Feb 7, 2011

The Delivery Union: How the 27 Strengths of the EU Can Lead to Better Regulation

So far, European integration seems to have progressed according to a simple principle: if progress is to be achieved, governments should represent their interests less, rather than better or more imaginatively. Current developments show the limits of this approach, says Mirte van den Berge, and the EU must make use of tools such as Impact Assessments to reengage governments—its great source of strength.

“In times of crisis return to your strengths and develop them further” – these days, that could be a line to inspire the unemployed, recession-struck business sectors, or even our nearly bankrupt financial institutions. The addressee is in fact the European Union. The EU is faced with numerous crises – the banking crisis, economic crisis, Euro-crisis, legitimacy crisis. Confronted with such an array of problems, the EU should focus on its core strength: its ability to deliver benefits to European citizens, businesses and governments via EU law- and policy-making in its core policy areas, such as those related to the Single Market. This cannot happen without the active commitment of its 27 members.

But nowadays, member states are criticized for an increasingly narrow focus on their national interests not only in traditional bastions of intergovernmentalism, but also in the former Community policy areas. In some circles, this emphasis on the national interest is criticized as a block to the closer union of the 27 members needed if the EU is to respond to global challenges. Words such as ‘reactionary’ and ‘backward’ are being bandied about. Yet, such arguments about a mutual exclusivity between the national interest and the European one are lazy, and obscure attention from the wearisome task of bringing European integration into line with national realities. The challenge for the EU is to put an end to negative and obstructive nationalism by coming up with imaginative and sensitive means of making European action out of 27 national interests. In order to do so, the EU must encourage member governments to represent their interests not less but better.

The negative and defensive emphasis on national interests is in large part a consequence of states’ failure to judge the consequences of EU regulatory proposals. In every member state there have been examples of EU legislation becoming politicized after adoption – with national effects that were not foreseen by civil servants or national ministers during the negotiations, and that were overlooked by national parliaments. These failures, picked up as examples of ‘bizarre’ EU regulations in the national media, cause the current reflex of member states to take a negative and blocking attitude to their national interests during negotiations. If member states would simply provide better input and make better use of the instrument of Impact Assessments – currently viewed as a bureaucratic tool of the European Commission – to assess likely effects of new regulatory proposals at home, national governments would slowly gain confidence to bend the defensive focus on national interests.

The EU: Not an end in itself

In the level and scope of integration, and particularly in the voluntary commitment of its member states to the pooling of sovereignty, the EU is a unique entity. It is worth reminding ourselves of this because what makes the Union remarkable also makes it fragile: integration is not something that happens despite the member states but because of them. In order to ensure that the member states remain committed to this process and the EU itself, the Union needs to readjust its policy and law-making in order to produce rules that can be effectively implemented and are truly enforceable – policies that fit the national contexts they will have to function in.

It is, however, increasingly difficult for the enlarged EU to make policy and agree on legislation given the diversity of national lawmaking contexts and administrative cultures. The range of EU competences has also expanded rapidly. And the results of policy-making have been challenged on all levels thanks to the increasing globalization of markets and of policies. Many of the challenges the EU faces today are both horizontal, requiring coordination across different policy areas, and vertical, in the sense that they need to be addressed within a multilevel governance structure.

Particularly since the recent eastern EU enlargements, member states have been confronted with the negative effects of EU regulation in two distinct ways. On the one hand there are the EU policies that have had adverse national effects either because EU-level legislation itself did not match national realities or because the European Court of Justice has been called upon to interpret vaguely stated legislation and has altered the intended impact of the regulation. On the other hand, democratically elected national governments have increasingly experienced the restrictions the EU level poses on their national policy initiatives.

Better Regulation initiatives

The EU itself recognizes that some of its policies have had adverse effects and have not been correctly implemented or adequately been enforced by the member states. In recent years there has been increased awareness of the fact that regulation is not an end in itself and that there is often no such thing as 'one solution fits all'. Efforts from both the EU institutions and member states are therefore needed to ensure that EU rules negotiated in Council and EP are consistent with national realities.
Already in 2002 the Commission launched the Better Regulation programme to improve the quality of its law-making and to improve the regulatory environment for businesses, citizens and public administrations. The current programme has a threefold focus: 1) promoting better regulation tools at the EU level, notably simplification, reduction of administrative burdens and impact assessment; 2) working more closely with member states to ensure that better regulation principles are applied consistently throughout the EU by all regulators; and 3) reinforcing the constructive dialogue between stakeholders and all regulators at the EU and national levels.

The better regulation programme received a relatively robust political backing both from within the Commission and from the member states. Yet the programme strongly depends on the integration of this horizontal objective in all new initiatives and by all actors involved in EU policy-making. Recently the term 'smart regulation' was coined by Barroso II to signal the renewed commitment of Commission and broadened focus of the programme to the whole policy cycle.

Looking at the different tools and approaches within the better regulation framework, it is the impact assessment (IA) system that could contribute most to ensure that national interests and domestic implications fact-based consideration in the earliest stages of EU law- and policy-making. In general, all major policy initiatives of the Commission are subject to an impact assessment in order to assess the economic, environmental and social impact of new legislation or policy initiatives in the process of policy formulation. The assessment is made at the level of the Commission services responsible for the proposal, with input from other Directorates General involved, and the IA undergoes a quality check by a special Impact Assessment Board (IAB), currently under the Commission’s Secretariat General. Although the IAB has increasingly shown its independence and autonomy, some still argue the quality check should be done by an outside independent body, and others disregard the results of the IAs claiming that political concerns outweigh the proclaimed goal of evidence-based policy-making. Although the IAs are designed for internal use by the Commission, they also aim at facilitating the decision-making process in the Council and European Parliament, especially when the original Commission proposal is significantly altered in the decision-making stage.

Improving national input and use of impact assessments

While the system of impact assessments was introduced in 2002, it is still a work in progress. Besides the question of the functioning of the IA system within the Commission, its main obstacles are related to the lack of reliable data provided by member states and the lack of interest in the outcomes of impact assessments during decision-making between Council and Parliament. The member states, and thus the Council, perceive the impact assessments as a bureaucratic Commission procedure with little relevance for their decision-making process. A recent report of the European Court of Auditors shows the limited commitment of the Council and Parliament to themselves using IAs. This contradicts their inter-institutional agreement and political declarations.

This could however be changed if the Commission were able to base its assessments on more quantitative input from the member states. This would increase the relevance of the impact assessment and would enhance the extent to which IAs can be used for evidence-based policy-making. Further improvements would be made if the member states were more active in including the results of the IAs in the process of defining their national position and if the Council and EP would make use of the possibilities to assess the impacts of Commission proposals substantially altered during the decision-making process.

The success of the whole better regulation programme greatly depends on the Council, and thus the member states, streamlining Better Regulation in the law and policy-making process. A horizontal objective like better regulation illustrates that member states' internal coordination of EU policy-making needs to be stepped up. The national structures in place to deal with EU policy-making are too often founded on classic diplomatic structures developed for international organizations. In fact, the member governments are involved in multilevel governance. And given the range of policy areas dealt with on the EU level, the result is often domestic fragmentation and a struggle for coordination.

An improvement will require efforts in four distinct ways. First and foremost, better coordination and interaction between policy fields – an end, in other words, to the national fragmentation of EU policies. Secondly, better coordination between the national desks involved in the different parts of the EU and national policy cycle – a better networking within individual states of the national experts involved in EU agenda-setting, formulating the national position, negotiating in the Council, the national transposition and national implementation, enforcement and evaluation. Thirdly, involvement of national parliaments at an early stage to strengthen the smooth transfer of EU legislation into national law. In addition, the regional and local authorities often feel inadequately involved in the national input in the EU policy process – a remobilization of the subnational level is required.

The more coherent and better informed positions which would result from these extensive changes on the national level, would allow member states to inform EU policy-makers more accurately and adequately on the possible effects of future policies and policy options. This more quantitative and reliable data will improve the quality and accuracy of the Commission’s impact assessments. The enhanced input in the IA system would likely see a greater use of the impact assessments as well as more evidence-based policy-making in Council and EP decision-making, especially when major amendments to Commission proposals are made that were not foreseen in the original assessment. The EP has already committed itself to take more account of IAs. To operationalise this commitment, the EP could start by systematically acknowledging European and national implications for instance as part of the EP report on the relevant law-making dossier.

These ambitions might sound like a call for more bureaucratic decision-making, but this is not the case: it is just an added dimension that will better ensure that policies are able to deliver. Enhanced internal coordination from the member states, input in the data collection process of the IAs and a better use of the impact assessments during the decision-making process will ensure better fitting EU laws – the ultimate national interest.

It is however not only the EU member states that have to step up. Too often the perception in Brussels is that it is the member states and their assertion of national interests that stand in the way of a better EU – one that is smoothly functioning internally and has a more influential stance on the global stage. While these observations are often voiced by those with a vision of the common good for Europe, they disregard the fact that not the EU but the national level are the dominant players in the EU and will be for the foreseeable future. After all, this is where most of the EU budget is collected and spent, and where the vast majority of the EU’s policies are executed as well. Dismissing national interests as obstacles in the way of a better functioning Union ignores the crucial importance of both national support and a fit between EU and national policies for the success of the Union and its delivery of results. For an EU in crisis, a focus on its key results – the deliverables for EU citizens, businesses and public authorities – is the best way forward.

Mirte van den Berge is Executive Director of TEPSA, the Trans European Policy Studies Association, based in Brussels. Any opinions expressed in this paper are those of the author and do not necessarily represent the position of TEPSA.