![Sample our Politics & International Relations journals, sign in here to start your FREE access for 14 days]({"type":"image" , "src" : "/sda/5947/TOC-Subject-Sample-2021-Politics-International-Relations.jpg"})
Abstract
This article explores the politics behind the design of EU regulatory institutions. The EU has established an extensive ‘Eurocracy’ outside of the Commission hierarchy, including over 30 European agencies and a number of networks of national regulatory authorities (NRAs). The article examines the politics of institutional choice in the EU, explaining why EU policy-makers create agencies in some policy areas, while opting for looser regulatory networks in others. It shows that the design of EU regulatory institutions – ‘the Eurocracy’ – is driven not by functional imperatives but by political considerations related to distributional conflict and the influence of supranational actors.
Notes
1. Trying to estimate the number of regulatory networks is problematic at best and most likely futile. In practice it is very difficult to establish which bodies should be included in the category of ‘regulatory networks’ and estimates would vary wildly – from a handful to thousands – depending on what was included in the category. There are regulatory networks which have officially been constituted as networks which advise the Commission; there are other regulatory networks which have not been officially recognised but which the Commission has helped initiate; and, there are regulatory networks which act independently of the Commission. While the number of regulatory networks officially established in EU legislation is limited, almost all EU regulation ultimately spurs the formation of some sort of regulatory network, and more than one type of network may exist in the same sector.
2. For important exceptions see Coen and Doyle (Citation2000), Coen and Thatcher (Citation2008) and Levi-Faur (forthcoming).
3. These networks may be established by EU legislation, or they may be established from the bottom up by NRAs – sometimes in an effort to forestall the creation of some sort of centralised agency. Networks established informally by NRAs from the bottom up may later be facilitated by the Commission and be accorded a more formal role by EU legislation.
4. Bodies such as the Community Plant Variety Rights Office and the Office of Harmonization for the Internal Market were not included because they are not considered to be engaged in the exercise of substantial regulatory discretion at the Community level. Therefore, the Meroni doctrine has not been applied, and they are permitted to make binding legal decisions (Szapiro Citation2005). Likewise, agencies such as the Community Fisheries Control Agency that focus exclusively on monitoring and inspection and play no role in regulatory policy-making were excluded.
5. For important exceptions, see Shapiro (Citation1997), Kelemen (Citation2002), Dehousse (Citation2008) and Groenleer et al. (Citation2010).
6. Effectiveness being defined as ‘the capacity to produce (including to make other actors produce) collectively binding decisions on the supranational level’ (see Eberlein and Grande Citation2005: 156).
7. Agencies can be set up by secondary legislation but sui generis independent regulators like the ECB require a Treaty amendment. This is because of the ECJ's Meroni Doctrine (Case 9/56, Meroni v High Authority) which holds that Community law does not allow delegations of discretionary powers to bodies (i.e. independent European regulatory agencies) that were not created by the Treaty. The Commission's formal view on regulators is that, ‘Agencies cannot be granted decision-making power in areas in which they would have to arbitrate between conflicting public interests, exercise political discretion or carry out complex economic assignments’ (European Commission Citation2001: 24).
8. See Majone (Citation1996) on Commission as a competence maximiser.
9. Also, the Commission will be more likely to surrender ‘bureaucratic turf’ where doing so allows it to focus on its core competences of policy planning, initiation and enforcement (i.e. by delegating only routine technical regulatory responsibilities to outside bodies) (see Kelemen Citation2002).
10. On how conflict between principals influences delegation to and the discretion of agents, see Epstein and O'Halloran (Citation1999: 11, 129–33) and Franchino (Citation2007).
11. Member states probably underestimated the effects of giving the Commission implementing powers for competition law (Wilks and Bartle Citation2002). Subsequently, they did not give the Commission direct implementation powers in the regimes ostensibly designed to promote competition in utility sectors, nor did they give effective implementation powers to centralised European agencies in these fields over which the Commission could wield veto power (see the telecoms case study below).
12. Despite the fact that the Commission retains formal decision-making power, the establishment of an EU agency entails a real loss of authority for the Commission because the regulations establishing agencies usually require the Commission to take ‘utmost account’ of agency recommendations. This requirement can be enforced by the ECJ when it reviews Commission decisions (Shapiro Citation2001; see for instance case T-326/99 Nancy Fern Olivieri v Commission & EMEA, para. 55).
13. It is worth noting that the NRAs that participate in pan-European networks in many sectors – including for instance broadcasting, electricity, gas, posts, rail and telecoms – are far from being ‘independent’ agencies. Most are resourced directly by the government, staffed by national civil servants, led by appointees of the relevant government minister and are potentially subject to legislative override.
14. For example, France was the leading proponent of EU safety and interoperability rules for high speed rail while simultaneously voting against EU rules for access.
15. In the current discussion on financial services, member states are arguing that the binding powers of European Supervisory Authorities (ESAs) should not apply to micro-prudential issues in general as the Commission advocates but specifically only to credit agencies and to situations in which two national regulators on the supervisory college of a pan-European financial institution are in dispute over prudential rules and bring a complaint to an ESA.
16. For example, Cave and Crandall point out that the definition of cost orientation was so vague that it gave member states enormous scope to achieve different objectives (Cave and Crandall Citation2001; see European Parliament and Council 1997b: Art. 1.1).
17. Presidency of the European Community, Note for informal trialogue, 20 November 2001. Courtesy of Malcolm Harbour MEP.
18. In establishing the ERG, the Commission was effectively building on the existing Independent Regulators' Group (the IRG) established in 1997, which is the same body absent the Commission and which continues to exist in parallel to the ERG.
19. See for example, Independen (Citation2008: Annex on ‘Variation in EU access conditions’).
20. A questionnaire was sent to 25 telecoms NRAs in 2005. It included a request for the respondent to state whether they agreed or disagreed with the proposition ‘implementing ERG/IRG pibs and opinions is perceived by your institution as an obligation’. Responses were received from six. All disagreed with the proposition. One response from a senior national regulatory official with responsibility for managing coordination with the ERG included the comment: ‘If a recommendation/opinion/common position runs up against a domestic political imperative then its useless … There is no sanction, social or otherwise, for failure to comply with a recommendation/opinion.’ Questionnaire on Committees to Telecoms Regulators, Response of 25 July 2005, Questionnaire on file with authors.
21. The threshold adjusted from five member states in 1975 to two member states in 1987 in a further attempt to try and make the procedure relevant (Council of Ministers 1987).
22. The Council acquiesced to the Parliament's demand that European Parliament and stakeholder representatives be added to the agency's management board, though member state representatives still held a majority. Also, the Council agreed to the Parliament's demand that the nominee for the position of agency Executive Director appear before the Parliament prior to her or his formal approval by the Council.
