republic Denmark Estonia Cyprus Latvia Lithuania Hungary Malta Poland Slovenia Slovakia Sweden United Kingdom EU total

Average 1996-00 2.7 2.0 3.4 4.1 2.8 9.7 1.9 7.1 3.7 2.9 4.0 4.7 2.7 1.5 2.9 5.6 3.8 5.4 4.3 4.2 5.2 5.1 4.7 3.7 3.7 3.2 2.9

Average 2001-04 1.5 0.7 4.4 3.1 1.6 5.3 0.9 2.9 0.5 1.4 0.6 2.3 1.4 2.9 1.0 7.0 3.0 7.9 7.6 4.0 0.0 2.9 3.2 4.6 4.6 2.5 1.7

2003 0.9 -0.2 4.6 3.0 0.9 4.4 0.3 2.9 -0.1 1.4 -1.2 2.4 0.7 3.2 0.6 6.7 1.9 7.2 10.4 3.4 -1.7 3.8 2.7 4.5 4.5 2.5 1.2

2004 1.8 1.6 4.7 3.1 2.3 4.5 1.2 4.5 1.7 2.4 1.2 3.6 2.1 4.7 2.1 7.8 3.8 9.8 7.0 4.6 0.1 4.6 4.2 5.5 5.5 3.2 2.4

GDP growth in the EU, one immediately notices the significant difference in the rates of growth of these countries vs. the larger economies of the EU. The Baltic countries, Czech and Slovak republics are emulating the growth rates of Ireland

3

ECB, Statistics Pocket Book, January 2006.

The Race to the Bottom

309

during the 90’s and flat-taxers are ecstatic at what they see as confirmation of their beliefs. The flat tax proposal, as presented by Hall and Rabushka and elaborated upon by Richard Teather and Andrei Grecu of the Adam Smith institute, is composed of three elements: a) a low rate of taxation, b) the removal of most tax allowances and deductions and c) an increase in the personal allowance (Theather 2004; Grecu 2004). The Hall Rabushka proposal has two components, personal taxation and business taxation. In both, the underlying idea is tax code simplification and lower taxes. Most importantly, money is taxed only once in the system, i.e. if the state taxes personal income derived from working at a company plant then it is subtracted as labor wages at the business side. Thus, the income tax is the low flat rate multiplied by your income and subtracted by the income allowance. The income allowance is important because if you are earning wages below it, you do not have to pay taxes so that there is no undo burden on poor people. In fact, the idea is that the personal income allowance would be much higher than it is under a system of graduated taxes. This saves low income households money which they can allocate in turn for discretionary spending, thus increasing the economic activity within the state economy. As Hall and Rabushka note ‘A flat rate, applied to all income above a generous personal allowance, provides progressivity without creating differences in tax rates’ (Hall and Rabushka 1985). At the business end of this proposal the business tax would be the low flat rate times revenue minus labor wages (which are taxed as income), any reinvestment in plant equipment etc., and purchases of inputs from other businesses (which will be taxed as revenue on the other side). According to Hall and Rabushka, The business tax is a giant, comprehensive withholding tax on all types of income other than wages, salaries and pensions. It is carefully designed to tax every bit of income outside wages but to tax it only once … .In all cases, the elimination of deductions, when combined with other features of our system, moves toward the goal of taxing all income at a common, low rate. (Hall and Rabushka 1985)

Why employ such as system? Grecu provides a Decalogue as to why the flat tax system is beneficial, which Teather reduces to five general reasons: a) reduced compliancy costs, b) reduced avoidance and evasion, c) reduced distortion, d) reduced disincentives, e) reduced tax wedge (Grecu 2004; Teather 2004). Reduced compliancy is probably the strongest element of the flat tax system. It makes sense that a simple one page (as portrayed in The Flat Tax) tax return and a system without red tape bureaucracy would reduce the cost of operating and enforcing it. It is a very attractive alternative to the maze of legal hoops and paper filled offices that most citizens experience when dealing with a modern tax bureaucracy. In fact, it is estimated that compliance costs fell by 75 per cent to 90 per cent by all countries that adopted the flat tax.4 From the perspective of statesmen seeking to develop their economies, increase growth and create additional employment opportunities, the most attractive element is the assurance by flat-tax advocates that their national revenues 4 As estimated by Business and Finance Magazine, ‘Flat Tax: What would it do for Ireland?’ 5 May 2005.


310

will not dramatically decrease by such a radical change in the tax system. More over there will be instant wealth creation with faster economic growth (Mitchell 2005). World-renowned economist Arthur Laffer, father of the famous Laffer curve, argues that the effects on taxes are both arithmetic and economic. The arithmetic effect is simply that if tax rates are lowered, tax revenues (per dollar of tax base) will be lowered by the amount of decrease in the rate. The reverse is true for an increase in tax rates. The economic effect, however, recognizes the positive impact that lower tax rates have on work, output, and employment- and thereby the tax base- by providing incentives to increase these activities. … The arithmetic effect always works in the opposite direction of the economic effect (Laffer 2004).

He goes on to explain in detail how several tax cuts in the United States, both federal and state, have produced increased economic activity. The Harding-Coolidge tax cut raised real GDP by 1.4 per cent going from 2 per cent to 3.4 per cent and reduced unemployment by half (Laffer 2004). The Kennedy tax cut created a 5.1 per cent GDP growth rate and a drop to 3.9 per cent of the unemployment rate. Lastly the Reagan tax cut produced a jump of 3.9 per cent in real GDP growth rates up from 0.9 per cent while unemployment hovered around 7.9 per cent (Laffer 2004). The bottom line is that high taxes destroy jobs. It is a fact made obvious by a study in the magazine National Review which looks at the tax wedge, the difference between what an employee is paid and what he/she costs to the employer, see Table 17.2.5

Table 17.2

Taxes Destroy Jobs6

Country United States Switzerland United Kingdom Australia Japan Canada Austria Denmark Spain Germany Netherlands Italy Belgium Sweden France Correlation with tax wedge

5 6

Tax Wedge 15.5% 17.8% 18.3% 20.4% 23.2% 23.3% 29.5% 30.1% 30.9% 33.5% 33.7% 35.5 39.0% 39.5% 40%

GDP Growth 4.3% 0.0% 2.8% 4.0% 3.4% 1.6% 0.8% 0.3% 2.7% 0.2% -0.5% 0.1% 1.2% 1.9% 0.6% -0.55

National Review, ‘Chasing the Losers’, 13 September 2004. National Review, Chasing the Losers, 13 September 2004.

Unemployment 5.5% 4.2% 4.8% 5.9% 5.0% 7.4% 4.4% 6.5% 11.2% 10.3% 6.2% 8.4% 12.8% 6.0% 9.6% 0.63


311

Finally, Laffer as well as a host of other commentators argue that these results are not only generalizable but could also be internationalized. Laffer offers the case of Russia as an example of a successful large country implementing a low flat tax and tremendously increasing its revenues, see Table 17.3.7

Table 17.3

Incomes and Corporate Tax Rates in EU and Candidate Countries 2004-20058

Austria Belgium Bulgaria Croatia Czech Republic Cyprus Denmark Estonia Finland France Germany Greece Hungary Ireland Italy Latvia Lithuania Luxemburg Malta Netherlands Poland Portugal Romania Slovakia Slovenia Spain Sweden Turkey United Kingdom

Income Tax 2004-2005 50-50 50-50 29-29 35-45 32-32 30-30 59-26.5 26-26 36-35.5 49.6- 49.6 48.5-47 40-40 40-38 42-42 25-25 25-25 33-33 38.95-38.95 35-35 52-52 40-40 40-40 40-40 38-19 50-50 48-45 60-60 40-40 40-40

Corporate Tax 2004-2005 34-34 33-34 15.19.5 20-20 31-28 15-15 30-30 0-0 (on reinvested profits) 29-29 34.3-34.3 27.9-26.4 35-35 18-16 12.5-12.5 19-15 19-15 15-15 30.38-22.9 35-35 34.5-34.5 27-19 30-30 25-25 25-19 25-25 35-40 28-28 30-30 30-30

7 Arthur Laffer, p. 16 as well as numerous citations in The Economist, vol. 375, no 8422, 4/16/2005, pp. 59-61 and the Sunday Business Group, 11 September 2005, among others. 8 Flat Tax: Economic Panacea or Pandora? EurActive.com 25 September 2005 at .


312

Therefore if we look at the levels of taxation in different European Union countries and correlate them with real GDP growth rates and unemployment, we should be able to see the same results as in Russia. It is evident from Table 17.4 that this holds true in the cases of some of the newly admitted members of the EU, especially the small Baltic States and Slovakia who implemented the low flat tax schemes in the last decade.9

Table 17.4

Total general government revenues, expenditures and the share of hidden economy10

Country Estonia Latvia Lithuania Slovakia Czech Republic Slovenia Poland Russia Sweden Denmark Netherlands Ireland Portugal Greece France United Kingdom

Revenue

Expenditure

39 35 33 45 42 45 n/a n/a 58 59 45 36 45 46 51 41

36 36 36 47 45 47 n/a n/a 56 55 48 34 48 53 55 44

Hidden Economy 29 29 28 15 18 22 16 34 10.6 9.4 11.8 7.8 22.1 27.2 10.4 7.2

Unemployment 10 10.2 15 17.8 7.9 6.2 18.6 n/a 5.8 5.8 3.8 4.2 6.2 9.8 9.8 4.4

The Opponents of the Flat Tax As the flat tax movement increased, people paid closer attention and many have noted some of its peculiarities. Others have registered their complete disagreement with the scheme (Wolf 2005). The flat tax movement was particularly successful at capitalizing on the discontentment of citizens in the US and Europe with their current tax system. But the flat tax movement hardly offered a solution to some of 9 Estonia and Lithuania implemented the flat tax in 1994 Latvia in 1995, Russia 2001 and Slovakia in 2004. 10 All revenue and expenditure reported are per cent of real GDP in 2005 while hidden economy numbers are2000 estimates. The table covers data from Eurostat and Ivanova et al. Data sets. Eurostat, yearbook 2005, p. 160 and Anna Ivanova, Michael Keen, Alexander Klemm, The Russian Flat Tax, IMF Working Paper, January 2005, WP/05/16, p. 42 also some OECD hidden economy numbers are taken from Marco Ercolani, Inflation Tax and the Hidden Economy, .


313

the very serious problems plaguing these economies. Of course, the flat tax is much simpler and will provide for less compliance costs, less tax evasion, and a more rational bureaucracy, but that is precisely the distortion of the argument. All these points pale in front of the main attractive argument that this tremendous reform will provide much needed growth in the economy. Nevertheless, there is disagreement on all key points made by the flat taxers. First, do countries such as the US, Germany, France and the UK face a tremendous tax evasion problem? While some EU countries such as Portugal and Greece have a higher problem of tax evasion than the rest of the EU, it is quite ridiculous to base one’s support for a flat tax on the tax evasion argument, especially since the EU is home to some of the least corrupt countries such as Denmark and Sweden (McArthur 1997). However, the flat tax as a remedy for tax evasion seems to work in the former Communist countries such as Russia; (see Figure 17.1). Yet, the reasons that tax evasion in Russia seems to differ from Western style evasion is because it is possible even when firms do not operate in a cash environment and most of it is risk free (Yakovlev 2001). Therefore, it is nonsense to equate the pre-expansion EU members with the Russian economy in the period 2000-2003. Tax evasion does concern the EU – as it is evident from the latest spat with the Swiss over the withholding of tax – as most states are, but it hardly seems to breaking the bank (Gumbel 2002). Second, the claim that the flat tax generates an increase in revenues for the state is highly disputed (Wolf 2005). In fact, the case most talked about, Russia, was able to increase revenues from their flat (13 per cent) income tax by about 26 per cent (Ivanova et al. 2005). Nevertheless, extensive research done by Ivanona, Keen and Klemm shows no evidence of the effects of the tax itself on the revenues, especially since there was no shift on the tax payer base and the increase of revenue came from

Figure 17.1 Annual Russian Tax Revenue, as shown in Arthur Laffer, p. 16

314


those affected less by the tax decrease (Ivanova et al. 2005). Even with compliance increasing, the authors do not attribute the increase to the tax cut but to better enforcement. In fact they note rather damningly for the flat-taxers ‘a key lesson must be that tax-cutting reforms of this kind should not be expected to pay for themselves by greater work effort and improved compliance’ (Ivanova et al. 2005). Evidently, when one looks at the percentage of the hidden economy (which corroborates the amount of compliance and tax evasion) and the level of revenue and spending in the Eastern European countries that recently joined the EU, the results of the flat tax seem less impressive (see Table 17.4). Flat tax countries have not reached a higher level of taxing and spending, and have a high percentage of hidden economy. They also consistently have higher unemployment than Euro-25 and Euro-15, while countries that the tax wedge (see Table 17.2) would predict would have higher unemployment have consistently less than those averages (besides Greece which is the only consistent outlier). One can say that there is more evidence for the case Ivanova, Keen, and Klemm make that in all flat tax countries it is the enforcement that has gotten better and not compliance. Therefore it is hard to argue that the flat tax leads to increase in revenues because it is simply not supported. Third, the impact of the flat tax affects sectors of taxpayers differently and shifts the burden of revenue collecting to the middle class. No one denies, not even the inventors of the flat tax, that this idea will translate into a complete exemption for the poor and a huge tax cut for the rich. Evidently, the bulk of the money that the state will raise for its needs will come from the middle class. In the United States, the birth place of this idea (specify what idea), the flat tax movement has stalled along with the political campaigns of people who supported the idea. In the words of presidential candidate Bob Dole ‘I will not shift the burden of revenue collecting to the middle class.’11 The idea is, of course, that such an action will unleash more productive capacities of the economy by increasing the available money for people to reinvest. This is what President Bush senior called ‘voodoo economics’ while he was president (Krugman 1995). Fourth, it is not just a flat tax it is a low-low flat tax. The most interesting part of the debate is the relationship between taxes and growth. In fact, if the economy works as flat-taxers have suggested, then it makes sense to create a flat tax to increase the growth prospects of your economy. But the catch is that if your flat tax is 30 per cent it is too high. It is hard to discern whether it is the rate of taxation or the flatness of it that can potentially affect the economy positively. Some have suggested that it is neither (Krugman 1995). Short-term interventions to the economy have little effect on growth. Yet, there have been studies that showed the relationship between taxes and unemployment to a positive one, i.e. the more taxes you have the more unemployment (Scharpf 2000). However, in a study done on tax mixes, welfare state, and unemployment, Achim Kimmerling finds that it is not just the level of taxation employed in the economy, but also what kinds of taxes the state employs to raise revenue (Kimmerling 2005). The issue is, as I have pointed out, that some states, such as Denmark, Sweden, and the Netherlands, with high spending and a

11 As quoted in ‘A Flat out No’, American Spectator; Jul 96, Vol. 29 Issue 7, p. 14.


315

history of social programs, defy the traditional flat-tax prediction that they will have high unemployment and a stagnant economy. Kemmerling finds that, First tax mixes do matter at least in the short run. The overall impact of income taxation is considerably lower than that of social security contributions and with some caution indirect taxes. … Second, taxation has a stronger effect for sheltered sectors with low productivity. … The hypothesis that globalization has increased the harmful impact of taxation on employment could not be substantiated (Kimmerling 2005).

Yet, the idea of reducing taxes is that it would provide for increased growth because both internal productive forces would be unleashed and reinvested in the economy and that the economy would be more attractive for outside investment and aid growth. It seems, however, that it has the exact opposite effect. Cutting taxes shifts the burden of raising revenue in Europe to other indirect sources of taxation because of the pressure to keep up with the significant demands of the welfare state, thus harming any chance there was for the economies to grow because of these tax cuts (Kimmerling 2005). Scharpf himself concluded that it is not the tax burden that ultimately matters for employment, but rather, its structure (Scharpf 2000). It is not the flattening or in some respects the lowering of the taxes that will bring growth to any economy, but a combination of factors that are beyond the flat tax argument’s scope. This debate may be informed better from the experience of the country with the largest economic growth in the 90s rather than the ideologically purist dictum ‘if you build it they will come.’ Strategies of Economic Growth There are several issues that need to be discussed before I examine the successful case of Ireland, such as path dependency and sunk costs. First, the issue of path dependency refers to a process ‘characterized by self reinforcing sequence of events’ (Deeg 2004). Once states have made the initial commitment on a path, say progressive taxation and high spending on welfare, they then have a tremendous incentive to stay the course and recover their investment. Once they are down that path of learning and adaptation as well as coordination and maximization of efficiency using this system, they will solidify the path. Institutional path dependency is an unavoidable variable especially when one is looking to radically alter this particular institution. Awareness of path dependency begs the question: is it possible to change the entire tax system in continental European state which is heavily invested in tax revenues to support large welfare states? The answer is that it would depend on several variables which the flat-taxers cannot control. Most importantly, though, the proponents of low flat taxes have not taken into account path dependency at all. Their argument that European as well as the US economies will be on their way to rapid growth – as shown in the Eastern European countries – and they do not discuss the different paths taken by continental European countries as opposed to the new members of the EU. Second, there is the issue of sunk costs. Sunk costs are the costs that have been incurred and that cannot be recovered. Campos and Coricelli summarized the economic performance of Eastern European countries as follows: ‘output fell,

316


capital shrank, labor moved, trade reoriented, the structure changed, and institutions collapsed‘ (Campos and Coricelli 2002). Nevertheless, these economies, as opposed to other continental EU members, had a free hand to create, institutionalize and move forward with completely new economic and political systems. There are transition costs that these economies will have to endure that come from their communist past. However, in general their approach to their political and economic systems could basically start from scratch. There are no sunk costs to the flat tax choice in a country with 50 per cent hidden economy and unemployment above 10% with real GDP growth in the 1-2 per cent range. There were no variable costs in the communist economies and with the collapse of the systems; they go any which way they wanted. Sunk costs make the type of socioeconomic activity virtually immovable in the continental European states. Paul Pierson called the European welfare state an immovable object because even though it is in crisis, its opponents lack support in the form of political mobilization and there is high institutional stickiness (Pierson 1998). The recent French protests over youth labor laws are a good example considering that the aim of the law was to improve youth employment. Yet, youth protested it because it is an alternative to an existing attractive system in which job security and benefits are good enough to outweigh the difficulty in finding a job due to low turnover. Political mobilization is high not on the side of reform but on the side of the status quo as are politicians whose first priority is to get reelected. In other cases minority groups such as workers unions have been able to veto state decision to move away from standard institutions and/or cut back on welfare payments. Recently, in Greece, the banking unions have been able to defeat laws that cut back on their benefits, and send at least one minister home. Myles and Pierson have found that pension reforms are possible only in young systems, making an important point for sunk cost and institutional path dependency (Pierson 1998). The Baltic States, Slovakia, and Russia are relatively newly formed institutional structures still struggling to overcome the communist legacy and to develop their economic capacities to the fullest. As a result, the Central and Eastern European states (CEE) are not very good comparison candidates for the well-established EU states, even as they currently grow three and four times faster than large EU states. But what about the Anglo-Saxon economies with the already established neoliberal background? As flat-taxers argued, they are good candidates for tax reform and the benefits of a low flat tax. More specifically, Ireland, which in the 1990’s outpaced even China in growth, becoming Europe’s economic miracle, provides some evidence that economic liberalism and lower taxes will invigorate any sluggish economy. Ireland does not have one low flat tax but it does have the lowest corporate taxes of all EU states. I have previously argued, along with others, that several key ingredients played a role in Ireland’s magic carpet ride: location, corporatism, and taxation among others (Kalaitzidis 2004). Yet many factors do not highlight a causal effect between taxes and growth. First, Ireland’s attractive location is both real and imaginary. Ireland is located between the US and the EU but it was mostly the marketing technique of a state desperate to attract investment that sold the Irish as the gateway to Europe. First you take Dublin and then you take Berlin as the song would have it. It was a successful


317

strategy that paid off with tremendous Foreign Direct Investment coming into Ireland, turning it into the famed Celtic Tiger. Most of this investment originated in the US and was mainly consumer electronics and financial capital with American multinationals accounting for 70 per cent of the Irish exports.12 It is, however, a nasty sidekick of such impressive development that the Irish economy is completely dependent upon corporate America and the business cycle in the US.13 Is this a victory for those who believe that low taxes are the way to go? It is hardly, given the low probability of the new EU members to approximate the Irish conditions. New EU members may very well be closer to the large EU economies, i.e. Germany, and have raced to cut taxes and rationalize their bureaucracies, but they are still behind in infrastructure, they do not have the highly skilled and English-speaking working class that Ireland possessed. The Irish are not afraid of the new EU members, as a recent report of the Irish central bank notes, because even in the areas that the Eastern European countries have shown an increase, i.e. pharmaceuticals and medical equipment, the investment is qualitatively different; mergers and acquisitions serving the local markets rather than ‘Greenfield operations serving the EU community (Murphy 2006). Secondly, there are issues with the Irish corporate taxation situation. The Irish developed an economic growth plan in the 50s but it wasn’t until the 90s that the plan was successful. The Irish Government established the IDA, which became very important in promoting industrialization in Ireland in the 50s. But what really started to turn things around is their membership to the EU (O’Hearn 1998). After 1973, Ireland started witnessing their first foreign investment from overseas. But chronic domestic unemployment and outward migration, as well as the distraction of small domestic industries remained (O’Hearn 1998). In the 90s however, Ireland became the home of the home electronics industry for Europe and never looked back. Approximately a third of every computer in the EU is made in Ireland.14 In 1995, the GDP growth of the country was an astonishing 10 per cent per cent of which 75 per cent was transnational corporation related (O’Hearn 1998). Finally, the sustainability of such growth in such a small country is not possible but the Irish are not at all unhappy with their situation. Yet, it is unlikely that this success story is replicable elsewhere, especially in Eastern Europe. Conclusions This chapter has sought to answer whether there are conditions under which the Euro-zone countries would change their tax system to a flat tax. As some of the CEE moved towards reduction in taxation and implementation of a flat tax schedule, many among such influential publications as The Economist and the Wall Street Journal advocated that the rest of Europe should heed the example of the new EU members and do the same. However, after taking a closer look at the macroeconomic as well as the sociopolitical conditions in the new member states of the EU, such as the

12 ‘Dancing the Irish Jig’, The Economist, 4/17/2004, Vol. 371, No 8371. 13 ‘High-tech Shudders for the Celtic Tiger’, Europe, Issue 406, May 2001, p. 14. 14 ‘High-tech Shudders for the Celtic Tiger’, Europe, Issue 406, May 2001, p. 14.

318


Baltic countries and Slovakia, one can argue that a move away from the progressive tax schedule is not likely for the continental EU members. The Baltic States as well as Slovakia face qualitative different constraints than their counterparts in the EU. They suffer no sunk costs, other than the ones already in place while under communism which they have already decided to abandon. The particular path dependency towards any system of taxation or for that matter any type of economic development plan are low. However, the Euro-zone countries have high path dependency to their taxation systems and copious sunk costs to deal with and making it unlikely that they switch their tax schedules. As the ideological battle between those who see taxes as the kiss of death for economic growth and those who believe that graduated taxation is fair and necessary in the developed world continues to rage. The case of Ireland was examined as an alternative model of economic growth for the new EU members. However, the Irish model is hardly replicable because several key pre-conditions, such as corporatism, quality workforce and infrastructure, do not exist. Nevertheless, the CEE members of the EU will not develop on their own since the key ingredient in the case of Irish, as well as Portuguese and Greek development, is membership to the EU which they do posses. References Campos, N and F. Corricelli (2002). ‘Growth in Transition: What we Know, What we Don’t and What we Should.’ Journal of Economic Literature XL: September, 793-836. Deeg, R. (2004). ‘Path Dependency, Institutional Complementarity, and Change in National Business Systems’, in G. Morgan et al. (eds.), Changing Capitalisms? Complementarities, Contradictions and Capability Development in an International Context. Oxford: Oxford University Press. Ercolani, M. (2000). ‘Inflation Tax and the Hidden Economy’, , accessed May 1st 2006. Grecu, A. (2004). Flat Tax – The British Case. London: Adam Smith Institute. Gumbel, P. (2002). ‘Silence is Golden’. Time Europe 160: 12, September 16th. Hall, R. and A. Rabushka (1995). The Flat Tax, 2nd Edition. Stanford: Hoover Institution Press. Ivanova, A. et al. (2005). ‘The Russian Flat Tax’, IMF Working Paper, January WP/05/16. Kalaitzidis, A. (2004). Does Regionalism Undermine the State: Evidence from Ireland and Greece (PhD Dissertation: Temple University). Krugman, P. (1997). Peddling Prosperity: Economic Sense and Nonsense in the Age of Diminished Expectations. NY: W.W. Norton and Co. Laffer, A. (2004). ‘The Laffer Curve: Past, Present and Future’. The Heritage Foundation: Backgrounder No 1765, (The Heritage Foundation). McArthur, S. (1997). ‘Cracking Down on Evasion’. Europe, April Issue 365, 42.


319

Mitchell, A. (2005). ‘A Brief Guide to the Flat Tax’. The Heritage Foundation: Backgrounder 1866, (The Heritage foundation). Morgan, G. et al. (eds.) (2004). Changing Capitalisms? Complementarities, Contradictions and Capability Development in an International Context. Oxford: Oxford University Press. Murphy, A. (2006). ‘An Assessment of the Implications of EU Enlargement for Foreign Direct Investment and Jobs in Ireland’, Quarterly Bulletin, No. 1, (London: Irish Central Bank. It can also be found at: http: //www.centralbank.ie/data/QrtBullFiles/ Signed%20Article%20Assessment%20of%20Implications%20of%20EU%20Enla rgement%20for%20FDI%20and%20Jobs.pdf, accessed May 1st 2006. O’Hearn, D. (1998). Inside the Celtic Tiger. London: Pluto Press. Pierson, P. (1998). ‘Irresistible Forces, Immovable Objects: Post Industrial Welfare State Confront Permanent Austerity’., Journal of European Public Policy 5: 4, pp. 539-60. Scharpf, F. (2000). ‘The Viability of Advanced Welfare States in the International Economy: Vulnerabilities and Options’. Journal of European Public Policy, 7: 2, pp. 190-228. Teather, R. (2004). A Flat Tax for the UK: A Practical Reality. London: Adam Smith Institute. Yakovlev, A. (2001). ‘Black CashTax evasion in Russia: Its Forms, Incentives, and Consequences at Firm Level’. Europe-Asia Studies 53: 1, pp. 33-5. Wolf, M. (2005). ‘The case for the Flat Tax is Overblown’, The Financial Times, published online September 8th 2005, accessed May 3rd 2006.


Chapter 18

Common Misconceptions of Germany and the EMU Heather Baca-Greif, Poul Thøis Madsen and Esben Tranholm Nielsen

A number of scholars argue that since the Maastricht Treaty entered into force in 1993, the EMU has been an automatic process (Frieden 1998; Moravcsik 1998; Jones 1999; Loedel 1999). However, the reality of the EMU process may be far less mechanical and far more dependent on individual decisions made over time, signifying a changing, rather than static nature of the EMU. Although often overlooked in scholarly literature, one such decision can be identified in 1998, when the German Bundestag and Bundesrat voted in favor of moving forward with the EMU. This chapter examines a public debate in Germany over the EMU. This debate can be divided into: a European identity debate, an economic debate, and a price stability debate. We demonstrate that these debates formed a necessary link between German interests and the EMU. Without this link, the German élite may have favored a postponement of the Euro past 1999, leading to a loss in the momentum of the EMU, and any number of changes to what we now know as the European Monetary Union. The contribution of this article lies in empirical and theoretical work, which dispels two common misconceptions in the academic literature. One is that the EMU was finalized in 1991, leaving the EMU on a linear path and unlikely to change. The other is that social constructivist and rational choice theories cannot be combined to provide a more comprehensive understanding of the EMU process. The second misconception is an important contribution to European integration literature because it provides the possibility of bridging seemingly conflicting theoretical literature. This bridge will allow for more comprehensive empirical examinations of relevant information and inclusion, rather than the exclusion of information that does not fit a chosen theory. Germany and the EMU: Common Misconceptions Why did Germany join the EMU? This question has attracted a lot of interest from a variety of scholars over the years. Given the advantages of the European Monetary System (EMS), the German economic interest in the EMU were not clear. Many attempts to explain the German position have been made, but no contributions have succeeded in delivering a fully satisfactory answer.

322


We join the discussion by dispelling two common misconceptions. The first misconception is that the EMU was finalized with the Maastricht Treaty, leaving the Euro ‘locked in’. Our analysis of the German debate 1993 – 1998, however, shows that the German preferences were not decided until a much later date. The second general misconception is that economic interest-based and constructivist European integration theories cannot compliment each other in explaining European monetary integration. The theoretical ‘schism’ between economic-interest-based and constructivist theories lies at the very heart of explaining why no single theory so far has been able to account for the process of European monetary integration. The current paper will address the ‘poor’ state of European integration theorising within economic and monetary issues by including rationalchoice economic theories within a social-constructivist framework. As a consequence of the first misconception, the most common period studied in relation to Germany and the EMU is between 1988 – 1991.1 Hereby one disregards two important factors: first, the German Federal Constitutional Court ruling on the 12th of October 1993, which stated that German participation in the EMU needed to be approved by the Bundestag and Bundesrat on the 23rd and 24th of April 1998; and second, that the German debate about acceptance of the EMU began to gain momentum and intensity from late 1993 in the German newspapers, gradually fading away again after the decision to join the EMU made by the Bundestag and Bundesrat in April of 1998. 2 The extensive public debate in Gernany after Maastricht suggests that the issues being discussed were not yet settled. The German Federal Constitutional Court ruling in 1993 politicized the EMU debate in Germany for the first time. The initial decision to join the EMU made in Maastricht had been driven in large part by the governmental élites and Bundesbank representatives at the European level with only minor interference from actors in the national arena (Dyson and Featherstone 1999). Thus, the Constitutional court ruling in 1993 ‘brought the people in’, thereby contributing to the explicit formulation of German preferences towards the Euro. Pertaining to the second misconception, one of the contributions of this article is to demonstrate that although we do not subscribe to the ontological view of rational choice, we would like to contribute to the debate on how the perception of rational choice can be included into a broader social constructivist framework as a norm which ‘constructs’ élite preferences. 1 Cf. Dyson and Featherstone (1999), Moravscik (1998), Maes (2004), McNamara (1998) and Verdun (1998). 2 We have only been analysed German newspapers back to the beginning of 1993 through FAZ, because the electronic archive does not extend past this point in time (Die Zeit does not cover 1989-1996, but goes back to 1948). Authors studying the period until 1991 (Dyson and Featherstone 1999; Risse et al 1999) have identified surprisingly little public debate about the Euro in Germany. Concurrently, we observed very little debate through the year 1993. Even when the ERM in the EMS was abandoned on the 31 July 1993, the political élites did not question the prospects of instituting the EMU (0.3.08.1993. F.A.Z. ‘Nach den Brüsseler Währungsentscheidungen spricht Waigel von einem “Befreiungsschlag”’). Our study indicates that the German EMU debate first picked up momentum after the rulings by Constitutional Court on 12 October 1993.

Common Misconceptions of Germany and the EMU

323

In order for our analysis of the German debate to support our claims, we will need to convincingly demonstrate two things: first, that there was actually a debate taking place with substantial content about important issues at stake for Germany; second, that social constructs, which include economic interests, can be seen as factors having a real impact on the decisions finally taken in 1998. The following section will begin with a discussion of previous explanations of European monetary integration. Then, we will present the approach used in the empirical analysis. The proceeding three sections summarize the main public debates in Germany from 1993 to 1998: the need for the Euro in order to maintain European identity; advocacy of the economic benefits of entering the common currency; and the need for maintaining price stability in Germany. The article concludes with an analysis of the three debates taken as a whole, and relates them in the conclusion to the research question: Why did German finally decide to join the EMU? Élite Preferences in European Monetary Integration That European Monetary Integration and the EMU have been élite driven processes and are generally accepted among scholars. What is not agreed upon, however, is what led the élites to their decision to join the Common Currency. The main diverging explanations regarding the German decision to join the EMU emphasize either geopolitical, structural economic, or European national identity aspects. Despite the differences in these theoretical perspectives, by and large, they share two problems: a focus exclusively on the Maastricht period; as well as relying heavily on only one theory to the general exclusion of other theories. Garton Ash (1993) and Grieco (1995) have argued that Germany accepted European monetary integration because of a desire to overcome a new security dilemma in Europe, mainly with France, who feared Germany in the aftermath of unification. However, it has been argued by Risse et al. (1999) and Moravscik (1998), that this theory is factually incorrect because the German élite was in favour of the EMU long before reunification took place. Rather, we argue that although security issues may very well have played a role in the early phases of the EMU negotiations, they were of minor importance in the period of 1993 – 1998. Other scholars advance an almost purely rational choice economic explanation. Frieden (1998), Jones (1999), Loedel (1999), and Moravscik (1998) argue that the political élites were sensitive to the interests of economic actors in Germany. In an increasingly international liberal market setting, the preferences of business leaders were progressively making their way into political discourse, and influencing political élites in their policy decisions. National identity explanations have also been forwarded, emphasising aspects of preference formation in accounting for the behaviour of (German) decision-makers. Risse et al (1999) argue that the general élite support for the single currency was based on German post-World War II identity ‘Euro-patriotism’ which was supposed to overcome the German nationalist and militarist past once and for all. In other words, having a European identity by implication leads to a positive stance towards

324


major steps forward in political, as well as economic, European integration – such as the EMU. These contributions by no means provide an exhaustive list of explanations. Ivo Maes (2004), Karl Kaltenthaler (2002), and Dyson and Featherstone (1999), for example, advance views which fall outside the four categories listed above. Although diverging from the more frequent explanations, these scholars do share one common view that the question of securing price stability played a decisive role in the German decision to join the EMU. Maes (2004) argues that Keynesian policy had lost its attraction in France due to the stagflation of the 1970s, leading France to side more with German price stability policy on the EMU. Karl Kaltenthaler (2002) argues that German interests in European monetary integration were initiated by German geo-political concerns. After the Maastricht Treaty and reunification, he sees German interests as focused on maintaining price stability, namely through the Stability Pact proposal. Dyson and Featherstone (1999), in their book ‘Road to Maastricht’ focus on political actors whose preferences for EMU were influenced by the ordo-liberal emphasis for maintaining price stability through tough convergence criteria, rules safeguarding excessive budget deficits, sanctions for noncompliant countries, and central bank interdependence. Dyson and Featherstone also identify a German historical feeling of responsibility to bring Europe together through European integration. These contributions tend to exclude or ‘overlook’ facts, which do not match the chosen theory. Although many important ideas are spelled out in these contributions, the constraints of whichever theory (or explanation) is chosen then demands that other important aspects are excluded from, or not seen as central to, the German decision. Because of this approach, an explanation has never been given, which combines all of the factors contributing to the German decision to join the EMU. Another reason why other explanations are excluded from a particular theory stems from ontological differences. In the academic literature presented above, theories that explain German preferences based on overcoming a security dilemma, or based purely upon economic explanations; operate with a rational choice ontology. National identity explanations, on the other hand, operate with social constructivist ontology, which is fundamentally in opposition to that of rationalists. As identified above, both rationalist economic as well as national identity theories, clarify parts of the complex motives underlying the German decision to join the EMU. We propose that both can be included within a social constructivist framework, meaningfully including cost/benefit calculations as a social construct. Social Constructivism and Rational Choice Theories The term ‘social constructivism’ was first introduced in a non-integration setting in the 1960s, when Berger and Luckmann (1966) articulated how and why individuals construct their reality. Social constructivism is based on the premises that social reality is constructed and reproduced by actors during their daily practices. The seminal work in relation to social constructivism and European integration was introduced in 1999 in a special edition of the Journal of European Public Policy. A


325

systematic and focused perspective of social constructivism was applied to the study of European integration. Scholars such as Risse et al. (1999) and Marcussen et al. (1999) have used identity analysis to describe some main features of social constructions, which they call ‘identity constructions’. One generally agreed upon aspect of an identity construction is that it is stable, and that the longer a particular identity exists, the more stable it becomes. Risse et al. (1999) and Marcussen et al. (1999) also recognize individuals as making in-group and out-group identifications as part of a social construction. In-group identification is formed because it allows members to feel connected by a shared sense of norms and values, creating a social construct, or collective identity. In order for there to be an in-group, there must also be a distinction of what constitutes the out-group which participants of a collective identity feel is outside of and/or in opposition to that of their own group. Collective identities can be changed quickly and radically during what scholars call a critical juncture (Checkel 1999; Risse et al. 1999; Marcussen et al. 1999). A critical juncture occurs when there is too much information present rejecting a given social construction which forces an in-group into an identity crisis. This critical juncture is also thought to present the possibility of forming a new identity construction. Individuals who are in a position of power, and who come up with an alternative to the undesirable identity, are said to be entrepreneurs. They are able to turn their individually held idea into broader normative belief or new collective identity. In the absence of a critical juncture, collective identities are seen as relatively stable but still able to change incrementally. This gradual change can be understood through discourse analysis. The scholar Thomas Diez (1999) emphasizes that meanings within discourses are never fixed. Diez explains language as having specific meanings at specific moments in time, which change or shift over time, and allow development to occur. As the discourse relating to a collective identity changes or shifts within a political arena, the perception of the collective identity also changes or shifts, making new political developments possible. New developments in discourse can change policy practices (Milliken 1999). It should therefore be possible to observe the incremental change in a given identity, and understand why actions were taken by observing the related discourse. The emphasis on communicative and discourse practices constitutes another feature of social constructivist approaches. As argued by Thomas Diez, discursive practices establish a relationship in which actors ‘understand certain problems in a certain way, and pose questions accordingly.’(Diez 1999: 603) Although it is understood that individuals shape meaning, they do not act as autonomous subjects, but from a normative context in which they are situated. Rational choice theories explain actors as driven by their rational self-interest, which cause decisions to be based on a (mainly) economic cost-benefit analysis. Social constructivist theories emphasize norms and values as being decisive for how actors perceive a particular situation, thus providing actors with an understanding of how they should act. A major ontological difference between rational-choice and social constructivist theorizing is that whereas the former views identities and

326


interests of actors as exogenously given, the latter views them as endogenous and socially constructed through interaction. This does not imply that all social constructivist theories exclude the possibility that it could be a norm to take economic cost-benefit analyses into account. According to John Gerard Ruggie (1998), constructivism seeks to map the full array of ideational factors that shape actors` outlooks and behaviour, ranging from culture to aspirations and principal beliefs, to cause-effect knowledge of specific policy problems (cost/benefit calculations). Scholars Finnemore and Sikkink (1998) have also introduced the notion of ‘strategic social constructions,’ in which they describe normative context as contributing to the occurrence of cost-benefit calculations. Furthermore social constructivists like Jupille, J., Caporaso, J. A., and Checkel, J.T. (2003) have attempted to integrate the constructivist and rational choice approaches, and the general impression in the literature is still that these two approaches are mutually exclusive. But as we suggest in our analysis, the question is not whether it is possible to integrate the two approaches, but rather how it could and should be done. Pollack captures the concept of rational choice calculations as being a social construct very well when he writes, ‘one theory claims to subsume the other so that, for example, rational choice becomes a sub-set of human behaviour ultimately explicable in terms of the social construction of modern rationality’ (Pollack 2005: 24). The Approach In our empirical analysis, we apply grounded theory, where theoretical categorizations are developed ‘via empirical study and abstraction, comparing on the basis of new data whether these categories fit and, if necessary, reformulating the categories so that they are empirically valid.’ (Milleken 1999: 234) The role played by theory in this kind of analysis is different than in most of the contributions reviewed above in that the focus is placed on explaining the empirical evidence as thoroughly as possible, rather than focusing on one specific theory. Our empirical analysis consists of a mapping of the German public debate pertaining to the EMU during the period of 1993 to 1998, which we processed in three steps. The first step was to identify relevant articles. The second step was to choose the articles which best exemplified the main ideas being presented and translate key quotes into English. The third and last step was to identify patterns in the quotes which were then further separated and condensed into three main debates. The dominant debates consist of: the need for the Euro in order to maintain European identity; the economic benefits of entering the common currency; and the need for maintaining price stability in Germany. The three dominant debates are grouped from information contained in German newspapers Die Zeit, Die Welt, the Frankfurter Allgemeine, and magazine Der Spiegel. It is important to acknowledge that élite arguments for each of the following debates are often interrelated, containing elements of multiple debates. The phrases or statements presented in the following represent the dominant features within each debate, and are separated for clarification purposes only.


327

The European Identity Debate One of the prominent public debates consistently favored the Euro because of its association to European identity. Throughout this debate, élite statements identify individuals who were in favour of the EMU and European integration within the German in-group. Individuals or groups who were identified as being skeptical towards, or not in favor of, the EMU were placed in the out-group which was identified with Germany’s national socialist past. Values and norms of European identity, namely European integration and peace, are also promoted during this debate. Maintaining peace through introducing the Euro was constructed as a value of European identity in order to overcome past German nationalism and to prevent conditions such as those leading to WW II. This debate was heavily emphasized in 1995, while 1993-94 debates were dominated by European Monetary Institute3 (EMI) placement and price stability. In 1995, Scharping and Schroeder created ‘enormous controversy’ by allegedly discussing the postponement of the Euro past 1999.4 This allegation created a strong reaction among other élites who formed responses in favor of the EMU and revolved around in-group/out-group categorization. The minister of Foreign affairs, Klaus Kinkel (FDP), classified Scharping and Schroeder in the European out-group as: ‘those who question the Euro by cheap populism,’ which he felt would lead to ‘a relapse into protectionism and into national quarrels.’ Kinkel identified acceptance of the common currency with the European in-group of ‘good euro political spirit.’5 CDU Secretary-General Peter Hintze identified himself with the European in-group by describing the EMU as a ‘durable peacekeeping’ mission, and depicted the outgroup, such as Scharping and Schroeder, as people who ‘talk down to Europe’ and therefore ‘harm Germany.’6 In 1996, Chancellor Kohl made a speech to the Irish Parliament in connection with the European Council’s pending decision on the Stability and Growth Pact, classifying himself with the in-group by supporting European Integration. Kohl proclaimed that a German who was not in favor of integration was ‘betraying the future of his home country and also the future of Europe.’7 In 1997, Joscka Fischer of Bundnis 90/Die Grunen also identified the European in-group as those who could 3 The two main tasks of the EMI were to strengthen central bank cooperation and monetary policy co-ordination, and to make the preparations required for the establishment of the European System of Central Banks (ESCB), for the conduct of the single monetary policy and for the creation of a single currency in the third stage. 4 (F.A.Z., 31.10.1995) – A postponement of the EMU past 1999 was mentioned on several occasions up until the decisions to join the EMU were made in 1998. Talk of postponing the EMU past 1999 occurred in: F.A.Z: 29.10.1993; 05.07.1994; 28.04.1994; 14.05.1995; 15.05. 1995; 28.06. 1995; 11.10.1995; 11.11. 1995.; 24.09.1996.; 03.12. 1996; 01.02.1997; 11.07.1997; 25.07.1997; 09.02.1998. Die Welt: 11.10.1995; 31.10.1995; 06.01.1997; 13.03.1997; 25.03.1997; 09.04.1997; 10.04.1997; 16.05.1997; 12.06.1997; 23.06.1997; 26.06.1997; 28.06.1997; 13.09.1997. 5 31.10.1995, F.A.Z.: Kinkel: Währungsunion ist nicht ‚irgendeine Idee’. 6 31.10.1995, F.A.Z.: ‚Die SPD-Führung sieht sich in der Rolle des Mahners’. 7 02.10.1996, Die Welt: ‘Address by Chancellor Helmut Kohl to Dail Eireann’.

328


see that ‘history is Europe’s principal identity,’ and that European integration (the EMU) was of extreme importance. Fischer also asked Germans to reject any debate about postponement of the euro past 1999 because he believed that it could have led to a situation similar to Germany’s past.8 The chairman of SPD and minister president of Saarland, Oscar Lafontaine, stated that the SPD wanted to participate in ‘introducing the euro as scheduled in order to build a united Europe,’ placing the SDP in the in-group of European identity, and thereby ‘overcome[ing] the national rivalries of this century.’9 The importance of European identity is articulated as a desire to overcome Germanys National Socialist past. Political élites as well as economic interest groups stressed that the EMU was the only way of maintaining European identity. As the starting date of the Euro grew nearer, the acceptance for EMU was also tied to the maintenance of peace in Europe. In the public debate, German élites voiced a belief that the EMU was necessary for peace, and that non-acceptance of the EMU would mean war. In 1996, Chancellor Kohl emphasized that the Euro would ensure peace, identifying that it would be the best weapon ‘against silly national chauvinism of the past.’10 Joscka Fischer also argued that further European integration would be a way to avoid the struggles of the past when he stated that: ‘The alternatives are to go back to a European system of balance of power or go ahead with European integration,’ calling the EMU a ‘ peaceful answer.’11 Rudolf Scharping, chairman of the SPD committee in Bundestag, expressed to the Bundestag in May 1997 that the Euro was important ‘for the sake of peace and assured future of the whole continent.’12 Chancellor Kohl, during his address to the German Bundestag on the 23rd of April, 1998, also argued that the introduction of the EMU was ‘an important building block for a European peace order,’ and proclaimed: ‘nationalism is war.’ 13 All of these statements make the pronounced identification of the Euro as necessary for European identity and peace, the alternative of which would be a return to Germany’s past and the possibility of war. The Economic Interest Debate Political and interest group élites also engaged in an economic cost-benefit debate concerning the acceptance of the final stage of the EMU. The main components of this debate revolved around the advantages of having a common currency and the drawbacks of rejecting the Euro. The advantages described were that the Euro would make the Single Market more efficient and more competitive on the international 8 21.03.1997, Die Zeit: ’Joscka Fischer: Warum ich für den Euro bin’. 9 03.12.1997, Die Welt: ’Der SPD geht es um einen Richtungswechsel. 10 23.11.1996, Die Welt: ’Kohl erklaert EWU zur Schicksalsfrage’. 11 21.03.1997, Die Zeit: ’Joscka Fischer: Warum ich für den Euro bin’. 12 16.05.1997, Die Welt: ’Sparpolitik gefährdet Währungsunion’. 13 29.04.1998, Die Zeit: ’Durch eine gemeinsame Waehrung eint Helmut Kohl die Europaeer, aber die Deutschen wenden sich von ihm ab. Chronik eines Triumphes im Angesicht der Niederlage’.


329

market. These arguments were tied to an understanding that a common currency would bring lower prices, better resource allocation, certainty of investment (through transparency of the economy), and that this would lead to higher productivity, growth, and competitiveness. Élites also argued that the Euro would eliminate currency fluctuations and transaction costs, as well as prevent the overvaluation of the D-mark. German Foreign Minister Klaus Kinkel (FDP) stated that the Euro was the ‘logical end stone’ of the Single Market, emphasizing that a stronger Single Market would bring all Europeans ‘more growth, employment, and prosperity.’14 These statements exemplify Kinkel’s belief that an efficient Single Market would be beneficial for Germany. The SPD executive committee described the Euro as able to increase ‘the overall economic efficiency of the EU market,’ as well as being necessary for the European economy ‘to profit within international competition.’15 Rudolf Seiters, deputy chairman of the CDU/CSU committee, reiterated what the SPD executive committee had said by declaring, ‘the Euro strengthens the European position in the world economy.’16 Rudolf Seiters described the Euro as able to make the Single Market more efficient, based on the logic that investments would be easier with a common currency. He portrayed this by saying that it would be beneficial for Europe to have ‘a common currency in connection with the Single European Market,’ underlining that a European common currency ‘would make investment easier.’17 Economic interest groups also favoured the Euro, based on the argument that an efficient Single Market would make Europe and Germany more competitive on the international market. Chairman of Mercedes Benz, Helmut Werner, declared that Europe could not ‘be competitive in the world’ without a common currency18 and maintained that the Euro was ‘the last chance for Europe’ in relation to nations such as the USA, Japan, and Southeast Asia.19 Political élites and business interest groups in Germany also emphasized that a stable common currency would end currency fluctuations and transaction costs. Jürgen Trittin from alliance 90/Die Grünen expressed that die Grünen (Greens) were fundamentally ‘for a common European currency,’ and that Germany needed ‘firm rates of exchange between all important European Union countries,’ because of ‘the costs of the currency fluctuations on German exports into European Union countries.’20 Klaus Kinkel (FDP) declared that exchange rate fluctuations were damaging to the German economy, stressing that if the Euro was not adopted, it would lead to a loss of economic growth and higher unemployment. Kinkel stated in 1997 that fluctuations in the exchange rate cost Germany ‘one per cent growth in 14 31.10.1995, F.A.Z.: ’Kinkel: Währungsunion ist nicht “irgendeine Idee’ . The same argument was used by Reinhard Kudiss from the Federation of German Industry (BDI) – 1996/27, Der Spiegel: ‘Starke lobby für den Euro’. 15 31.10.1995, F.A.Z.: ’Die SPD-Führung sieht sich in der Rolle des Mahners’. 16 11.10.1995, Die Welt: ’Die Waehrungsunion ist keine Waehrungsreform’ 17 11.10.1995, Die Welt: ’Die Waehrungsunion ist keine Waehrungsreform’ 18 02.12.1995, F.A.Z.: ’Standpunkte: Helmut Werner – Keine Alternative zur Währungsunion’. 19 1996/17, Der Spiegel: ’Die letzte Chance’. 20 31.10.1995, F.A.Z.: ’Kinkel: Währungsunion ist nicht irgendeine Idee’.

330


1995 and a loss of 350,000 to 700,000 jobs across the European Union.’21 Helmut Werner claimed that currency fluctuations had a catastrophic effect on German ‘competitive ability,’ meaning that economic progress was ‘destroyed within a short time.’22 Helmut Werner also stated, in 1996, that the changes in European currencies alone cost Mercedes-Benz ‘600 Million D-Mark last year.’(1995)23 Manfred Gentz, from Daimler-Benz, proclaimed that the Euro as beneficial for Germany because transaction costs between currencies in Europe would end. Gentz estimated that the Daimler-Benz-company paid ‘100 million D-Mark’ for European currencies transaction costs a year.24 Similarly, Kinkel argued, ‘Mercedes in 1995 had exchange rate costs of 600 million, BMW lost a billion, and Siemens approximately 400 million D-Mark.’25 Finally, it was also argued that the Euro should be adopted to prevent the D-Mark from being overvalued, which would be damaging for the German economy. In connection with the 125th year anniversary of Dresdner Bank, Chancellor Kohl, and the German Minister of Economics, Günter Rexrodt, stressed that if the final stage of the EMU were postponed, it would have a negative impact on Germany because of the prospects for an overvalued currency. The governmental coalition stated that a postponement of the EMU would ‘make the D-Mark overvalued,’ leading to a ‘loss of exports.’26 These statements also indicate a fear of postponing the Euro, emphasising the negative consequences of not launching the Euro in 1999. The Stability Debate Preceding the German political parties’ acceptance of the Euro in 1998, the ability of the Euro to secure price stability was also heavily discussed and debated. This discourse emphasized central bank independence as well as the need for strict fulfilment of convergence criteria by all member states. From the perspective of identity analysis, central bank independence and convergence criteria fulfilment were seen in Germany as a way of overcoming the ‘other,’ or Germany’s own past of hyperinflation, and. having economic success through policies of low inflation and controlled budget deficits. Unlike the European identity debate which constantly favoured the EMU, German political élites and interest groups participating in the stability debate expressed that the EMU was contingent upon price stability. If price stability could not be sufficiently secured, a choice in favour of stability could lead to a rejection of the Euro being launched in 1999. The German discourse about ensuring price stability arose in 1993, with a discussion about the institutionalization and competencies of the (EMI). During 1994 21 13.03.1997, Die Welt: ’Verschiebung wäre ein Ruckschlag’ and 13.03.1997, Die Welt: ’Verschiebung wäre ein Ruckschlag.’ 22 02.12.1995, F.A.Z.: ’Standpunkte: Helmut Werner – Keine Alternative zur Währungsunion’. 23 1996/17, Der Spiegel: ’Die letzt Chance’. 24 08.09.1997, Die Welt: ’Offener Streit um den Euro.’ 25 13.03.1997, Die Welt: ’Verschiebung wäre ein Ruckschlag’. 26 10.06.1997, Die Welt: ’Kohl und Rexrodt: -Euro-Diskussion schadet wirtschaft.’


331

and 1995, German élites put pressure on other EU-member states and proposed the Stability Pact in order to ensure that other states complied with the strict fulfillment of the convergence criteria. Around the time of the Stability Pact proposal (19951996), a change in discourse occurred, shifting the focus away from fulfillment of convergence criteria, and focusing instead on the starting date of the Euro. From late 1995, both political and business élites produced public statements, assuring that stability would be secure with the starting date of the Euro in 1999. These statements of assurance also stressed the fact that it was absolutely necessary for the Euro to start in 1999, implicitly expressing that delay of the Euro was not an option. There were also élites who emphasized that the starting date was more important than strict fulfillment of convergence criteria, and those who emphasized that stability should be prioritized ahead of the starting date for the Euro. Throughout this public debate, the Bundesbank consistently stressed that price stability and convergence criteria had to be respected. Discourse about securing price stability through an independent central bank was present in connection with the institutionalization and the competences assigned to the EMI, leading up to the establishment of the EMI on 1 January 1994 (the second stage of EMU). Before the actual decision of where to place the EMI and ECB was made on 29 October 1993. Chancellor Kohl stated that both institutions (EMI and ECB) should be located in the same place.27 Kohl wanted to make sure that ‘the EMI and ECB would be placed in Frankfurt,’ hereby underlining the German norm of price stability by sending the message that the ECB would be just as committed as the Bundesbank to securing price stability.28 The acceptance of this message can be seen in 1995, when Klaus Kinkel, German Minister of Foreign Affairs, stated that: ‘the independence of the ECB in Frankfurt will help to guarantee price stability.’29 Rudolf Seiters, deputy chairman of the CDU/CSU committee, discussed the impact that the placement of the EMI in Frankfurt would have on Germans. Seiters said that placing the forerunner of the European Central Bank, the EMI, in Frankfurt ‘has, and will continue to have, a major psychological effect on Germans.’30 Seiters also describes the connection that would be made between the EMI and the positive attitudes and trust that Germans had in the Bundesbank because of its ability to assure price stability in Germany.31 During 1994 and 1995, an extensive discourse developed, placing a strong emphasis on the strict fulfillment of the convergence criteria and placing particular pressure on other member countries, due to their non-fulfillment of the convergence criteria. Again the German political élites and interest groups were stressing the norm of price stability in this instance by putting pressure on other states to pursue policies 27 29.10.1993, F.A.Z.: ’EG-Gipfelteilnehmer wollen über Währungsinstitut entscheiden.’ 28 29.10.1993, F.A.Z.: ’EG-Gipfelteilnehmer wollen über Währungsinstitut entscheiden.’ 29 31.10.1995, F.A.Z.: ’Kinkel: Währungsunion ist nicht “irgendeine Idee.’ 30 02.12.1995, F.A.Z.: ’Welches Europa wollen wir? Erwartungen an die Regierungskonferenz 1996.’ 31 02.12.1995, F.A.Z.: ’Welches Europa wollen wir? Erwartungen an die Regierungskonferenz 1996.’


332

of low inflation and controlled budgets. Securing low inflation policies can be seen in this discourse as a prerequisite for German acceptance of the EMU. In 1994, the German Finance Minister, Theo Waigel, expressed that he was ‘disappointed that the convergence criteria were not respected by EU Member States other than Germany and Luxembourg,’ and stressed that Greece, Italy, Portugal and Spain had to fulfill the convergence criteria.32 By naming the countries in violation, Waigel was placing them in the out-group, in order to add further pressure for those countries to meet the convergence criteria. In July of the same year, the German Government articulated concerns that the Commission would not be able to secure price stability and controlled budget deficits by other EU Member States when the Commission did not take action against Ireland exceeding the debt criteria.33 Then in 1995, German Finance Minister, Theo Waigel, insisted that ‘the pressure to fulfill the stability criteria will not diminish,’34 and later emphasized that ‘the emphasis on price stability will last.’35 The FDP chairman, Wolfgang Gerhardt, pointed out that there was pressure on the member states of the European Union to ‘ensure stable budgets, to fulfill the criteria laid down in the Maastricht Treaty, and to maintain price stability.’36 On the 10th of November 1995, the Federal German Finance Ministry and Finance Minister Theo Waigel proposed the Stability Pact. During this time, other EU-member countries’ were observed by Germany as not fulfilling the convergence criteria, the euro was postponed at the Madrid Summit in 1995, and the planed start of the euro in 1999 was drawing closer. These events put Germany in a difficult situation. Based on a construction of the European identity norm, and economic advantages, the German political élites can be seen as wanting to launch the EMU in 1999. However, it was also necessary for élites to insure price stability for the future of the EMU. In November of 1995, the Stability Pact was proposed in order to secure controlled budget deficits and price stability through issuing penalties to noncompliant countries. In the Stability Pact proposal, Theo Waigel expressed that the ‘goal of the German initiative’ was ‘to make the Monetary Union more acceptable for Germany,’ and for the EMU to be ‘a stability-community’ in the long run.37 In an article in Der Spiegel, Bundesbank President Hans Tietmeyer was also said to be more optimistic about securing ‘a stability oriented monetary union’ through the Stability Pact.38 The Stability Pact proposal served the purpose of reassuring the élites that the EMU would adhere to the principle of price stability. Around the time of the Stability Pact proposal (late 1995), a change in stability discourse occurred. This debate refocused on the starting date of the Euro, rather than on convergence criteria fulfillment. Both political and business élites produced public statements assuring of stability in the EMU. Waigel said, that there was no

32 33 34 35 36 37 38

15.02.1994, F.A.Z.: ’Nur zwei Länder erfüllen die Maastricht-Kriterien.’ 05.07.1994, F.A.Z.: ’Neuer Streit um die Maastrichter Kriterien.’ 28.06.1995, F.A.Z.: ’Waigel: Die europäische Währung darf nicht Ecu heissen.’ 18.12.1995, F.A.Z.: ’Banken begrüssen den Euro-Beschluss.’ 31.10.1995, F.A.Z.: ’Kinkel: Währungsunion ist nicht “irgendeine Idee.’ 11.11.1995, F.A.Z: ’Stabilitätspakt soll die Währungsunion sichern.’ 1996/49, Der Spiegel: ’Der Termin steht im Vertrag.’


333

possibility of a ‘weak euro’ due to the institution of the Stability Pact.39 Rudolf Seiters (CDU/CSU) stressed: ‘The priority of price stability and of independence of the future ECB has been clearly formulated, even more clearly than is the case with the Bundesbank.’40 This declaration was meant to assure people in Germany that the ECB would not only be as stable, but also possibly even more stable, than the Bundesbank. The chairman of the executive committee of Mercedes Benz, Helmut Werner, affirmed that without the strict fulfillment of the stability criteria, ‘no one, not even the German industry, would want to join the EMU.’41 According to this statement, German industry would never agree to the EMU if they did not believe that the stability criteria would, and could, be fulfilled. In 1996, the German Chancellor, Helmut Kohl, also stated: ‘Whoever thinks that Germans are so Euro-fanatic that they would give up their concern for stability, is mistaken.’42 Here, Kohl was giving his assurance that the priority for stability would not waver, even if it was in conflict with European identity. In 1997, Helmut Kohl declared before the Bundestag that the federal government would do everything that it could to ‘enable the start of the Euro as scheduled, and make sure that it would be durable over time.’43 This statement was meant to assure that both norms of European identity (by starting on schedule), and Stability (by being durable over time) would be achieved. Emphasis placed on the starting date also reveals a strong desire not to delay the introduction of the Euro past 1999. The German Foreign Minister Klaus Kinkel restated that neither European identity nor price stability was in danger when he declared: ‘The Euro must and will come as scheduled on the 1st of January 1999, with strict fulfilment of convergence criteria.’ 44 It is clear that not all élites felt assured that both the starting date in 1999 and convergence criteria fulfillment could be achieved. Some statements prioritized the starting date of 1999 ahead of convergence criteria fulfillment. According to Der Spiegel, there were many German banks and industry representatives who were in favor of starting the Euro even if the stability criteria had to be softened.45 For example, Manfred Schneider, the Head of the Board at Bayer, stated that he would like the Euro area to include all of the big states of the EU from the beginning – independently of fulfilment of Maastricht convergence criteria.46 Also, in an open letter, ex-chancellor Helmut Schmidt accused the Bundesbank president, Hans Tietmeyer, of putting to much emphasis on the fulfilment of the convergence criteria. Schmidt implied that Tietmeyer would have personal motives for not starting the EMU on time, saying that Tietmeyer would be ‘downgraded from de facto monetary

39 11.07.1997, Die Welt: ’An Strukturreformen führt kein Weg vorbei.’ 40 11.10.1995. Die Welt: ’Die Waehrungsunion ist keine Waehrungsreform.’ 41 02.12.1995, F.A.Z.: ’Standpunkte: Helmut Werner – Keine Alternative zur Währungsunion.’ 42 23.11.1996, Die Welt: ’Kohl erklaert EWU zur Schicksalsfrage.’ 43 28.06.1997, Die Welt: ’Kohl versichert: Euro kommt pünktlich’ and 04.04.1997, Die Welt: ’Kohl verbreitet Optimismus.’ 44 05.09.1997, F.A.Z.: ’Kinkel: Der Euro wird pünktlich kommen.’ 45 27/1996, Der Spiegel: ’Starke lobby für den Euro.’ 46 27/1996, Der Spiegel: ’Starke lobby für den Euro.’

334


king to the branch office director of the ECB.’47 Despite his personal attack on Tietmeyer, Schmidt was also displaying the fact that he valued the starting date above strict convergence criteria fulfilment. Other élites prioritized convergence criteria fulfillment ahead of the starting date for the Euro. In 1997, Minister of Bavaria Edmund Stoiber (CSU) argued: ‘We must interpret stability criteria strictly and narrowly. This has primacy over timetable... I also represent people from the street, and for them inflation has catastrophic consequences. For people from the streets, stability is the most social thing.’48 This states clearly that Stoiber prioritized convergence criteria ahead of a starting date, fearing the social consequences of an unstable Euro. According to Die Welt, Minister President of Bavaria Edmund Stoiber (CSU), the Minister President of Saxony Kurt Biedenkopf (CDU), and the Minister President of Lower Saxony Gerhard Schroeder (SPD), all favoured the beginning of the third stage of the EMU with only those states, which fulfilled the convergence criteria and were against the ‘soft’ (or political) interpretation of criteria.49 Postponing the Euro in Germany past the 1st of January 1999 shows the clear prioritization of convergence criteria fulfilment ahead of the starting date of the Euro. The Bundesbank can be seen as a consistent actor throughout the entire debate over whether Germany should join the third stage of the EMU, emphasising price stability and fulfilment of convergence criteria as preconditions for launching the EMU. Bundesbank President Hans Tietmeyer said that the Maastricht Criteria ‘are not going to be diluted.’50 On the 27th of March 1998, Hans Tietmeyer presented the position of the Bundesbank at the cabinet meeting of German CDU/CSU government on the commitment to strict fulfillment of the convergence criteria by the European states. Tietmeyer stated that the entrance into the EMU was ‘stabilitetspolitisch vertretbar,’ meaning stability-politically tenable. However, Tietmeyer also pointed out that some states were not able to dismantle the concerns of others ‘about the sustainability of their fiscal situation.’51 Franz-Christoph Zeitler, member of the Bundesbank council and the president of Landeszentralbank in Bavaria, expressed the same concerns as the Bundesbank president, and stressed that the decision to launch the Euro in 1999 was purely ‘a political one.’52 The statement by FranzChristoph Zeitler exemplifies the strong concerns within the Bundesbank about whether the principle of price stability would be respected in the EMU. Interpreting the Three Debates During the European identity debate, élites emphasized their understanding of the EMU as a means to overcoming the national socialist past of WWII. The end of 47 08.11.1996, Die Zeit: ’Helmut Schmidt: OffenerBrief an Bundesbankspräsident Hans Tietmeyer.’ 48 28.06.1997, Die Welt: ’Eine Euro-Verschiebung mündet nicht im Chaos.’ 49 08.09.1997, Die Welt: ’Offener Streit um den Euro.’ 50 15.05.1995, F.A.Z.: ’Vor 1999 keine Einheitswährung.’ 51 28.03.1998, F.A.Z.: ’Währungsunion stabilitätspolitisch vertretbar.’ 52 28.03.1998, F.A.Z.: ’Währungsunion stabilitätspolitisch vertretbar.’


335

WWII brought about a critical juncture in Germany, when the amount of information that contradicted the German National Socialist identity became unbearable. The new identity construction, which was introduced as an alternative to National Socialism, was that of ‘European’ identity. Scholars such as Marcussen et al. (1999) have argued that the concept of a ‘United States of Europe’ that supported a ‘European’ rather than ‘Nationalist’ identity provided an in-group with which the German population was once again able to feel a sense of collective positive identity. The European Monetary Union was yet another institution which was tied to European identity in Germany. Over time, European identity became a more stable concept, as it was used to bolster and strengthen the integrity of political institutions in Germany. The out-group, in this case, those who would consider a delay of the Euro, were given the clear message: ‘Nationalism is war,’ relating anyone questioning the starting date of the Euro in 1999 to Germany’s National Socialist past. Economic cost/benefit calculations were also a key part of the élite considerations being taken into account when voting in favour of the Euro. This public debate from 1994 to 1998 revolved around the economic benefits of accepting the Euro, and the economic drawbacks of not accepting the Euro. From a social-constructivist standpoint, economic market rationality/rational choice thought in politics can be seen as influencing the German élites’ perception of the EMU as a normative trend in present day politics. As argued by scholars studying social constructions, it has become more acceptable to base decisions on economic cost/benefit analyses (Gill 1995; Ruggie 1995; Finnemore 1996; Risse 2004). The debate about Germany joining the EMU was no exception to this norm. Klaus Kinkel stated that the EMU would bring ‘more growth, employment and prosperity.’ Kohl and Rexrodt stressed that an overvalued D-mark would lead to a ‘loss of exports.’ These are two prime examples of élites using economic rational-choice considerations as the ‘normal’ way of explaining the EMU when judging whether or not the Euro was a good idea for Germany. The German economic debate demonstrates that the German élite valued rational choice calculations, and that they were considered as factors for joining the common currency. The heavy emphasis in the German debate 1993 to 1998 on the norm of securing price stability and a stable Euro can be viewed as an identity construction particular to Germany. As also argued by other scholars, the memory of the devastating social effects of two hyperinflations and the rise of Nazism, followed by the subsequent economic success (Wirtsschaftwunder) in 1950s seemingly by adhering to the principle of price stability, endowed the German population with a sense of collective pride. This has been identified as leading to the belief that price stability policies in the form of an independent central bank, policies of low inflation, and controlled budget deficits were a crucial precondition for economic success and stable social order (Merlingen 2001; Maes 2004; Dyson/Featherstone 1999; Rieter et al. 1993). Thus, the public debate about stability, which existed leading up to the start date of the Euro in 1999, can also be seen as an identity norm originating in the late 1940s, when order was restored to the German market economy following WWII. Here, Germany’s other is once again defined as Germany’s past during WWII, when the devastating consequences of two hyperinflations and a world economic crisis were felt. When considering the EMU, the German élite also took these norms and values

336


into consideration. First, by creating an independent European Central Bank and placing it in the same place as the Bundesbank, Germany could continue to be tied to the concept of an independent central bank. Additionally, placing considerable pressure on fulfilling the convergence criteria emphasized the aspects of Germany’s price stability culture. In the conclusion we link these three debates to the research question: Why did Germany join the EMU? Conclusion This chapter dispels two common and persistent misconceptions in analyzing the important question of why Germany decided to join the EMU. The first misconception is that the EMU was finalized in 1991 with the Maastricht Treaty, thereby leaving the Euro ‘locked-in.’ Contrary to this conception, a public debate took place in Germany following the Maastricht Treaty, which made the EMU acceptable to the Germans, without which the Euro may have been postponed. The German debate 1993 – 1998 can be used as a case study, dispelling the general perception of European monetary integration as being a functional and pre-determined process since the days of the Maastricht Treaty. Rather, the empirical data presented in the current paper places impetus on the notion that European monetary integration was not ‘locked in’ with the Maastricht Treaty. The second general misconception in most of the literature is that when using either economic interest based or constructivist European integration theories, using one automatically excludes the other. Although the ontological perspectives are fundamentally opposed, by understanding cost/benefit analysis as a socially acceptable norm, cost/benefit analysis becomes an observable aspect of the social constructivist framework, and economic outcomes can then be explained theoretically, without excluding non-rational norms and values. The German élites’ perception of the EMU was formed through and by the debate taking place from 1993 to 1998, which ultimately led to the decisions to join the EMU as late as 1998. The notion was created that the EMU was an integrated part of German European identity. This debate also contributed to making the élite convinced that the EMU would benefit Germany economically. This debate also contributed to assuring the élite that the EMU would not lead to instability. In order to assure stability, the public debate formed conviction among élites that the EMU was a matter of urgency. If postponement occurred yet again, stability might be damaged, economic benefits would be lost, and European integration would suffer immensely. Favoring the postponement of the Euro past 1999 could have altered the entire course of the EMU and hence of EU as we know it. Previous analyses of the German decision have focused on the period prior to the Maastricht Treaty, and academic contributions have tended to focus on either German Europeanism (like Risse et al.), the possible economic advantages (like Moravscik), or that Germany said yes because the EMU was modeled after the German stability preferences (like Dyson and Featherstone). Our analysis suggests that all of these


337

motivations were underlying the German decision to join – overlapping and mutually strengthening the argument for German participation. This complexity also implies that it is impossible to understand the German decision without applying a multi-dimensional theoretical framework. By applying only one theory, previous contributions, by necessity, have only been able to cope with parts of the complex motives underlying the German decision to join the EMU, which explains why the German decision has continued to be a puzzle. References Berger, P. L., and T. Luckmann (1966). The Social Construction of Reality: A Treatise in the Sociology of Knowledge. New York: Anchor Books. Checkel, J. T. (1999). ‘Social construction and integration’. Journal of European Public Policy, vol. 6, no. 4 (Special Issue). Diez, T. (1999). ‘Speaking “Europe”: the politics of integration discourse’. Journal of European Public Policy, vol. 6, no. 4, (Special Issue). Dyson, K., and K. Featherstone (1999). The Road to Maastricht. Oxford: Oxford University Press. Finnemore, M. and K. Sikkink, K. (1998). ‘International Norm Dynamics and Political Change’. International Organisation, 52, 4. Frieden, J. (1998). ‘The Euro: Who Wins? Who Loses?’. Foreign Policy, Vol. 112. Garton Ash, T. (1993). In Europe’s Name: Germany and the Divided Continent. New York: St.Martin’s Press. Grieco, J.M. (1995). ‘The Maastricht Treaty, Economic and Monetary Union, and the Neo-Realist Research Programme’. Review of International Studies, 21 (1). Jones, E. (1999). The Politics and Economics of Monetary Union. Boston: Rowan and Littlefield. Jupille, J., J.A. Caporaso and J.T. Checkel (2003). ‘Integrating Institutions: Rationalism, Constructivism, and the Study of the European Union’. Comparative Political Studies, 36/1-2. Kaltenthaler, K. (2002). ‘German Interests in European Monetary Integration’. Journal of Common Market Studies, vol. 40, No. 1. Loedel, P. (1999). Deutsche Mark Politics: Germany in the European Monetary System, Boulder. Maes, I. (2004). ‘On the Origins of the Franco-German EMU Controversies’. European Journal of Law and Economics, vol. 17. Marcussen, M., T. Risse, D. Engelmann-Martin, H.J. Knopf and K. Roscher (1999). ‘Constructing Europe? The evolution of French, British and German nation state identities’. Journal of European Public Policy, vol. 6, No. 4 (Special Issue). McNamara, K. R. (1998). The Currency of Ideas – Monetary Politics in the European Union. Ithaca: Cornell University Press. Merlingen, M. (2001). ‘Identity, Politics and Germany´s Post-TEU Policy on EMU’. Journal of Common Market Studies, September, Vol. 39, No. 3. Milliken, J. (1999). ‘The Study of Discourse in International Relations: A Critique of Research and Methods’. European Journal of International Relations, Vol. 5, No. 2.

338


Moravcsik, A. (1998). The Choice for Europe – Social Purpose and State Power From Messina to Maastricht. London. Rieter, H. and M. Schmolz (1993). ‘The ideas of German Ordoliberalism 1938-45: pointing the wayto a new economic order’. The European Journal of the History of Economic Thought, 1: 1, autumn. Risse, T., D. Engelmann-Martin, H.J Knope and K. Roscher (1999). ‘To Euro or Not to Euro?: The EMU and Identity Politics in the European Union’. European Journal of International Relations, vol. 5, no. 2. Ruggie, J. G. (1998). ‘What Makes the World Hang Together? Neo-Utilitarianism and the Social Constructivist Challenge’. International Organization, Vol. 52, No. 4. Verdun, A. (1998). ‘The Role of the Delors Committee in the Creation of EMU: An Epistemic Community’. EUI Working Papers, European University Institute. No. 98/44. Newspaper Articles 29.10.1993, F.A.Z.: ‘EG-Gipfelteilnehmer wollen über Währungsinstitut entscheiden‘ 15.02.1994, F.A.Z.: ‘Nur zwei Länder erfüllen die Maastricht-Kriterien‘ 05.07.1994, F.A.Z.: ‘Neuer Streit um die Maastrichter Kriterien‘ 28.04.1995, F.A.Z.: ‘Welches Europa wollen wir?’ 15.05.1995, F.A.Z.: ‘Vor 1999 keine Einheitswährung’ 28.06.1995, F.A.Z.: ‘Waigel: Die europäische Währung darf nicht Ecu heissen‘ 11.10.1995, Die Welt: ‘Die Waehrungsunion ist keine Waehrungsreform’ 31.10.1995, F.A.Z.: Kinkel: Währungsunion ist nicht ‘irgendeine Idee‘ 31.10.1995, F.A.Z.: ‘Die SPD-Führung sieht sich in der Rolle des Mahners‘ 11.11.1995, F.A.Z: ‘Stabilitätspakt soll die Währungsunion sichern‘ 02.12.1995, F.A.Z.: ‘Standpunkte: Helmut Werner – Keine Alternative zur Währungsunion’. 02.12.1995, F.A.Z.: ‘Welches Europa wollen wir? Erwartungen an die Regierungskonferenz 1996‘ 18.12.1995, F.A.Z: ‘Banken begrüssen den Euro-Beschluss‘ 02.10.1996, ‘Address by Chancellor Helmut Kohl to Dail Eireann’ 08.11.1996, Die Zeit: ’Helmut Schmidt: Offener Brief an Bundesbankspräsident Hans Tietmeyer‘ 23.11.1996, Die Welt: ‘Kohl erklaert EWU zur Schicksalsfrage’ 1996/27, Der Spiegel: ‘Starke lobby fuer den Euro’ 1996/49, Der Spiegel: ‘Der Termin steht im Vertrag‘ 06.01.1997, Die Welt: ‘Schröder zweifelt am pünktlichen Euro’ 13.03.1997, Die Welt: ‘Verschiebung wäre ein Ruckschlag’ 21.03.1997, Die Zeit: ‘Joscka Fischer: Warum ich für den Euro bin’ 04.04.1997, Die Welt: ‘Kohl verbreitet Optimismus’ 16.05.1997, Die Welt: ‘Sparpolitik gefährdet Währungsunion’ 10.06.1997, Die Welt: ‘Kohl und Rexrodt: -Euro-Diskussion schadet wirtschaft’


339

13.06.1997, Die Zeit: ‘Helmut Schmidt über die sechs Gründe, aus denen der Euro nicht scheitern arf – schon gar nicht an den Deutschen’ 13.06.1997, Die Zeit: ’Streit ind Ranküne in Bonn, Paris and Brüssel: Wird der Euro Verschoben?’ 28.06.1997, Die Welt: ‘Kohl versichert: Euro kommt pünktlich’ 28.06.1997, Die Welt: ’Eine Euro-Verschiebung mündet nicht im Chaos’ 02.07.1997, Handelsblatt: ‘Europa / Auch die Wissenschaft streitet über Sinn und Folgen einer Verschiebung. Der EWWU droht ein Tod auf Raten’ 11.07.1997, Die Welt: ’An Strukturreformen führt kein Weg vorbei’ 05.09.1997, F.A.Z.: ‘Kinkel: Der Euro wird pünktlich kommen’ 08.09.1997, Die Welt: ‘Offener Streit um den Euro’ 13.09.1997, Die Welt: ’Wird der Euro vertagt, ist er vorerst tot’ 01.10.1997, Handelsblatt: ‘Die eigentliche Gefahr liegt im späteren Scheitern des Euro’ 03.12.1997, Die Welt: ‘Der SPD geht es um einen Richtungswechsel’ 09.02.1998, F.A.Z.: ‘Der Euro kommt zu früh‘ 28.03.1998, F.A.Z.: ‘Währungsunion stabilitätspolitisch vertretbar‘ 29.04.1998, Die Zeit: ’Durch eine gemeinsame Waehrung eint Helmut Kohl die Europaeer, aber die Deutschen wenden sich von ihm ab. Chronik eines Triumphes im Angesicht der Niederlage‘


Index

accession, see enlargement accession partnership, Turkey 113–14 Aceh 68 acquis communautaire 49–50, 97, 114, 117, 150, 155, 189 acquis politique 49–50 Action Plan on Radicalisation and Recruitment xvi, xviii additionality 246 African Union, as international partner xiii, xiv Agenda 2000 8, 90 Amsterdam Treaty 10 democracy test 147 and High Representative 24 and social policy 189 and sustainable development 50 and Western European Union 23 anti-discrimination 50 association agreements 8, 67, 113, 117, 147 asylum and migration policy xvii–xviii Austria and domestic violence policies 185 GDP 282, 287, 308, 310 labour market restrictions 93 taxes 310–11 and Turkey 67 unemployment 282 and United Kingdom Presidency 67 viticulture 250–8 Austrian Presidency xiv, xxvi, 71–2 autarky 202–5 authoritarian regimes, collapse, see democratic transition; democratization aviation market 65 Balkans, see Western Balkans Balkans crisis and Common Foreign and Security Policy (CFSP) 9–10 Barcelona Process 9–10, 12, 82

Basic Principles for an EU Strategy Against Proliferation of Weapons of Mass Destruction 29–30 battlegroups, see EU battlegroups Belgium GDP 282, 287, 308, 310 labour market restrictions 93 taxes 310–11 unemployment 282, 310 Berlin-plus procedures 19–20, 25–8 Biological and Toxin Weapons Convention (BTWC) 79–80 biological weapons 76, see also weapons of mass destruction (WMD) Blair, Tony 15, 61–3, 68, 71, 102, 106 Bosnia 22–5, 27–9, 31, 33, 104–5 Brussels European Council 35, 112, 114 Budget xxx–xxxi, 70–2 Bulgaria, see also Eastern European states accession xix, 93 democratic transition 199–200 labour market restrictions 93–4 political system 165 taxes 311 Burgenland viticulture case study 248–58 CAP, see Common Agricultural Policy (CAP) Capabilities and Commitments Conference 31 case law 133–8 Central and Eastern European democracies, see Eastern European states CFSP, see Common Foreign and Security Policy (CFSP) Charter of Fundamental Rights 50 chemical weapons 76, see also weapons of mass destruction (WMD) Chirac, Jacques 91, 105, 112, 297 civilian power 42–4, 47–8 climate change and United Kingdom Presidency 68–9

342


co-centric circles, see two-speed Europe cohesion xxiii–xxiv, xxx, 130, 262 Cohesion Fund xxix, 247–8 Cold War and Common Foreign and Security Policy (CFSP) 3–4, 7, 9 Cologne European Council 25, 43–4 Combined Joint Task Force (CJTF) 22 Comecon 203–5 Committee for Civilian Aspects of Crisis Management (CIVCOM) 24–5 Common Agricultural Policy (CAP) xxix, 70–2, 250 Common Foreign and Security Policy (CFSP) xiii–xiv, 3–16, 24–5, 82 common positions, Common Foreign and Security Policy (CFSP) 8–9, 25 competitiveness and European Monetary Union (EMU) 280–95 Comprehensive Nuclear-Test-Ban Treaty Organization (CTBTO) 79–80 conclusions Burgenland viticulture 256–8 Common Foreign and Security Policy (CFSP) 16 conditionality 155–7 Court of First Instance 138 democratization 155–7 domestic violence policies 192–3 enlargement 106 Europe as civilian, normative or military power 55 European Court of Justice (ECJ) 138 European Monetary Union (EMU) 299–300 European Security and Defence Policy (ESDP) 37–8 flat tax 317–18 Germany and European Monetary Union (EMU) 336–7 political representation in Central and Eastern Europe 171–3 public opinion 239–40 socialization 155–7 Turkey 122–3 weapons of mass destruction (WMD) 84–5 conditionality 144–57 Consequence Management 28, 33, 36 Constitutional Convention 103, 122 Constitutional Treaty French and Dutch referenda xx,

xxiii–xxiv, 90 and Petersberg tasks 28 Solidarity Clause 16, 36 status report xxii and United Kingdom Presidency 62–3, 73 convergence xiii, xxiii–xxiv, 248, 263 criteria 292, 324, 330–4, 336 cooperation agreements and conditionality 147 Copenhagen criteria xix, 49–50, 90, 115–16, 148–50, 154 counterterrorism policy xviii, 25, 36, 66 countries of origin/transit, cooperation with xvii–xviii Court of First Instance 132, 137–8 criminal justice xvii–xviii, 29 Croatia xix, 67, 148, 311 CTBTO, see Comprehensive NuclearTest-Ban Treaty Organization (CTBTO) Cyprus xvii, 9, 27, 95, 308, 311 and Turkey 115–16, 120–1 Czech Republic, see also Eastern European states domestic violence 186–7 and European Monetary Union (EMU) 95 instability 90, 98, 100 and labour market restrictions 94 political system 165 wealth 267 and welfare state 267–8, 273 Czechoslovakia democratic transition 199–200, 202 and East Germany 204 Daphne Programme 180–1, 190 data retention xvi, 66 Dayton framework 104–5 decision-making process, need for reform xviii decoupling 26 delocalization 262, 265, 273 Democratic Republic of Congo 28–9 democratic transition, see also democratization democratic transition, East Germany 197–217 democratization xx–xxi, 143–57, see also democratic transition conclusions 155–7

Index domestic violence policies case study 177–93 Portugal 198 Spain 198–200 Denmark and Common Foreign and Security Policy (CFSP) 9 and European Monetary Union (EMU) 94 GDP 287, 308 and Schengen ‘space’ 96 taxes 310–11, 314 welfare state 266 determinacy and conditionality 152 Diez, T. 41–2, 45–7, 51–4 disenchantment 89–106 Doha Development Agenda 69–70 domestic violence policies 177–93 EAGGF, see European Agricultural Guidance and Guarantee Fund (EAGGF) EAR, see European Agency for Reconstruction (EAR) East Germany, democratic transition 197–217 Eastern European states, see also democratization bicameralism 164 and Common Foreign and Security Policy (CFSP) 9 and conditionality 147 domestic violence policies 177–93 electoral thresholds 169 electoral tiers 169–70 ethnic difference 167–9 and European Monetary Union (EMU) 94–6 and flat tax 308–12 human rights norms 177–93 judicial involvement in representation 170–1 labour market restrictions 92–4 labour markets 263–4 minority rights 167–9 national parliaments 101 parliamentarianism 164–6 peripheral position 262 political parties 163–4 political representation 161–73 political systems 164–70

343

presidential systems 164–6 productivity 266, 268 proportional representation 164–6 and Schengen ‘space’ 96–7 single member constituencies 165 socio-economic challenges 262–3 trade openness 267 unicameralism 164 and United Kingdom Presidency 92 ECAP, see European Capability Action Plan (ECAP) ECJ, see European Court of Justice (ECJ) economic conditionality, see conditionality economic development Ireland as success story 316–17 and tax reform 307–18 EDC, see European Defence Community (EDC) EGF, see European Gendarmerie Force (EGF) electoral thresholds, Eastern European states 169 electoral tiers, Eastern European states 169–70 Elysee Treaty 5 emissions trading xxvii energy xiv, xxvi–xxvii, 63 energy security and Common Foreign and Security Policy (CFSP) xiv–xv, xxvii enlargement xix–xx conclusions 106 conditionality, see conditionality Copenhagen criteria xix, xx, 148–50, 154 cross-party consensus 99–100 Eastern European states 113 and European Security and Defence Policy (ESDP) 27 and Finnish Presidency xix future 104–6 Greece 146–7 and instability 99–101 Macedonia (FYROM) xix Mediterranean 113 and national parliaments 101 new politics 89–106 Portugal 146–7 public support xx Spain 146–7 Turkey xix, 66–7, 105–6, 111–23

344


Western Balkans 104–5 ENP, see European Neighborhood Policy (ENP) environmental offences and European Court of Justice xvii EPC, see European Political Co-operation (EPC) ERDF, see European Regional Development Fund (ERDF) ESDI 20 ESDP, see European Security and Defence Policy (ESDP) ESF, see European Social Fund (ESF) Estonia, see also Eastern European states and European Monetary Union (EMU) 95 GDP 308 political system 166 public opinion 101 taxes 261, 308, 311 trade openness 267 EU battlegroups xv, 33–4 EU COPPS 29, 68 EU Military Committee (EUMC) 24, 26, 32 EU Military Staff (EUMS) 24, 31–2 EU-WMD Strategy, see Strategy against proliferation of weapons of mass destruction EUMC, see EU Military Committee (EUMC) EUMS, see EU Military Staff (EUMS) Euro-devaluation strategy 280 Euro-Mediterranean Partnership 9–10, 12 Eurobarometer 114, 223–5, 227, 233, 239 Eurojust xvi European Agency for Reconstruction (EAR) 105 European agenda for the future xxii European Agricultural Guidance and Guarantee Fund (EAGGF) 247 European Airlift Command 34 European Arrest Warrant xvi, xvii, 36 European Capability Action Plan (ECAP) 15, 20, 31–2 European Central Bank (ECB) 102, 280–91 European Court of Auditors xxxi European Court of Justice (ECJ) 129–38 European Defence Agency (EDA) xv, 32–3 European Defence Community (EDC) 5, 20–1 European Evidence Warrant xvi

European Foreign Minister 16 European Gendarmerie Force (EGF) 33 European identity and European Monetary Union (EMU) 327–8 European integration and domestic violence policies 181–92 European Monetary Union (EMU) xxviii, 279–300 and competitiveness 280–95 conclusions 299–300 conclusions on German entry 336–7 cost-benefit debate 328–30 and Eastern European states 94–6 élite preferences 323–4 European identity debate 327–8 future 295–9 and Germany 321–37 macroeconomic consequences 282–3 stability debate 330–4 European Neighborhood Policy (ENP) xxvii, 12 European Payment Order 66 European Political Co-operation (EPC) 6 European Regional Development Fund (ERDF) 246–8 European Security and Defence Identity (ESDI) and NATO 20–1 European Security and Defence Policy (ESDP) xiii–xv, 11, 19–38, 43–4, 82 European Security Strategy, see Security Strategy Document European Social Fund (ESF) 247 European Strategy for Sustainable Development xxv European Territorial Cooperation 248 Europol xvi, 36 exchange rate policy 280–91 External Action Service 16 Feira Council and Petersberg tasks 27–8 FIFG, see Financial Instrument for Fisheries Guidance (FIFG) financial control xxxi–xxxii Financial Instrument for Fisheries Guidance (FIFG) 247 Financial Perspective 2007-2013 xiv, xxviii–xxix, xxx–xxxi Financial Regulation xxxii financial resources xxviii–xxix, see also Budget

Index Financial Services Action Plan (FSAP) 65 Finnish Presidency xviii, xix, xxv, xxix first host country principle, Schengen ‘space’ 97 first pillar xvii, 4 flat tax xxviii, 261, 312–18 Fordism 262, 271 foreign policy, see Common Foreign and Security Policy (CFSP) Fouchet Plan 5 France, see also Constitutional Treaty, French and Dutch referenda and Artemis 28 and defence 42 GDP 282, 287, 308 and Germany 91, 128–9, 217, 280, 282 instability 89, 98 and integration 91 and Iran 68 and Iraq 15 labour market restrictions 93 and REACH 64 St.Malo Summit, see St.Malo Summit and Stability and Growth Pact (SGP) 295–300 taxes 300, 311, 313 and terrorism 14 and Turkey 105–6 unemployment 282 and United States 14 and weapons of mass destruction (WMD) 76 Franco-German axis 5 free movement of capital and European Court of Justice (ECJ) 133–5 free movement of goods and European Court of Justice (ECJ) 133–5 free movement of labour and European Court of Justice (ECJ) 134–5 French regulation school 262, 270–1 FRONTEX xvi FSAP, see Financial Services Action Plan (FSAP) fundamental economic freedoms and European Court of Justice (ECJ) 133–5 FYROM, see Macedonia (FYROM) G-8 Presidency 62, 68 GDP and European Monetary Union (EMU)

345

282, 286–7, 292, 308 and taxation 310, 312, 316–17 GDP per capita and public opinion 234–5, 237 GDR, see East Germany Georgia, Rule of Law Mission 29 German Presidency xxii, xxiii, xxvii German unification 217 Germany 97 and Budget 72 EU battlegroups xv and France 91, 128–9, 217, 280, 282 GDP 282, 287, 308 instability 98 and integration 91 and Iraq 14–15 labour market restrictions 93 and NATO 21 and Schengen ‘space’ 97 and Stability and Growth Pact (SGP) 280–2, 295–300 taxes 310–11, 313, 317 and Turkey 67, 106 unemployment 282, 308 and United States 14 Global Approach to Deployability 34 globalization and domestic violence policies 181–8 gradualism and weapons of mass destruction (WMD) 77 Greece accession 113, 246 enlargement 146–7 GDP 287, 308 labour market restrictions 93 taxes 311, 313 and Turkey 120–1 unemployment 314 Gross National Income (GNI), as contributions base xxix Hague Programme xvi, xvii, 36 Hallstein, Walter 131 Hampton Court xxii–xxiii, xxiii–xxiv, xxvi–xxvii, 63 Headline Goals xv, 31, 33–4, see also Helsinki Goals Helsinki Goals 15, 31 Honecker, Erich 200, 206–8 human rights norms 177–93, see also conditionality

346


Hungary, see also Eastern European states accession 94 and Comecon 204 democratic transition 199–200, 202 domestic violence 185–7 and East Germany 197, 206 and ethnic Magyars 168 and European Monetary Union (EMU) 95 GDP 308 instability 98–100 judicial involvement in representation 171 political system 165–6 taxes 311 trade openness 267 violence 89–90 welfare state 261, 264, 273 IIA, see Interinstitutional Agreement on Budgetary Discipline and Sound Financial Management (IIA) inequalities, post-enlargement 91–7 instability 97–104 Institute for Security Studies 24–5 institutional absorption 90 intergovernmental cooperation, weapons of mass destruction (WMD) 82–3 intergovernmentalism and supranationalism 91 Interinstitutional Agreement on Budgetary Discipline and Sound Financial Management (IIA) xxx, xxxi internal market xxv–xxvi International Atomic Energy Agency (IAEA) 79–80 Iran 14, 63, 67–8 Iraq 14–16, 29, 68, 91 Ireland 315–17 Cohesion Fund 247 and defence 20 GDP 282, 287, 308 labour market restrictions 93 and Schengen ‘space’ 96 taxes 311 unemployment 282 Islamic world, dialogue with xviii Italy domestic violence 185 and European Monetary Union (EMU) 282, 285, 291, 293

GDP 282, 287, 308 instability 98 and Iraq 15 labour market restrictions 93 taxes 310–11 unemployment 282 JHA, see Justice and Home Affairs Policy (JHA) joint actions 8–9, 25 judicial involvement in representation, Eastern European states 170–1 judicialization 127–38 Justice and Home Affairs Policy (JHA) xiii–xvii, 66, 97 Kosovo 25 Krenz, Egon 207, 209–10, 216 Kurdish question 119 labour market flexibility and European Monetary Union (EMU) 291–5 labour market restrictions, Eastern European states 92–4 Latvia and European Monetary Union (EMU) 95 GDP 308 taxes 261, 308, 311 trade openness 267 welfare state 273 legitimacy xx–xxi, 102–3 Lisbon Agenda xxiv, xxv, 64 Lisbon Strategy xxii, xxiv–xxv Lithuania domestic violence 190 and European Monetary Union (EMU) 95 GDP 308 political system 164 taxes 261, 308, 311 trade openness 267 welfare state 273 Luxembourg convergence criteria 332 GDP 308 labour market restrictions 93 taxes 311 Luxembourg Presidency 61, 65 Maastricht criteria 292–3

Index Maastricht Treaty Common Foreign and Security Policy (CFSP) 3, 6–10 and European defence identity 43 and European Monetary Union (EMU) 292, 321 and European Security and Defence Identity (ESDI) 21 Macedonia (FYROM) xix, 26–7, 29 Operation Allied Harmony 28 managed migration 93 Manners, I. 41–52 Mediterranean Region and Common Foreign and Security Policy (CFSP) 9–10 membership conditionality, see conditionality Middle Eastern peace process 6 migration policy and coherence between instruments xiv Military Committee, see EU Military Committee (EUMC) military power 43–4, 53–4 minority rights, Eastern European states 167–9 Modrow, Hans 207–8, 210–13 monetary policy 280–91 Montreal Conference 68–9 multi-year budget xxix multilateralism xiv, 35, 77, 79–81 national courts 133 National Reform Programmes xxiv NATO xiii–xiv, 4, 19–27, 31–2, 119 neo-corporatism 280 Netherlands, see also Constitutional Treaty, French and Dutch referenda EU battlegroups xv GDP 282, 287, 308 labour market restrictions 93 taxes 310–11 unemployment 282 Netherlands, instability 98 New Forum 207, 209, 213 new politics 89–106 Nice Summit 19–20 Nice Treaty xxiii, 25 nomenklatura privatization 209, 214–16 non-proliferation regime, see weapons of mass destruction (WMD) normative basis of European Union 48–53

347

normative power 44–8, 53–5 North Atlantic Treaty Organization, see NATO North Korea 14 NPT, see Treaty for the Non-proliferation of Nuclear Weapons (NPT) NSG, see Nuclear Suppliers Group (NSG) Nuclear Suppliers Group (NSG) 80 OPCW, see Organization for the Prohibition of Chemical Weapons (OPCW) Optimal Currency Area (OCA) theory 279 Organization for the Prohibition of Chemical Weapons (OPCW) 79 OSCE, as international partner xiv Own Resources system xxix, see also Budget Pact for Stability in Europe 9 Paris declaration 6 Partnership for Peace programme (PfP) 27 ‘Passenger Name Record’ agreement and European Court of Justice xvii path dependency 315–16, 318 Peace Implementation Council 104 Petersberg tasks 10, 20, 22 and 9/11 28 Democratic Republic of Congo 28 and Feira Council 27–8 fulfillment 27–31 and Iraq 28 and military power 43–4 PfP, see Partnership for Peace programme (PfP) PHARE programmes 105, 148 pillars, see first pillar; second pillar; third pillar Platform on European Security Interests 21 Pleven plan 5 Poland, see also Eastern European states democratic transition 199–200, 202, 206 domestic violence 185–7 and East Germany 208–9 and European Monetary Union (EMU) 95 GDP 308 instability 98–9 labour market restrictions 93 political system 165 public opinion 97

348


taxes 311 trade openness 267 unemployment 263–4 welfare state 273 Police Mission in Bosnia and Herzegovina 28 Political Committee, see Committee of Permanent Representatives (COREPER) political conditionality, see conditionality political instability, see instability political representation in Central and Eastern Europe 161–73 political will and Common Foreign and Security Policy (CFSP) 14–16 Portugal Cohesion Fund 247 democratic transition 198 enlargement 146–7 GDP 282, 287, 308 labour market restrictions 93 taxes 311, 313 unemployment 282 post-communist welfare state 261–73 post-enlargement Europe 89–106 Preliminary Draft Budget for 2007 xxx– xxxi presidencies case study 58–73 and foreign policy xv Proliferation Security Initiative 83 proliferation threats, see weapons of mass destruction (WMD) proportional representation, Eastern European states 164–6 proportionality xxi–xxii public opinion 223–40 rapid reaction force (RRF) 43–4 rational choice and social constructivism 324–6 REACH 64–5 refinancing 288–9 regional competitiveness and employment 248 regional development 243–58 regional dimension of public opinion 223–40 Romania, see also Eastern European states accession xix and autarky 204

and Comecon 204 democratic transition 199–200 domestic violence 185 ethnic Hungarian minority 168 labour market restrictions 93–4 political system 164–5, 168 taxes 311 Rome Treaty 6, 91, 129–30 Rule of Law Mission, Georgia 29 Russia xxvii and energy policy xxvii negotiations on visas and illegal residents 68 and weapons of mass destruction (WMD) 81–3 St.Malo Summit 11, 19–20, 26 Satellite Centre 24 Schengen Information System (SIS) 36 Schengen ‘space’ 96–7 Schuman Declaration 128–9 Schuman, Robert 128–9 second pillar 3–16 security policy xv–xviii Security Strategy Document xiii–xiv, 11–12, 19–20, 34–7 Serbia 67, 97, 105 services, internal market xxvi Seville European Council 11, 29 single audit model xxxi Single European Act 6, 50 SIS, see Schengen Information System (SIS) Situation Centre 83–4 Slovakia, see also Eastern European states domestic violence 182, 186–7, 191 and ethnic Magyars 169 and European Monetary Union (EMU) 95 GDP 308 political system 164–5, 168 R&D 266 taxes 261, 308, 311–12, 318 trade openness 267 unemployment 263–4 welfare state 264 Slovenia, see also Eastern European states domestic violence 186–7, 191–2 and European Monetary Union (EMU) 94–6 wealth 267–8 social constructivism and rational choice

Index 324–6 social policy 50, 132 and Amsterdam Treaty 189 and domestic violence policies 188–90 European Court of Justice (ECJ) 136–8 social solidarity 50 socialization xx–xxi, 143–55 Solana, Javier 10–11, 24 Solidarity Clause 16, 36 Soviet economic decline 202–5 Spain Cohesion Fund 247 democratization 198–200 GDP 282, 287, 308 and Iraq 15 labour market restrictions 93 public opinion 224, 239 taxes 310–11 unemployment 282 Spain, enlargement 146–7 Special Action Plan on Radicalisation and Recruitment xvi Special Envoy to the Middle East 6 Stability and Association Process xix Stability and Growth Pact 279–80, 292–8 Stabilization and Association Process 29 Strategy Against Proliferation of Weapons of Mass Destruction 29–30, 75–85 Structural Funds 121, 224, 246–8, 254 Structured Cooperation 25 subsidiarity principle 246 application xxi–xxii and domestic violence policies 188–9 sunk costs 315–16, 318 supranationalism and intergovernmentalism 91 sustainable development xxv, 50, 129 TACIS programmes and conditionality 148 Tampere Programme xvi tax harmonization xxviii tax reform 307–18 terrorism xvi, 11, 76, see also counterterrorism policy third pillar and first pillar xvii Third World poverty and United Kingdom Presidency 68–9 three-pillar structure 43, see also first pillar; second pillar; third pillar trade agreements and conditionality 147 Transatlantic relations, Common Foreign

349

and Security Policy (CFSP) 13–14 transition, see democratic transition; democratization transitional labour market restrictions 92–4 transparency and monetary policy 284–5, 289 Treaty for the Non-proliferation of Nuclear Weapons (NPT) 76 Treaty of Amsterdam, see Amsterdam Treaty Treaty of Maastricht, see Maastricht Treaty Treaty of Nice, see Nice Treaty Treaty of Rome, see Rome Treaty Treaty on the European Union, see Maastricht Treaty Turkey accession negotiations 112–18 accession partnership 113–14 and Berlin-plus procedures 25–6 challenges 118–22 civil society dialogue 117 Commission Recommendation 114 conclusions 122–3 and Copenhagen criteria 115–16 cultural differences 118 and Cyprus 115–16, 120–1 economic development 121 enlargement xix, 66, 105–6, 111–23 Europeanization 112, 119–20 Financial Framework 117 and Greece 120–1 Islam 111, 118–19 issues 118–22 Kurdish question 119 and NATO 119 Negotiating Framework 115–18 political dialogue 117 population 118 strategic location 119 Westernization 111–12 two-pillar monetary strategy 284, 287–90 two-speed Europe 89, see also inequalities, post-enlargement unemployment 263–4, 282, 291–5 unification, antecedents 127–9 United Kingdom budget rebate xxix, 70–2 GDP 287, 308 public opinion 226 St.Malo Summit, see St.Malo Summit

350


taxes 310–11 transitional labour market restrictions for Bulgaria and Romanis 93 and United States 14 and weapons of mass destruction (WMD) 76 United Kingdom Presidency 59–73 United States and European defence identity 20, 22, 26 and France 14 and Germany 14 and normative power 51–3 and United Kingdom 14 variable geometry, see two-speed Europe Venice Declaration 6

Ventotene Manifesto 128 visa regimes 97 viticulture 250–8 weapons of mass destruction (WMD) 28–30, 75–85 welfare state classifications 268–70 as insurance 265–6 post-communist, see post-communist welfare state Western Balkans xix, 29, 67, 104–5 Western European Union (WEU) 10, 20–3 Westphalian norms 44, 46, 48, 145 wine industry, see viticulture Working Time Directive 65–6 WTO and United Kingdom Presidency 69–70, 72

The State of European Integration

State Territoriality and European Integration (Europe and the Nation State)

The economics of European integration

The Economics of European Integration

State-building in Europe: The Revitalization of Western European Integration

Interlocking Dimensions of European Integration

Theorizing European Integration

European Financial Integration

Theorizing European Integration

Theorizing European Integration

The Politics of European Integration: A Reader

European Integration Theory

Transforming the European Nation-State

European Constitutionalism beyond the State

European Constitutionalism beyond the State

The European Parliament, the National Parliaments, and European Integration

University dynamics and European integration

European Integration of Rail Freight Transport

European Integration: Scope and Limits

European Integration and Supranational Governance

Regional integration: the West European experience

The Principle of Mutual Recognition in the European Integration Process

Beyond the Nation State: Parties in the Era of Integration

The Political Economy of European Employment: European Integration and the Transnationalization of the

The United States and the Nuclear Dimension of European Integration

The Stateless Market: The European Dilemma of Integration and Civilization

Community and Communication: The Role of Language in Nation State Building and European Integration

The European Patient Of The Future (State of Health)

The Origins and Development of the European Union 1945-2008: A History of European Integration

The Economics of European Integration: Limits And Prospects 2005

Political Economy of European Integration, The: Arguments and Analysis

The State of European Integration

State Territoriality and European Integration (Europe and the Nation State)

The economics of European integration

The Economics of European Integration

State-building in Europe: The Revitalization of Western European Integration

Interlocking Dimensions of European Integration

Theorizing European Integration

European Financial Integration

Theorizing European Integration

Theorizing European Integration

The Politics of European Integration: A Reader

European Integration Theory

Transforming the European Nation-State

European Constitutionalism beyond the State

European Constitutionalism beyond the State

The European Parliament, the National Parliaments, and European Integration

University dynamics and European integration

European Integration of Rail Freight Transport

European Integration: Scope and Limits

European Integration and Supranational Governance

Regional integration: the West European experience

The Principle of Mutual Recognition in the European Integration Process

Beyond the Nation State: Parties in the Era of Integration

The Political Economy of European Employment: European Integration and the Transnationalization of the

The United States and the Nuclear Dimension of European Integration

The Stateless Market: The European Dilemma of Integration and Civilization

Community and Communication: The Role of Language in Nation State Building and European Integration

The European Patient Of The Future (State of Health)

The Origins and Development of the European Union 1945-2008: A History of European Integration

The Economics of European Integration: Limits And Prospects 2005

Political Economy of European Integration, The: Arguments and Analysis

Recommend Documents