Enhanced Cooperation: the Ultimate Challenge of Managing Diversity in Europe

Diversity in the EU has always been a permanent factor accompanying the European integration process. With the recent enlargement and those in the pipeline this diversity will grow, bringing the ultimate challenge for the continuity and feasibility of the integration process: the management of this increasing variety. The mechanism of enhanced cooperation was established in the Amsterdam Treaty to provide a solution to this challenge. The following article sheds some light on the future utilisation of this mechanism and its consequences and repercussions for the European integration process.*This article was written while the author was a researcher in the Department of International Relations and European Studies, Central European University, Budapest. The paper expresses the personal opinions of the author.     

Challenges on the way to stage three of European Monetary Union

While the Maastricht Treaty envisages a single European Currency as part of the Economic and Monetary Union, it contains no detailed instructions as to the practical arrangements for its introduction. Despite prolonged discussions and negotiations at various levels, no consensus has so far been achieved on the optimum changeover procedure. This article deals with some of the major challenges in this context.     

The EU on the 50th Anniversary of the Treaty of Rome

March 25, 2007 marks the 50th anniversary of the Treaty of Rome, the signing of which is considered to be the birth of the European Union. On this occasion the following articles discuss past and present developments in a number of important European policy fields. *Member of the Panel of Experts of the Committee on Economic and Monetary Affairs of the European Parliament to which the article was first presented as a Briefing Paper for the Monetary Dialogue with the President of the European Central Bank in December 2006.     

The new frontier in state aid control

State aid is in principle prohibited in the European Union, with a few exceptions provided for in the Treaty. Recently, a judgement by the European Court of Justice has weakened that prohibition by narrowing the concept of state aid. Criticism of this judgement so far has been based solely on legal grounds. This paper carries out an economic assessment of the judgement and argues that it is based on faulty economic premises. The author proposes an alternative method for dealing with compensatory measures so as to close the loophole opened up by the judgement. The author is grateful to Jean-Paul Keppenne for comments on an earlier draft, to Kirtikumar Mehta for stimulating discussions on the issue of compensation and to Anne-Mieke den Teuling for research assistance. The author is solely responsible for the views expressed in this paper.     

Defending the Consumer's Right to a Clean Environment in the Face of Globalisation. The Case of Extraterritorial Environmental Protection Under European Community Law

The issue of extraterritorial eco-protection provides an excellent illustration of unresolved tensions deep-rooted within Community policy and law as regards protecting the environment and the consumer. On the one hand, the EC has predicated itself traditionally on the free market model of consumer welfare, which perceives social progress to be indissolubly linked with open markets characterised by free competitive forces, exemplified by the "single market" ideal. Extraterritorial protective measures represent a considerable challenge to this orthodoxy. They not only question the notion that frictionless interstate trade should be the ultimate trump card, but also dispute the notion that a private individual should only have influence or ownership over concerns about the environment directly related to that person's "home" or "domestic" territory, such as the state of nationality or residence.Extraterritorial measures imply a post-national vision of politics, a vision which the EC in its current form does not share. However, by virtue of the major changes made to the Treaty of Rome 1957 (EC Treaty) due to the Single European Act 1986 (SEA), the Treaty on European Union 1992 (TEU), and most recently the Treaty of Amsterdam 1997 (ToA), the EC has committed itself to incorporating a strong environmental protection dimension to its traditional core aims related to market integration. These new commitments lend support to ideas and policies enhancing the status of measures designed to prioritise ecological values, including potentially extraterritorial measures on environmental protection.     

EEC’s association policy

In Part IV of the Treaty of Rome, Articles 131–136, it is laid down that all overseas countries and territories which were or had been dependencles of EEC member countries should be associated with the Community in order to assist economic and social development of such countries and to bulld close economic relations between them and the European Community. The present article discusses the effects which this policy has had up to the present time.     

Brexit Poker — Wer hat die besseren Karten in den Austrittsverhandlungen?

The political, economic and legal situation of Great Britain vis-à-vis European Union in the aftermath of the membership referendum and awaiting the commencement of withdrawal negotiations is interesting. The authors summarise the legal controversy in the UK over the powers and procedures needed to be complied with in order to duly trigger the Brexit. They then sketch the legal framework as provided by the Treaty on European Union and the Treaty on the Functioning of the European Union to reconstruct the decision-making architecture under which parties to the upcoming negotiations will have to make their choices. After outlining the opportunity cost for Great Britain associated with leaving the Union, in particular those regarding the financial institutions and foreign direct investments, they conclude that decision-making architecture governing the upcoming withdrawal negotiations puts Brussels in pole position vis-à-vis London. It is likely that Britain will have to accept transfer payments to the EU similar to, if not higher than the net transfers that have been due so far. Some degree of the compliance with the acquis communautaire, at least with regard to the treaty’s fundamental freedoms (goods, workers, services, establishment and capital) will most likely also be expected from London, if it wants to benefit from access to the European market after the termination of its EU membership.     

Banking regulation in the European union: Some issues and concerns

Banking regulation and supervision in the EU today has to be conducted in accordance with the Single Market legislation promulgated by the European Commission. The creation of a European Single Market in financial services, which was provided for in the Treaty of Rome of 1957 and in the Single European Act of July 1987 which revised it, was originally planned for completion by the end of 1992, although the final pieces of the jigsaw were not in place until the beginning of 1996. This article explains what the European Single Market in financial services represents, the rationale for it, and the measures, including the use of legally binding Directives, adopted to deliver it on the banking front. It concludes with a discussion and analysis of some of the issues and concerns which implementation of the Single Market program for banking services has given rise to, with special emphasis being placed on the evolution of minimum capital standards for banks.     

Still in democratic deficit

The rejection of the Lisbon Treaty by the Irish electorate has given new vigour to the debate on the European Union’s widely perceived democratic deficit. Does the EU indeed have a serious democracy problem? What are the options open to the European political leadership and which of these should be acted upon?     

European Parliament elections in times of crisis

In May 2014, EU citizens will vote in the most important European Parliament elections to date. With the new powers allocated to it by the Lisbon Treaty, the new European Parliament will shape EU policies in many important areas and will elect the President of the Commission. However, public confi dence in the EU has fallen to historically low levels — to a great extent due to the fi nancial crisis and its aftermath — and the participation rate in European Parliament elections has dropped steadily since the fi rst call for a direct vote in 1979. This raises fundamental questions about its political and democratic legitimacy. This Forum examines the economic agendas of the main political parties vying for power and the potential outcome of the May elections, including the role that radical and anti-euro parties are likely to play in the campaign and in the next Parliament.     

The single market and EMS instability

The following analysis of the 1992/93 crisis of the European Monetary System finds that the unfolding of the single market dynamics will make European Monetary Union a difficult stage to achieve. Further monetary integration is only feasible if full employment and sustained growth are achieved in the EC. The Maastricht Treaty needs some add-ons if economic and monetary union is to succeed.     

EC Law, the Environment and Consumers: Addressing the Challenge of Incorporating an Environmental Dimension to Consumer Protection at Community Level

The principal objective of this paper is to stimulate debate about the current state of the relationship and tensions between consumer and environmental protection policies at Community level. By virtue of the constitutional changes to Community Law introduced by the Single European Act 1986 (SEA) and the Treaty on European Union 1992 (TEU), the European Community (EC) has committed itself to re-evaluating its core, fundamental aim of attaining completion of market integration. The EC is now compelled to address whether the development of open and free market conditions ultimately serves the best interests and priorities of its inhabitants and whether its original goals adequately internalise their environmental concerns and demands. This paper aims to assess critically to what extent EC policy and law have responded to these new challenges and requirements by focusing, firstly, on the caselaw of the European Court of Justice and, secondly, on policy innovations introduced by and constraints facing the EC legislative institutions. Ten years on from the SEA, it appears that the Community has barely started to confront the issue of the consumer-environment interrelationship, with the result that political and legal developments have been unclear and often contradictory. The Community must begin to match its rhetoric with definitive action.     

Competition policy in the EEC

Article 2 of the Treaty of Rome describes the task of the European Community as to encourage stability and growth “by establishing a Common Market and by progressively approximating the economic policies of Member States”.     

Aiding Car Producers in the EU: Money in Search of a Strategy

This article investigates how the general principles of the Treaty have been applied to the car sector in the EU, where the soft law provisions are of particular interest. A detailed quantitative analysis from 1990 to 2008 highlights a reduction of aid over time. A shift from sectoral to “regional development” motives in granting aid to the sector is also observed in the last 10 years. However, sector specific aid is now less explicit but it remains important. Large amounts of public money are spent without a consistent strategy, reducing capacity in some cases, expanding it in others. The scarcity of public funds calls for a more focussed European policy for this industry.     

The Multiannual Financial Framework and European Defence

For the first time, security and defence will be a separate heading in the next MFF even though Article 41.2 of the Treaty on European Union (TEU) prohibits the use of the EU budget for defence reasons.     

A Social and Economic Model for Europe

The problems that social and labour market institutions are facing today are often attributed to globalisation and ageing. This article argues that globalisation merely exposes inherent weaknesses in social institutions while ageing aggravates them, but that neither of the two phenomena is the fundamental cause of the challenges. Moreover, there is no inherent trade-off between social and economic policies, but to reconcile the policies comprehensive modernisation is needed. Each country can face the challenges should they wish to do so and converging to a single social model is neither needed nor wanted. Finally, European (economic) and national (social) policies become increasingly intertwined and this calls for a new role for Europe. * Bureau of European Policy Advisers, European Commission. The authors would like to thank Tassos Belessiotis for his valuable comments. The authors would also like to thank their colleagues Declan Costello, Georg Fischer, Agnes Hubert, Frédéric Lerais, Mattias Levin, Roger Liddle and Jér?me Vignon. In addition valuable comments by Lans Bovenberg, Gosta Esping-Andersen, Ruud de Mooij, Frederick van der Ploeg and Fritz Scharpf were appreciated. The views expressed in this article are the views of the authors and do not bind the European Commission.     

EU Treaty Revision and Consumer Protection

In its original version, this paper was delivered by the authors to the Bureau Europeen des Unions des Consommateurs in April 2004 in order to provide the basis for that bodys submissions to the intergovernmental conference then charged with the task agreeing a new constitutional Treaty for the European Union. The aim: to improve the attention paid to the consumer interest in the Treaty. Ultimately the text agreed by the Heads of State and government of the Member States of the EU in June 2004 largely adopted the existing consumer-related acquis communautaire – in fact in most areas of substantive EU policy-making, not merely consumer policy, textual continuity is the hallmark of the newly agreed text. This paper has been revised to provide a commentary on the consumer-related provisions that were agreed in June 2004, in order both to show chances that have been missed (but may be revived should the ratification process founder) and to reveal areas of current debate that remain topical and controversial because of the preference simply to absorb existing provisions, lightly amended or left wholly unamended, into the constitutional Treaty agreed by the Heads of State and government of the Member States of the EU in June 2004.     

Satellite Lore

Ultimately, any decisions on controls for the new broadcasting technologies of tomorrow, and in particular for satellite broadcasting, will be politically inspired. This paper points out, however, that the opportunities for unilateral regulations by any of the 10 EEC Member States are, at least in theory, subject to those countries' obligations under the Treaty of Rome. The paper considers the case law already available from the European Court of Justice, the guardian of the Treaty of Rome's provisions, in the three main areas of concern for satellite broadcasting: copyright, advertising controls and public morality. From the evidence available the authors draw some personal conclusions and make some suggestions as to how the issues might be resolved.     

Europe – Quo Vadis? Reflections on the Future Institutional Framework of the European Union

With twelve new members the decision making in the European Union via intergovernmental cooperation will become ineffective. The EU is at the Cross Roads. In order to avoid a Stagno‐Europe the EU has a choice: Either it looks for the very essentials in the common institutional framework and adjusts it accordingly or the member states agree in ceding national sovereignty to the European level. This, however, requires that the democratic deficit at the EU level is reduced. The Treaty of Nice has failed to solve these issues. The paper elaborates in detail the non‐essentials and the essentials of European integration and discusses the basics of an approach to a constitution‐like arrangement for Europe.     

Ein fiskalpolitischer Pakt als Brücke in die Stabilit?tsunion?

For more than two years, the global financial and economic crisis has put the European Union to one of its hardest tests. Until now, no end is foreseeable. In 2011, the Union initiated the implementation of the reform package ?Economic Governance”. A deepening of budgetary integration was carried out in March 2012 with the signing of the ?Treaty on Stability, Coordination and Governance in the Economic and Monetary Union”, the so-called fiscal compact. This contribution deals with the scope of the budgetary regulatory capacity of the new instruments and analyses their interaction.