Social and Taxation Policies — Domaine Réservé Fields? Member States Non‐compliance with Sensitive European Secondary Law

Abstract

Social and taxation policies are sensitive fields in which states often have sovereignty concerns. Accordingly, member states hesitate to transfer such competencies to the European Union (EU). Nevertheless, the EU shaped sensitive policies. Do states violate these domaine réservé fields more often than less sensitive European laws? Are those cases more difficult to settle? This paper shows that employment and taxation policies are indeed more frequently violated and that these infringement cases are harder to resolve. Yet, this is not due to sovereignty concerns, as expected by the domaine réservé thesis. Rather, the extent of non‐compliance costs, the strength of domestic pro‐ and contra‐compliance constituencies and the fit to governmental programmes are crucial for dynamics of norm violations and settlements. These variables do not systematically vary over policy fields and, in the end, states comply even with inconvenient European laws.

Key Words:

• Compliance
• member states
• social policy
• taxation policy

Notes

1. These cases are Greece (C‐1997/387), Spain (C‐278/01) and France (C‐304/02).

2. See Eurlex database, http://eur-lex.europa.eu/ (accessed 27 August, 2007).

3. Cf. Eurobarometer surveys, http://ec.europa.eu/public_opinion/archives/eb/eb66/eb66_en.htm (accessed 24 June, 2007).

4. They are not automatically linked to threats of sanctions and they do not set free logics of appropriateness. In the first case we would expect that especially weak states fear penalties and consequently comply with all ECJ rulings (Fearon 1998). In the second case, states attributing legitimacy to the ECJ should always comply with judgments (Franck 1990). However, both propositions do not hold. The Annual Reports show that there is significant intra‐state variation concerning compliance dynamics.

5. Shaming strategies facilitate quick adaptations. First, societal actors have to create reputation threats immediately after ECJ judgments, since their bargaining power decreases once public attention created by the judgment declines. Secondly, governments cannot afford to react slowly if they want to avoid reputational damage and electoral ex‐post sanctions.

6. Argumentative processes take more time because they foster ideational change in three incremental steps: re‐labelling an issue, making the new concept well known and linking it to another complementary frame. Only then are governments likely to adopt the new frame and pursue legal changes.

7. ‘We have an obligation under the European Communities equal treatment directive to remove any legislation that is contrary to the principle of equal treatment of the sexes and we fully accept that obligation’ (Secretary of State for Employment, in House of Commons 1989, 857).

8. Substantively, the draft and final version of the 1986 SDA were almost identical (Fritzpatrick 1987). Labour Party proposals were not included (e.g. a stronger enforcement system (House of Commons 1986b, 619), inclusion of private households (House of Commons 1986b, 538)).

9. The Minister also stated ‘We have no wish to bring the law governing public employment relationships into people’s private living arrangements … we still question whether it is really appropriate to seek the objective of equal treatment by applying to all small firms a law designed to meet the circumstances of larger employers’ (House of Commons 1986b, 570–1).

10. Prior to the judgment, norm proponents, such as the social‐democratic women consortium, were hardly interested in legal changes, which is not in the least due to the perceived gap between legal rules and their effectiveness (Gehrhard 2004, 309).

11. In the plenary debate on the equal treatment law, members of all political parties argued within the new frame of gender equality, emphasized the cross‐cutting character of gender issues and justified the necessity for legal action through recourses to human rights (Bundestag 1993, 1545).