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ABSTRACT
The EU single market for network industries has not been accomplished after more than three decades. The clearest shortcoming of this incipient EU internal market is the lack of EU independent regulators. This design failure reflects the uneasy equilibrium between the political (un)willingness of the Member States and EU institutions, legal constraints emerging from EU case-law and economic concerns. After providing economic evidence of a failing single market in network industries and of the awareness of this failure in EU institutions, we discuss the problematic EU governance in these sectors, followed by the Meroni doctrine (hindering the single market) and its recent revision by the Court of Justice. The adaptation of NRAs in EU-wide networks together with the emergence of weak EU agencies has helped to make NRAs more EU-oriented, but this is insufficient to arrive at a single market for network industries.
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No potential conflict of interest was reported by the author(s).
Notes
1. A small selection for illustrative purposes goes as follows. In (freight) rail, as late as 2008, in COM (2008)852 on ‘European rail network for competitive freight’ the Commission has to argue that an internal freight rail market is ‘essential’ although this is elementary: freight rail only becomes competitive over long distances, i.e. in a large internal market! In the 2010 proposal for a single European railway area (SERA), the ‘structural fragmentation. is a serious obstacle to the development of a SERA’ [COM(2010)474]. Upon the proposal for the 4th railway package in 2013, Commissioner Kallas insists to ‘create a truly European railway network of tracks and routes … and an internal market for rail “ in Memo 30 January 2013. In gas and electricity, the famous Inquiry (by DG Competition) concludes that an internal energy market has not been achieved at all and “serious shortcomings” have been identified [COM(2006)851]. In SEC(2007)1179 – the impact assessment of the 3rd package – it says: “The internal market does not truly exist yet” and Member States and NRAs (national regulatory authorities) “.continue to act without taking into account the EU common interest”. In COM(2012)663 the language is tough: “Member States … need to … resist calls for inward-looking or nationally inspired policies … preventing the internal market from working effectively. They even threaten to unravel progress”. As far as eComms is concerned, in COM(2006)334 one reads that “an internal market for eComms and for radio equipment is not yet a reality”. In the EU Digital Agenda [COM(2010)245, the Commission speaks of the EU ”as a patchwork of online markets’ with ‘persistent fragmentation’ stifling competitiveness in the digital age. ‘Europe is far from having a single market for telecoms services’. Commissioner Kroes in a famous, widely distributed but formally unpublished paper (of 30 May 2013) says: ‘There is no other sector of our incomplete European single market where the barriers are so unneeded and yet so high’.
2. However, by using price convergence trends, absolute price differences (Pelkmans and Renda Citation2011) between national markets can no longer be identified – differences might still be high under a slow convergent path.
3. For example, the 2013 version of the Digital Agenda counted no less than 132 actions! In Marcus, Petropoulos, and Yeung (Citation2019) for the European Parliament, the removal of barriers in order to obtain a properly functioning EU Digital Market would yield a gain of € 177 bn, a clear sign of prior fragmentation.
4. See e.g. European Commission (Citation2013) and Pelkmans and Luchetta (Citation2013).
5. In electricity, in 2020, 14 Member States directly intervene in electricity prices for households (with 11 on the end-user price) – for business 6 Member States regulate prices in one way or another; in gas, 8 Member States employ end-user price regulation for households and 4 EU countries for gas to business.
6. Alongside many ERA or EUAR reports, for illustrative examples of interoperability issues, see Pelkmans and Di Pietrantonio (Citation2004).
7. 9/56 and 10/56, Meroni & Co., Industrie Metallurgiche s.p.a. v High Authority [1957–1958] ECR 133.
8. 98/80, Giuseppe Romano v Institut national d’assurance maladie-invalidité [1981] ECR 1259.
9. 10/56 Meroni v High Authority, 173.
10. 98/80, Romano, para 20.
11. C-270/12, United Kingdom of Great Britain and Northern Ireland v Council of European Union and European Parliament ECLI:EU:C:2014:18.
12. C-270/12, UK v Council and European Parliament, paras. 44–53, 85.
13. C-270/12 UK v Council of European Union and European Parliament, paras 79–80.
14. C-270/12 UK v Council of European Union and European Parliament, paras 46–51.
15. C-25/70 Einfuhr- und Vorratsstelle für Getreide und Futtermittel v Köster [1970] ECR 1161, para 9.
16. C-270/12 UK v Council of European Union and European Parliament, para 43.
17. C-270/12 UK v Council of European Union and European Parliament, para 65.
18. See Bocquillon and Maltby (Citation2020), 39–57, who use the expression of ‘embedded intergovernmentalism’ to illustrate the central role of governments and their entrenchment in the EU institutional framework in the field of energy. See also Herranz-Surrallés, Solorio and Fairbrass (2020) 1–17, with regard to the competence issues in the functioning of the EU energy governance; Heims (Citation2017) who demonstrated that in the sectors of maritime safety and food control (UK and German) national regulators’ attitudes towards co-ordination are often driven by protectionist interests.
19. The case of ACER and ENTSO-E is discussed at length in Eckert and Eberlein (Citation2020).
20. This is consistent with the ‘embedded intergovernmentalism’ theory of Bocquillon and Maltby (Citation2020), – national actors accept the logic of functional cooperation but block delegation to the EU level in the conventional sense.
21. Art 9 (11), Commission regulation 2015/1222/EU of 24 July 2015 establishing a guideline on capacity allocation and congestion management [2015] OJ L197/24.
22. ACER decision 6/2016 of 17 November 2016 on the electricity transmission system operators’ proposal for the determination of capacity calculation regions, paras 58–60.