The Role of Integration Theories in European Union Law

Background

The European Union has a number of key values, which are commonly known – maintain peace, promote economic cooperation, sustain democracy and the rule of law, to name a few – most of which can be found in Art. 2 of the Treaty on European Union (TEU).

However, there is little to no discussion concerning the fundamental, general integration theories that the EU (and the organs predating it) assimilated. This is a mistake since the theories reflect the totality of Union’s laws, objectives and policies. After all, their purpose is to provide an explanation for the general behaviour of the Member States in the EU.

Up to date, the common solution to issues was to revise elements individually – amend laws, change policy or reconsider objectives. In other words, we might be treating the illness but not preventing it in the first place. So what if the source of the problem lies not in these elements, but in the general idea states have about integrating within the EU?

Revising the integration theory might hence point at the exact source of EU’s problems – this was done in past already and it may be time to do so once again. It is a worthy argument to bear in mind, especially since it is politically agreed that the EU needs urgent reform to maintain support (Tyrie, 2015).

As a result, this paper will analyse why it might be a good idea to revise the integration theories. Since the influences of the integration theories can be clearly seen in the Union’s Treaties, the focus will be put on EU Law. This analysis will not however provide a straightforward solution to the problem. Revision of the integration theories would require unanimous consent of all Member States and hence its outcome goes well beyond predictability at this early stage.

Neofunctionalism

Early integration theory was known as Neofunctionalism, where the actions of the state were “the outcome of a process in which political decision-makers were influenced by various pressures” (George, 1996, p. 36). In other words, the Union’s actions were seen as a result of these various political pressures, that in practice seldom resulted in the necessary cooperation between Member States and other political groups; the strongest pressure simply prevailed.

A central idea was the so-called ‘spillover’ effect, which stated that integration in one area would result in the need for more integration elsewhere. For instance, removing formal tariff barriers would generate a need to deal with non-tariff barriers which also hinder the efficiency of the Single Market (Craig and De Burca, 2011, p. 24).

Although this integration theory partially explained early behaviour of the EU, it also failed in two ways. First, it failed empirically by not recognising the different economic developments of different Member States. Being ‘different’ was not supported since only the strongest pressure was eventually recognised and acted upon. This left the smaller, yet more successful states, such as Luxembourg, unrecognized, which has undergone significant economic developments during the Neofunctionalist period (ibid.). Second, since compromise was not attempted nor even considered to be an option, the theoretical challenge was simply the political reality of the time (both national and international) which were not reflected by the Neofunctionalist approach (ibid., pp. 14-15).

Liberal Intergovernmentalism

The second theory of Union’s integration, and the one currently predominant, is Liberal Intergovernmentalism, which is comprised of three elements: “the rational state behaviour, a liberal theory of natural preference formation, and an Intergovernmentalist analysis of interstate negotiation” (Moravcsik, 1993, p. 480). Simply speaking, the actions taken by the Union are assumed to be to the largest extent possible: (1) rational (2) liberal (3) made in collaboration with Member States. Such a theory hence originated from the need for a high level of cooperation between states at an international level. The EU is a perfect institution through which the cooperation can be implemented due to its efficiency in dealing with issues addressing multiple states. For instance, the EU offers accessible trade agreements which would otherwise be expensive and time-consuming for the states to conclude alone (Keohane, 1984). International agreements are easier and more fluent when conducted via an interstate organisation.

The theory of integration accordingly reflected this need.

Liberal Intergovernmentalism and EU Law

Liberal Intergovernmentalism has had a profound impact on the shape and position of the current EU Law. In the case of European Parliament v Commission, the ECJ held that the European primary regulations and directives must embody the ‘essential elements’ but are to be interpreted loosely hence allowing broad interpretation of secondary legislation (Case C-156/93, 1995). As a result, the European Parliament’s power was reduced in favour of the Commission and the Council.

An answer to why such a decision was made can be traced back to Liberal Intergovernmentalism. According to its assumptions, more freedom should be given to the governments of Member States as to the extent of integration with the Union, under its third requirement (the “collaboration between Member States” element). An inadequately strong primary legislation may act contrary to this assumption and the will of the Member States.

As a result, in order for integration to work at all, secondary legislation was appropriately strengthened. Such an analysis points at another issue: The contemporary influence of EU law on domestic laws is often accused of being too significant. As a counter-argument, it can be noted that the supremacy of EU law over domestic law was already reduced by the states shifting their approach from a Neofunctionalist to Liberal Intergovernmentalist.

If the states believe that EU Law should be rendered even less supreme the only option would require both primary and secondary legislation to be weakened. If this was made, the purpose of the Union would come under question since effective “integration” as such would come to an end along with the fading competences of the Union. EU Law is hence likely at its weakest state which still allows for European integration but respects the differences between Member States. This is echoed in the institutional balance of power within the EU. The Commission is, after all, the sole initiator of legislative action, which are then voted upon by the European Council and the Council of the European Union.

Therefore, the only room for revision in this area, without significant changes of the policy, would be to redefine the meaning of “integration”. This task would most likely fall onto the Commission and, inevitably, the Courts.

The balance of competences within the Union has also another purpose; it fosters cooperation and dialogue between the separate organs of the EU, what was reflected in the TEU. For instance, the EP and Council are said to exercise legislative and budgetary functions jointly (Treaty on European Union, 2017, art. 14(1) and 16(1)). This in turn makes EU Law more democratically accountable, with the EP representing the electorate’s interest and the Commission representing state interest (Craig and De Burca, 2011, p. 74). Such a state of affairs is legally addressed by the principles of proportionality and subsidiarity, which do not allow the EU to make decisions on matters it is not concerned with or adapt measures which are inadequate to the issue. These principles were introduced in Art. 5 of the TEU and were as such heavily influenced by the predominant Liberal Intergovernmentalism.

Criticism

There is, however, a fundamental problem with the uncritical use of the discussed theory of integration. Liberal Intergovernmentalism primarily answers the questions of competences and power at the highest levels – it reflects the relationship between various EU organs and Member States – and is hence highly focused on the legislative side of the EU. In practice, the concept works primarily in “treaty-amending” decisions and can hardly be applied to everyday decision-making. As a consequence, Liberal Intergovernmentalism may cover only a part of EU’s activities. It is almost nonexistent in informal circumstances leaving a vacuum of any type of guidelines in those areas.

The EU’s solution to this issue is a “semi-autonomous legal power”, which applies to areas such as central banking, supranational adjudication or competition policy (Moravcsik, 2011, p. 73). This may give rise to a variety of problems such as conflicts of competences and authority, accountability, consistency etc. Such decentralisation of lawmaking could be a source of the recent accusations against the EU concerning the scope of its laws. Potentially, however, this issue can be addressed by appropriate legislation which would redefine the relationship between primary and secondary laws. Nonetheless, such a process is entirely in the hands of the Commission and would most likely involve redrawing the scope of power of particular EU organs.

Furthermore, the consequences of Liberal Intergovernmentalism can be seen in the adapted EU policies – in particular, their increasing “Europeanisation”. The EU adapts around 500 policy decisions per year. 80% of them are made at the European level (Börzel and Risse 2000, p. 3). This influences the vertical effect of EU Law and might be viewed as going against the doctrine of subsidiarity, which asks whether the measure should be taken at the EU level or at the national level. The assumption taken was that “the national authorities are thought better placed than an international court to evaluate local needs and conditions” (Frette v France (26/02/2002)). In other words, the presumption was that the measure would be better adapted at the national level. With Europeanisation, this seems no longer to be the case – the balance which subsidiarity attempts to maintain is swayed. This may lead to convergence of policy between the national and supranational levels (ibid.) but may equally result in divergence because of the EU paying less attention to the national policies.

Conclusion

Liberal Intergovernmentalism works where it is most needed – at the highest levels of EU’s power. It does, however, leave blank spots as we move down the hierarchy. A solution to the problem could be recognising the limits of the integration theory and implementing new agendas to fill in the policy vacuums. This primarily means redrawing the balance between primary and secondary legislation and could involve introducing amendments to the Treaties. Such attempts could, however, be viewed as steps into the opposite direction, thus rendering the Union less democratic in the eyes of various Member States. It would also amend (or effectively replace) various policies fundamental for the EU and as a result it seems that Liberal Intergovernmentalism itself can hardly be changed. It appears to be an optimal solution to the issues of European integration, which Neofunctionalism failed to address. Integration theories for organs as big as the EU may be hard to change swiftly and the EU needs relatively swift reform to efficiently respond to current internal and external challenges. For now, the price that is paid is the electorate’s support, which already had a material consequence in the form of Brexit.

Legally speaking, the policy seems to work by building a compromise between the supremacy of EU Law and the requirements of democracy. Furthermore, the ECJ does suggest that it is the leading basis for interpreting and understanding EU Law. The theory also solved the internal power disputes within the Union’s most critical bodies and was most likely one of the reasons behind EU’s success in the last two decades. On the other hand, the theory seems to favour the concentration of power and competences by the Union, resulting in Europeanisation. This goes against the principle of subsidiarity.

There is also some good news. The EU has undergone significant widening in the last two decades, with numerous new Member States joining the Union. It seems that such policy of widening will be stopped, with the Union opting for a policy of deepening the integration instead. This was recently announced by President Macron and Chancellor Merkel (Wagstyl, 2017). If such appropriate reforms take place, Liberal Intergovernmentalism may be put back in the territory in which it was originally designated to be. The current issues may after all stem from the simple fact that the integration theory did not suggest widening the Union but rather its deepening.  This may explain why some states are turning their back on the EU (e.g. the UK, Poland, Hungary) – the Union simply departed from fulfilling their wishes. Alternatively, the recent announcements may suggest that some states indeed will take measures to change their position within the Union. If this becomes a common phenomenon, the integration theory might be redrawn altogether. Regardless of the future outcome, one observation must be made. The integration theory might be a source of Unions successes and failures. After all, the Union needed some mechanism through which it can efficiently generalise and articulate the wishes of the Member States. But of course, a single theory can only be an attempt at formulating the wishes of the states. As it was presented, there is evidence pointing that it might be correct and incorrect. A solution might be either a full revision or a subtle adjustment. The final decision rests entirely with the Member States.

Aleksander Kalisz is  a Polish national studying Law at the University of Nottingham in England. His interests lie in European, International and Commercial Law as well as advocacy. He is the former President and the current General Secretary of the University Polish Society and a Vice President of the University TEDx Society. He is an eager participant of Model United Nations conferences, court mooting competitions and networking events. His passion is writing – he is a journalist for The Advocate, a University of Nottingham law school magazine, and a legal analyst for FOR, one of the largest Polish liberal think tanks.

References

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