Academic journal article German Policy Studies

European Governance by the Emergence of a New Type of Package Deals

Academic journal article German Policy Studies

European Governance by the Emergence of a New Type of Package Deals

Article excerpt

Abstract

European integration is a fluent process which couples decision-making to power distribution between the political institutions. In this system it is of prime concern for the European Commission to find partners in order to accelerate European integration. Under these circumstances European integration provides grounds for a new type of governance. The article claims that within the institutional setting of the EU package deals which involve different policy domains are increasingly likely to occur between private (firms) and a specific type of public actors (European Commission). In two sample business sectors - biotechnology and electrical energy - the emergence of package deals between the Commission and large firms involving different policy domains can be described as an analogous form of governance in spite of conspicuous sectoral differences. The following expositions will show that package deals may have positive effects on the progress of European policies. Nonetheless, we will evaluate the welfare effects of package deals between the European Commission and large firms on the European level. Finally we suppose institutional reforms to keep package deal's risks within limits.

Introduction

Over the last decades, the dimension for policy-making in the European Community (EC) has immensely increased. The fact that the European Union yields legally binding decisions for member states and especially their industry sectors is no news. But the phenomenon that the European Commission is able to successfully regulate national industries, although there is no legal basis for any regulation in the respective policy fields, calls for further attention. Indeed, there exist many studies which deal with the reasons for the renunciation of strong legal powers by the Commission and which explain the relevance of weak forms of vertical governance for the EC's success in "governing without government". Yet, weak forms of vertical governance, such as co-operative or bargaining strategies between European institutions and member states, do not fully explain how the Commission manages to enforce basic changes of national policy-making in the face of strong resistance of member states and national interest groups and without any regulatory competencies. In our study we claim that the institutional setting of the European integration provides grounds for the emergence of a new type of package deals, i.e. package deals between the European Commission and large firms on European level. This type of package deals allows well known weak vertical governance to coincide with "hard" horizontal bargaining processes and also allows the Commission to invalidate the opposition of member states or interest groups.

The following expositions will show that, above all, two given facts of the institutional setting of the EC contribute to a probability of package deals: a low level of public control and a high degree of fragmentation in decision-making processes. Both give large companies room for political access. However, the emergence of package deals on European level essentially depends on the resources the partners can trade. The empirical examples of biotechnology and electrical energy we have chosen make clear that on both sides, on the side of the Commission and on the side of large firms, there are resources that are of interest to the respective trading partner. It will be shown that there are principal goals on both sides initiating the will to pursue particular interests through package deals. The examples also demonstrate that despite conspicuous differences in the biotechnology and energy sector, both sectors give reason to assume that package deals between public and private actors will increasingly emerge on the European level.

The Institutional Setting of the EU as a Structural Opportunity for Package Deals

The fast and uncertain process of institutional change within the European Union has the effect on political and economic actors that they have to endeavor to gain influence on policy outcomes and engage in the formation of new institutions at the same time. …

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