Tuesday, January 07, 2014

The Future of the EU

This is a little vault clearing on my part, as this is a paper I put together a few years back. On my recent trip to Europe, I discussed the future of the European Union with a number of folks throughout my travels. This paper helps explain some of the theoretical explanations used to describe past and future enlargements of the EU.

In 2004, the European Union experienced its fifth and largest enlargement in its history, allowing eight Eastern European countries that had previously been under Soviet influence into the organization. With the accession of Romania and Bulgaria three years later, the European Union experienced an incredible growth in the number of member states involved in the Union, bringing increased attention to the enlargement process from academics and theorists. Neofunctionalists (NF) argued that the scope of enlargement was due to “transcendental spillover of European integration” (Mariscal, 2004, p. 4), and that the process was in tune with the theory’s precepts. Liberal intergovernmentalists (LI) on the other hand, argued that the enlargement process reflected the “national interests and state power” of existing member states and the major actors responsible for domestic political decisions in leading states (Moravcsik, 2003, p. 43). To examine these competing theories of European integration, their principles will be applied to the 2004-2007 enlargement of the European Union, the economic benefits and as well as the potential future accession of Turkey into the union. While each approach claims to demonstrate an overarching theoretical explanation for EU enlargement that cross over into a number of different policy realms, I argue that while the economic benefits to major actors involved in each member state’s (MS) domestic politics verify LI precepts, the European Commission’s vital role in pushing the process forward and creating compromise between MS has been a necessary part of the enlargement process underemphasized by LI theorists.

The enlargement of the European Union to include seven new states can be seen to justify NF arguments, specifically in the role the EU played in the political process. At the heart of Neofunctionalist claims is that the “essence of integration lies in the fact that this is not the result of conscious choice” (Moravcsik, 2005 p.351) of the member states involved in the process. While enlargement was popular among Western Europeans on social grounds, it was unpopular economically (Eurobarometer, 2006, p. 40). Many Europeans in the West feared that increased enlargement and integration would increase the number of low skilled labourers in their nations, driving down wages (Ibid, p. 40). Because of this, the enlargement process was not approached with the same level of interest by member states throughout the process, forcing the EU Commission to play a leading role in directing the procedure, even though aspects of enlargement were unpopular with member states in 2004 (and continues to be so in the case of Turkey) (Macmillian, 2009, p.804).  

Neofunctionalism’s logic argues that increased power of the EU in the enlargement process comes from the Commission, in a process that developed incrementally over time known as Cultivated Spillover (Macmillian, 2009, p. 801). The Commission was able to play a strong mediating role between member states and accession states, building compromises and pushing the enlargement process forward when MS support had waned. Since member states would view the bargaining process as a zero sum game according to NF’s logic, the Commission played a significant and necessary role in “upgrading common interests” among the actors involved (Niemann, 1998, p. 431). Acting as a power broker, it was able to set the agenda of the 2004 enlargement process, and because it was a central force pushing for enlargement, as well as “its willingness to produce proposals, [it] become a significant player in the enlargement process” (Macmillian, 2009, p. 801). A separate aspect of NF is what is known as Political Spillover, which argues that collaboration and social-integration of elite technocrats at the supranational level have produced a “forward momentum of integration” that is fundamentally inevitable (Moravcsik, 2005, p.350). The collaborative process fostered by the EU brought about increased cooperation between states and actors within them, creating allegiances to the supranational actor that could mediate and press forward in ways national leaders were unable to do (O’Brennen, 1998, p.171). Due to the increased powers provided to the Commission through the integration process following the Paris Summit, its successful engagement with the European Community – Central and East European Countries (EC–CEEC) trade agreement (Niemann, 1998, p. 434), and the PHARE (Poland–Hungary: Aid for Restructuring of the Economies) programme to prepare CEE states for membership (O’Brennen, 1998, p. 172), the Commission was given more leverage by member states to act with authority. The PHARE program is an excellent example of spillover in the enlargement process. Originally intended as an aid program to Poland and Hungary, providing financial and technical support in helping both states makes the transition to a market economy (Niemann, 1998, p. 433), it was quickly extended in 1998 to included 13 countries. The expansion of the program was a result of the Copenhagen European Council, where Member States had agreed to allow Central and Eastern European states into the EU if they desired (Ibid, p. 435). The Commission recognized the functional pressure this goal would have on the EU and its member states (Ibid, p.436), and significantly increased the budget of PHARE as well as providing increased powers to the Commission (Ibid, p. 435).

Unanticipated threats from outside member states’ governmental control increased the necessity of the Commission and the European Union to participate in the enlargement process. As Philippe Schmitter argued, these unforeseen effects on existing member states by third party forces outside of their collective system, will force them to “adopt common policies vis-à-vis nonparticipant third parties. Members will be forced to hammer out a collective external position (and in the process are likely to rely increasingly on the new central institutions to do it)” (Schmitter, 1969, p. 165). Migration to member states from outside the Union represents an example of this, as the scope of the problem is larger than any single state can adequately address, which lead to an increase in cooperation through the EU’s Justice and Home Affairs (JHA) department (Boswell, 2003, p.619). While states will still develop policies that reflect their interests in the enlargement process, and look to maximize those benefits, they will be obliged to cede responsibility to the Commission when dealing with issues beyond their control (Niemann, 1998, p. 432).

Turkey’s potential acceptance into the EU also appears to verify NF’s focus on the role of the Commission in keeping Turkey’s bid moving forward, even while its accession into the organization is unpopular with most of the existing MS. Just as it pushed the 2004 enlargement and played a role as a broker between current members, it has worked to minimize conflict between governments which are troubled by Turkey potentially entering the organization. For example, the Commission pushed “member states to keep the accession negotiations going in spite of calls from leaders such as Merkel and Sarkozy against Turkey’s full membership and in favour of a less encompassing privileged partnership (Mcmillian, 2000, p. 803).” The Commission financed a further 199 projects intended to create dialogue between Turkey and the EU. All of these programs signify the strength the Commission has gained through a slow spillover process, and allows the organization to take a central political role in the enlargement process.

Liberal intergovernmentalism contends that member states are always aware of their decisions, how these decisions will affect them in the future, and that “bargaining and delegation by explicit governmental agreement better explains more important decisions in EU history” (Moravcsik, 1995, p.625). However, as O’Brennan argues, LI is “ill-equipped to account for the sheer density of issues and level of institutionalized cooperation (O’Brennan, 1998, p.169),” and is insufficient at explaining the political aspect and role the Commission has played in the enlargement of the European Union. The ability for the Commission to push forward the enlargement process even when it is unpopular with member states tells us that while states may work to guarantee economic advantage, state preferences change, and enlargement is “an ongoing process characterized by member state uncertainty” (O’Brennan, 1998, p. 169). That said, LI offers a compelling account as to why MS formulate their positions. Since states remain the defining players in LI, preferences of both the existing and applicant states, as well as the major actors at play in each state’s domestic politics, explain why states acted as they did in the accession process. Specifically, economic and commercial interests drove the enlargement process forward with the Central and Eastern European countries, and continue to do so in the case of Turkey (Ibid, p.168).  Member state governments are forced to act in the interests of strong constituents in their domestic politics, and in the case of enlargement, capitalist business interests and well-educated elites have the most to gain and are generally in favour of the process (Doyle and Fidrmuc, 2006, p. 522). These actors know what is in their best interests and “employ considerable resources to make sure their views get across to policymakers” (Loretzen, 2000, p.3). European Round Table of Industrialists (ERT), a club of some 40 multinationals concluded that the enlargement process was beneficial for business interests in both existing states and accession applicants (Ibid, p.3). Because the EU is predominantly an economic centered organization meant to deal with globalization, it “remains of preeminent importance due to its material benefits (Moravcsik to Chatzistavrou, 2008)” and beneficial for market interests active in the enlargement process.

The economic advantages to EU membership are noteworthy. Joining the EU will likely generate long-term total gains to new MS “ranging from 23 to 50 billion Euros” (Moravcsik and Vachudova, p.47). All regions that are 75% per capita GDP below the Community average qualify automatically to receive structural funds, even if other parts of their state are more prosperous (Delhey, 2001, p.211).  The 2004 enlargement created significant material benefits for the existing member states by increasing the internal market by over 100 million consumers in swiftly emerging economies (Moravcsik and Vachudova, 2003, p. 50). It is not surprising to liberal intergovernmentalists that the applicant states were willing to sacrifice more to obtain membership. Moravcsik describes this phenomenon as “asymmetrical interdependence,” as states will make concessions on some fronts without the necessity for strong coercive diplomacy because they recognize the overall benefits of these concessions” (Ibid, p. 45). The access to the collective European market, the ability for labour from the east to travel to the west, as well as the structural funds provided by the EU would provide significant economic advantages to the new states, and thus they are willing to sacrifice more in negotiations (Ibid, p. 48). Current member states also added a number of self-interested conditions to membership for the applicant states, such as lower subsidies than previous applicants, and “outlays from the EU budget to new members have been capped at 5 percent of their GDP, far lower than their predecessors.” (Ibid, p. 48) The existing members had less to gain from the addition of the new states, and therefore, were able to demand more from them in the negotiating process.

Moreover, surveys signify that the EU business community tends to support Turkish accession even when EU member states otherwise resist it (Taylor, 2008). By opening up a huge market, with a young demographic and a growing economy, business will be able to capitalize on these consumers by including them in the EU’s Economic Community. For Turkish business interests and producers, having increased foreign investment in a manner similar to the 2004 enlargement where Western businesses were responsible for helping upgrade the industry in the East (Bauer, 1998, p.13), Turkey can likely expect to see similar results. Due to the political power these actors have in the domestic politics of their nation states, it is not surprising that their concerns would be advanced by nation states.

Balance of power issues in European politics also dictate state policy preferences on enlargement. Britain has been supportive of Turkey’s accession “because it would hinder the process of political integration” (Muftuler-Bac, 2002, p.85) and draw power away from traditional power centers in Europe, such as France. Member States supportive of a more supranational EU fear Turkey’s accession will slow or halt that integration, and empower inter-governmentalists to remove decisions from the collective EU process (Ibid, p.85). Since the interdependence between Turkey and the EU is asymmetrical, and with bilateral interdependence more important to Turkey than it is EU member states, Turkey is willing to sacrifice more in the negotiating process to secure membership (Moravcsik to Chatzistavrou, 2008) (Muftuler-Bac, 2002, p.82).

While both NF and LI offer compelling accounts of enlargement of the European Union, both also fail to adequately explain all aspects of the process. NF provides reasons for why the Commission played a central role in the enlargement process, specifically in its ability to act as a power broker between various states due to the slow accumulation of power from past successful integration overseen by the organization, but oversimplifies the manner in which state actors develop their policies. LI explains how actors within each nation, largely from the commercial and business sectors, put long term goals over short term losses and have been responsible for the push towards expanding the EU’s access to untapped markets. At the core of Liberal intergovernmentalism lies the assumption that governments comprehend and weigh alternative strategies to meet their goals, and that they are not indifferent to them (Moravcsik, 1993, p.497). However, the power supplied to the Commission during the 2004 enlargement and possible future enlargement with Turkey, provides ample evidence that states do not always act to advance self interests above all other considerations. As Moravcsik points out, actors in the enlargement negotiations may sacrifice short term goals for long term objectives (Moravcsik, 2003, p. 43). While national governments may focus on long term aims, the Commission is able to spearhead the enlargement process, and direct it in ways that are not always expected by its MS (O’Brennan, 1998, p.169). As a result, both theories provide plausible explanations to the enlargement process in separate realms, with NF best explaining the political process and LI elucidating the economic leanings that fuel nation state preferences.

 



 

Sources

 

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