The Institutional Obstacles to Coalition Building
The evidence collected on the debate shows that institutional obstacles prevented the formation of a broad, intersectoral coalition supporting a Framework Directive like the one which fought against the Services Directive. As a consequence, only the supranational channels for mobilization, namely political groups of the EU and unions, in the EU engaged with the debate. In contrast, the transnational networks of civil society and the domestic route via national parties, parliaments and governments, remained silent.
A first explanation echoes Fritz Sharpf’s analysis which stresses the diversity of institutional arrangements in the Member States as well as the role of veto players as main obstacles to positive integration. When looking at the diversity of national arrangements and the political inertia they entail, it is interesting to focus on France and Germany: mainly for three reasons. First, both countries are major players in EU politics and, a fortiori prior to the enlargement of2004, they accounted for a large share of the votes in the Council. Second, they have contrasted institutional regimes and traditions in the realm of SGI and, roughly, stand for two different models in the EU. Both have a strong tradition of involvement of public authorities in the provision and strong protection and regulation of SGI. But whereas France displays a centralized system with large, national operators traditionally owned and regulated by the government, the German Federal Republic is more a decentralized system with multiple regional operators and competences located at the level of the Lander or the municipalities. Third, French and German actors have largely occupied the scene during the debates on SGI at the EU level. For example, French and German contributions together represented 40 % of all responses received by the EU Commission in its public consultation over its Green paper on SGI (respectively 23 and 17 %) (Moudjed 2004).
A second important explanation brings more novel insights as it deals with the role of entrenched sectoral policies at the EU level as an impediment to intersectoral coalition building. It is in tune with the argument made by historical institutionalists that ‘policies shape politics’: in other words, established policy practices ‘affect the social identities, goals and capabilities of groups that subsequently struggle or ally in politics’ (Skocpol 1992, p. 58). As explained in the previous chapters, EU policy in the realm of SGI has, since its origins, taken the form of sectoral liberalization directives. This has led actors to shape their preferences along sectoral lines. As a result, as claimed by Smith (2006), the ‘sectorising of the government of Europe’ entails a pro-liberalization bias which favours specific pro-market interest groups over pro-regulation actors, such as political parties and unions which stand for diffuse citizens’ interests.
As far as national positions are concerned, a first group of countries, namely Ireland, the UK, Finland, Denmark, the Netherlands, Sweden and Italy, was more oriented towards marketization and competition, and therefore opposed to more regulation. In contrast, Germany, Austria, Portugal, France and Belgium were more geared towards a higher protection of SGI as part of their national social model, but diverged on whether such protective regulation should be located at the regional/ national or EU level (Becker 2005, p. 25). While France’s position was always supportive of more regulation of SGI, Germany had always had a more reserved position, mainly for subsidiarity reasons. Evidence about the positions of both governments shows how institutional conservatism and the defence of traditional models rooted in historical conceptions of the State (Dyson 2009) translate into political inertia and a ‘joint-decision trap’ (Scharpf 1988). Germany has been a major veto player with regard to a further involvement of the EU in SGI regulation. During the discussions on SGI at the Laeken European Council in 2001, the German government expressed concerns about a potential European framework. In the 2003 consultation on the Commission’s Green Paper, it strongly expressed its position against a legislative proposal and argued that:
Community regulations are specific to certain sectors and can only be considered in sectors of general economic interest which, due to their size and their connection, have a significant weight at the European level. Additional regulation must be justified in detail regarding a sectoral context or sectoral specificities. The Community must justify that the sector in question fulfils the conditions, that a Community competence exists, and that proposed measures are compatible with the principle of subsidiarity.
The position was to a large extent motivated by the strong objection of the German Lander, which hold important competences on SGI in the German federal system. The reflections of the Commission in its White Paper from 2004 similarly provoked a strong opposition from the Bundesrat, which considered that there was ‘neither a European competence, nor a need’ for such a move (Bundesrat 2004, §6). A further illustration of this position was provided as in 2007 the call by the mayors of ten major European cities for the protection of public services was not signed by Klaus Wowereit, the social democratic mayor of Berlin. This makes the debate over SGI a case in point for a double joint-decision trap due to the role of veto players at both the regional and federal level in Germany.
Officially, France has always supported stronger regulation by the EU; but a closer look at various actors’ statements shows that positions in the debate over the Framework Directive on SGI were more ambivalent. The government actually stressed that a general framework should not contradict existing sectoral rules. In addition, large public companies in the utilities sector (such as France Telecom, La Poste, EDF, GDF) claimed that they joined in calls for an EU framework, but suggested at the same time that detailed regulation should remain specific to each sector and that, in the same vein, the definition of universal service obligations should not be established at the intersectoral level and that the calculation of costs generated by the provision of universal services was very complicated (Moudjed 2004, p. 8). Thus, the preference for limited sectoral rules seemed to be pervasive even among those who had claimed to support a Framework Directive. Hence, the Social Protection Committee, which gathers representatives of Ministers for social affairs and of the EU Commission and advises the Employment and Social Affairs Council, never expressed a clear stance on the issue and preferred to ignore it.
The same sectorizing of preferences can be observed at the EU level. A study conducted by Mangenot and his colleagues in 2004-2005 highlights ‘structuring sectoral logics related to genuine specificities, as well as agents’ logics related to their respective place’ (Mangenot 2005, p. 155), thus suggesting that the sectorizing of governance cannot be disentangled from politics. The interviews conducted revealed that ETUC
(pro-Framework Directive) and the Union of Industrial and Employers' Confederations of Europe (UNICE, now BusinessEurope) had clearly contrasted positions, namely for and against the directive. But the Bureau europeen des unions de consommateurs (BEUC, the European Consumer Organization) and CEEP had more nuanced, intermediate positions. Most importantly, all European umbrella organizations of services providers and regulators proved to be ‘opposed to the existence of general provisions, not seeing any added value with regard to existing detailed sectoral rules’ (ibid., p. 168).
In turn, the representatives of more diffuse interests, namely trade unions and political parties, found it difficult to gather sufficient support for a Framework Directive on SGI. ETUC and the PES led in 2006-2007 parallel campaigns in order to persuade the Commission to take action and propose a Framework Directive. In November 2006, ETUC launched a petition demanding a ‘strong regulatory framework’ (i.e. a directive) for ‘high-quality public services accessible to all’. The petition could be both signed on paper or on the dedicated website www.petitionpulicservice.eu, and the ambition was to garner one million signatures. In spite of the strong involvement of the French CGT, the German DGB and Ver.di (the German union for services) (Kowalsky 2008) , the campaign ended up being disappointing since the one million target could not be achieved. On 17 November 2007, ETUC symbolically handed about 500,000 signatures to the President of the EU Commission on the day before it was to publish a new communication on SGI (ibid., p. 348). At that time, though, it was already known that the Commission was not ready to change its course of action, which triggered criticism by ETUC, its Secretary General John Monks claiming that ‘the Commission is negative and short-sighted if it does not respect the essential role of public services and accord them adequate protection from market forces’ (ETUC 2007a). In addition, the petition was supported by a declaration of the mayors of ten European capitals, claiming that:
the mayors of European capital cities warn against following the route of
privatisation alone. The joint declaration states that the European
Commission must stop continually pushing the privatisation-liberalisation
of public services as the answer. In opposition to this neo-liberal approach, the mayors who have signed the declaration, together with the ETUC, propose a European framework directive to guarantee services and support their prime mission of cohesion and solidarity, as well as making them affordable to all. (ETUC 2007b)
When the petition was officially closed, it was signed by about
700,000 people. Typically, the distribution of signatures in the various EU-Member States is very unequal with Romania, France and Belgium, accounting for about 50 % of all signatures, while Central, Eastern and Northern countries (including Scandinavia and the Baltics) show very low levels of commitment (Kowalsky 2008, p. 357).
In the view of EPSU,  the level of mobilization was weakened by the fact that a ‘European legal framework’ is an abstract topic for grassroots members on the ground. Moreover, a possible contradiction between the Framework Directive and sectoral rules also impeded support, for example, in the postal sector. Fundamentally, in countries where welfare services are well developed and performing, unions have expressed concern that rules at the EU level would contribute to the deterioration rather than the improvement of standards on the ground. In this respect, the adoption of the Services Directive had a very negative impact on the will to re-regulate: like, for example, in Belgium, where most political and social actors have traditionally been in favour of positive integration in social matters. Positions are now more defensive as pro-regulation actors think that they should ring-fence their own system against possible negative effects of EU rules. In parallel with the ETUC petition, the PES set up a working group—including MEPs, lawyers and representatives of EU institutions, public authorities and civil society—which elaborated an actual legislative proposal for a Framework directive on SGI 1 1 (see Box 4.1).
Box 4.1. Proposal for a Framework Directive on services of general economic interest, groups of the socialists and social democrats in the European Parliament (contents)
CHAPTER I GENERAL PROVISIONS Article 1—Subject Article 2—Scope Article 3—Definitions
Article 4—Shared responsibility of the Member States and the European Community
Article 5—Relationship with other provisions of Community law
CHAPTER II TRANSFER OF SERVICES OF GENERAL
Article 6—Free choice of operation method
Article 7—Direct operation
Article 8—Outsourced operation
CHAPTER III OPERATION OF SERVICES OF GENERAL ECONOMIC INTEREST
Article 9—Common scope of public service obligations Article 10—Considerations of individual objectives CHAPTER IV FINANCING OF SERVICES OF GENERAL ECONOMIC INTEREST
Article 11—Power of Member States to provide financing Article 12—Financing methods Article 13—Granting of special or exclusive rights Article 14—Granting of public service compensation Article 15—Assistance from a public services fund Article 16—Establishment of a tariff averaging system
CHAPTER V CONTROL AND REGULATION OF SERVICES OF GENERAL ECONOMIC INTEREST Article 17—Authority responsible for control Article 18—Forms of regulation
CHAPTER VI USERS’ RIGHTS, QUALITY AND EVALUATION OF SERVICES OF GENERAL ECONOMIC INTEREST Article 19—Users’ rights
Box 4.1 (continued)
Article 20—Policy on quality Article 21—Evaluation
Article 22—Public consultation and participation methods CHAPTER VII FINAL PROVISIONS Article 23—Transposition into national law Article 24—Entry into force
Source: www.socialistsanddemocrats.eu, date accessed 20 July 2015
The socialists demanded that a Framework Directive should be adopted along with—or prior to—the Services Directive. It was published in February 2007 and transmitted to the Commission President Barroso. However, while reflecting the official position of the group of the social democrats in the EP, the proposal did not enjoy unanimous support among the social democrats at the national level. Again, the German social democrats, especially those in the Bundesrat, proved very reluctant: for them, welfare services at the local and regional level in Germany were never part of the European internal market and any EU regulation of the SGI would only hollow out the regulatory competences of local authorities.
To conclude, there is evidence that the established sectorizing of policy making and politics in the realm of SGI and reluctance to transfer more powers to the EU (that is the defence of subsidiarity) among powerful veto players (namely Germany or the German Lander) concurred to thwart the efforts of a pro-regulation coalition made of civil society organizations, trade unions and an important fraction of the social democrats. However, the following section will show that these institutional obstacles were reinforced and discursively constructed in ideologically driven political debates.