The European Parliament's strategy in EU economic and financial reform

ABSTRACT

This article investigates the bargaining strategy of the European Parliament (EP) as a co-legislator in the field of economic and financial governance on the basis of two prominent case studies – the legislative packages for financial supervision and economic governance. It analyses the impact the internal cohesion of the EP had on its bargaining strategy in informal trilogue negotiations with the Council and the Commission at first reading. The article argues that the degree of internal cohesion had a very limited impact on the EP's external bargaining strategy in the trilogues. This is visible both in the substance of the EP position – the issues the EP chose to promote – as well as in the form – the negotiation tactics. Thus, while the internal functioning of the EP is increasingly dominated by ideological and majoritarian features, externally the EP insists on promoting issues where a strong consensus exists to maximize its bargaining power.

KEY WORDS:

• EU governance
• European Parliament
• legislative bargaining

ACKNOWLEDGEMENTS

We wish to thank Gabriel Glöckler, Dermot Hodson, Stefan Huemer, Johannes Lindner, David Marshall, Christine Reh and Berthold Rittberger, as well as all the participants at the UACES conference in Passau, the ECPR conference in Tampere and the CES conference in Amsterdam for their helpful comments. The authors would also like to thank David Farrell, Simon Hix and Roger Scully for the use of the EPRG MEP Survey Dataset and Laurence Flache for her helpful research assistance. The views presented here are those of the authors and do not necessarily reflect those of the institution to which they are affiliated.

Notes

1 Kreppel (1999: 533) finds that the technical amendments of the EP, as opposed to substantial ones that expand the proposal or add a new policy dimension, have greater chances of being accepted and incorporated into EU law.

2 In the field of economic governance, ideological cleavages between political groups within the EP run along traditional lines such as regulated vs unregulated markets, interventionist vs free-market policies, redistributive vs Pareto-improving policies (Lord 2003: 250).

3 This may explain why Parliament has not rejected a codecision compromise made in trilogue by a committee (Marshall 2010).

4 The politics of strategic bargaining in the EP would then follow the logic of two-level games which models the interaction negotiations to find an agreement at one level, and coalition building at another (Putnam 1988).

5 The specific working of this question was: ‘Where would you place your European political group on the left–right spectrum?' (1 = left; 11 = right).

6 The specific working of this question was: ‘Where would you place your European political group on the question of European integration?' (1 = gone much too far; 11 = EU should become a federal state).

7 The specific working of this question was: ‘Government should play a greater role in managing the economy' (1 = agree strongly; 5 = disagree strongly).

8 The specific working of this question was:'Do you think there should be more or less EU-wide regulation in the area of financial services?' (1 = a lot more; 5 = a lot less).

9 This is in line with the finding of Hagemann and Hoyland (2010) according to which the Council has conditional agenda-setting power due to the change in the EP majority thresholds from the first to the second reading.

Additional information

Notes on contributors

Mícheál O'Keeffe

Biographical notes

Mícheál O'Keeffe is an economist at the European Central Bank and PhD candidate at the London School of Economics and Political Science.

Marion Salines

Marion Salines and Marta Wieczorek are principal economists at the European Central Bank.

Marta Wieczorek

Marion Salines and Marta Wieczorek are principal economists at the European Central Bank.