W3: overview of EU policy making Flashcards
Extent of EU involvement in policy areas
Depends on the issue. Local issues, issues regarding national identity and sovereignty are usually up to member states
Ways in which the EU is involved in policy areas
Distributive policies
- Benefits a specific group in society
- Like common agricultural policy: financial support to farmers
- Subsidies for bridges, sport organisations. Just giving groups money
Redistributive policies
- Transfer money from some groups to other groups in society
- Like structural funds: regional, social and cohesion funds
Regulatory policies
- Sets general norms for certain types of activities
- EU is overwhelmingly concerned with regulation
- Specifically commission regulations, using delegating and implementing acts. When things get very technical -> commission decides.
- Parliament/council decides regulatory framework & political issues, commission does the technical stuffs
Where does the EU get its money from?
Most of EU budget comes from:
- Customs and agricultural duties levied on imports into the EU (Traditional Own Resources, TOR)
- Member state contributions based on the value added tax levied.
- Member state contributions based on their gross national income.
The EU lacks classical forms of revenue:
- The EU does not impose its own taxes. There is no EU income tax or EU value added tax.
- The EU does not borrow money. Member state governments can borrow money in order to cover budget deficits.
What the EU spends it money on
- Largest share: agricultural policy and structural funds (70% of spending)
- 167 billion euros, but relatively small compared to national budget. As percentage of the GDP very small: 1,25%.
The EU’s Common Agricultural Policy (CAP) was set up to provide farmers with a fixed income by guaranteeing minimum prices for their produce. As agricultural production in the EU soared, so did the amount of agricultural subsidies paid by the EU.
Structural funds are the financial part of the EU’s regional policy (also called cohesion policy).
Budgetary politics in the EU
- Although the EU budget is small compared to national government budgets, budgetary politics is among the most contentious issues in the EU.
- One reason for this is that the financial costs and benefits of the EU are much easier to quantify than the costs and benefits of regulatory policies or the increase in affluence and security that the EU offers.
Types of regulatory policies
Regulation aimed at market integration
- Negative integration: abolition of trade barriers: telling member states they cannot do: tarrifs, quotas etc.
- Positive integration: harmonization of member state laws. Telling member states what they have to do. Negative integration is never enough
Regulation aimed at mitigation the negative impacts of economic activity
- Environment, occupational health and safety
Regulation not (directly) related to economic activities
- Foreign policy, justice and home affairs
- The EU does not have its own army or policy but it has adopted an increasing number of regulatory measures aimed at coordinating the policies and activities of member states.
Negative integration:
- Abolition of trade barriers
- Key principle: mutual recognition principle.
- Is called negative because it stipulates what member state governments cannot do.
- Established by CJEU: Cassis de Dijon (1979).
- The central issue in negative integration is to distinguish member state measures that are meant to protect domestic producers by discouraging trade with other member states from member state measures that restrict trade but serve a legitimate purpose, such as protecting consumers.
Positive integration:
- Harmonization of member state laws
- For example: mutual recognition for medicines.
- EU legislation on the approval of new medicines is meant to prevent trade barriers between member states that would result from different national norms and standards, while at the time guaranteeing a sound assessment of the quality of medicines.
Regulatory output of the EU
Regulations make up by far the largest proportion of EU regulatory output, directives make up only a tiny proportion of EU regulatory output, still in a qualitative sense, directives are often seen as the most important type of EU legislation. Seems paradoxical, but:
- Most regulations are Commission Regulations, which specify more general provisions laid down in Directives and Regulations adopted by the Council. They are used for two reasons: because they contain very specific, technical provisions and/or because they need to be updated regularly.
- Regulations are used most often in two policy areas: agriculture and external trade. These are the areas in which large numbers of specific rules need to be adopted on things like minimum prices.
- Directives tend to contain broader and more generally applicable rules applying to classes of products, groups of people or issues.
- Like Commission Regulations, Decisions often specify provisions in more general EU legislation. The difference is that Decisions relate to specific cases (e.g. measures to combat African swine fever in Poland). Decisions are used for such things as approving mergers of firms etc.
- Recommendations are used in policy areas where the EU has little or no formal competence and/or where member state governments do not want to be bound by formal legislation.
Economic and monetary policy
Economic and fiscal policies (member states):
- Employment, wages, labour-market policies, reduction of inequality
- Taxation and government spending
- Competence
Member state competence, some coordination
Post 2008: stricter economic and budgetary supervision (all member states), European Stability Mechanism (Eurozone), ECB supervision of banks (Eurozone)
COVID-19: EU economic recovery and resilience funds
Favoured by southern states. But since 2008 stronger supervision
Monetary policy (EU level)
- Price-stability: the steps taken by a country’s central bank to control the money supply
- However: depends on economic and fiscal policies supporting price stability
- Competence
European Central Bank
Favoured by northern states.
Currency
- Common currency: euro. Common currency was on the Eu agenda in the 60s, plan for an Economic and Monetary Union (EMU)
Economist versus monetarist position
- Economist: first we need economic convergence, before we get a common currency
- Monetarist: adopting the euro will lead to economic convergence.
- Compromise: asymmetry in allocation of competences. Monetary policy is centralized, economic policy is up to member states
The future of economic governance in the EU
The financial crisis has created an unprecedented impetus for institutional reform. Yet, fundamental and thorough as these changes look on paper, their real impact will only become clear in the future. A number of important questions remain for the (near) future:
- How will economic supervision work in practice? The main economic policy decisions are still made at the member state level.
- Will financial sanctions prove to be an effective deterrent against non-compliance? Imposing financial sanctions remains a very unattractive option for the European Commission, since it entails a direct political confrontation with a member state.
- Will the EU acquire independent powers to levy taxes? The EP tried to put this on the agenda but member state governments firmly resisted this.
- Will financial markets be further regulated to prevent another crisis?
- The issue of bonds and NextGenEU
The EU has already for a long time played important roles vis-à-vis non-member countries in a number of ways:
- External trade: the EU forms a single trade bloc, with one integrated trade policy vis-à-vis third countries.
- Development aid: the EU has its own development assistance policy, alongside those of its member states.
- External regulatory issues: international relations and global politics are not just about classic international issues, such as international security and trade, but also about all kinds of regulatory issues, from human rights to environmental protection.
But regarding EU foreign policy, there are a lot of obstacles for integration:
- Goes to core of member state sovereignty
- Diverging member state preferences: priorities and preferences differ
- Diverging strategic cultures: traditions of armed intervention versus neutrality
- Diverging diplomatic status and military capacity
- NATO as a ‘rival’ with US backing
- Diverging internal political organization of foreign policy: some countries parliament has a larger say, in some they don’t
As a result, the development of EU foreign policy has remained a difficult and slow process.
The EU is described as a ‘soft power’
- Soft power: is the ability to wield influence, not through the use of force or money, but through the attractiveness and legitimacy of one’s values, cultures and policies.
- This is most visible in times of major international security crisis, when EU member states often have difficulties arriving at a common position, let alone agree on some form of intervention.
- In a well-known phrase, the EU is often described as ‘an economic giant and a political dwarf’.
- More positively, the EU has alternatively been described as a ‘civilian power’ a ‘soft power’ or a ‘normative power’.
Incremental development regarding EU foreign policy
- Civilian and military missions (training, military stabilization after peace treaty)
- EU battlegroups
- Mutual defence clause in Treaty
- European Defence Agency (2004)
- European External Action Service, High Representative for Foreign Affairs and Security Policy (2011)
- Border control, FRONTEX (2004); efforts stepped up after 2015 refugee crisis -> European Border and Coast Guard Agency
- EU sanctions
-> National sensitivities remain central in decision-making, member states retain their sovereignty
