The EU and Marketization: An Ongoing Love Story
A Structural Bias?
Many scholars have critically contended that the EU exhibits a structural bias, empowering pro-market actors and neoliberal ideas. This argument has been made by scholars of political economy (Bieler 2005; van Apeldoorn et al. 2009; Bieler 2015), social policy (Barbier 2008), or those adopting an ideational, historical (Denord (2008); Denord and Schwartz
2009) or even legal approach of European integration (Joerges 2009a, b). Scharpf (1999, 2010) has compellingly theorized that, in the EU, negative integration (market making mainly through liberalization) was facilitated by the legal and institutional power position of non-majoritarian institutions such as the Commission and the European Court of Justice (ECJ), while positive integration is strongly impeded by institutional and ideological divergences among the Member States and the resulting joint decision trap. This, he concludes, prevents the EU from embodying or achieving a (supranational) social market economy. To a certain extent, this is illustrated by the politics of welfare services in the EU. Looking back at policy making in this realm since the relaunch of the Internal Market in the late 1980s, it is clear that decision makers have used regional integration to embrace and accelerate the neoliberal restructuring—occurring on a global scale—of European mixed economies which had emerged in the post-war era. In this regard, the significance of the EU’s role stems from the overlap between integration through the market and integration through law.
On the one hand, the European Commission has used its political leadership and institutional powers in two ways. First, by promoting the Single Market agenda and using its competences sometimes in an adversarial way by taking legal action to overcome Member States’ reluctance to embrace liberalization. This has resulted in the adoption of liberalization directives in the areas of transport (air, railway and urban transport), energy (gas and electricity), telecommunications and broadcasting, and, more recently, healthcare. As they originally only affected producers and industrial consumers, all these directives include a clause foreseeing revisions which has secured the continuous expansion of marketization of the services offered to the public. Moreover, the EU Commission has used its strong exclusive competences in the field of competition policy to curtail the intervention of governments through states aid, that is, financial support to former monopolistic enterprises providing these services. This has left unresolved issues surrounding the most efficient and fair ways to accommodate the rules of competitive markets with adequate funding for the provision of a quality, affordable and often unprofitable ‘universal service’ by one provider.
On the other hand, these tensions between competition and general interest were particularly reflected and shaped by the way in which SGI was dealt with in primary law, that is, the EU treaties, on the one hand, and the jurisprudence of the ECJ, on the other. From the first mention of SGI in the treaties of Rome in 1957 up to the last provisions included in the Treaty of Lisbon adopted in 2008, the EU primary law exhibits a continuous ambiguity as to whether competition rules should prevail over general interest and social cohesion or the other way around. Increasingly, conflicts have not only concerned the balance between market freedom and state regulation, but also the extent to which the EU is able to affect SGI. While the Treaty of Lisbon provides, with a new Article 14, a clear legal basis for the EU to legislate, and possibly re-regulate, a number of SGI, it also includes a Protocol on SGI which strongly stresses subsidiarity, that is, the autonomy of Member States to organize SGI provision. The problem with the current equilibrium is that it left the EU solely with the capacity to act through competition policy and, in turn, national states do not have the possibility to escape the competition and market rules which are bound to affect the provision of welfare services. As far as the ECJ is concerned, it can be said that jurisprudence has been consistently versatile. After an initial period of pro-market integrative rulings in the 1970s and 1980s, the Court issued, during a second period in the 1990s and 2000s, a series of judgements giving Member States greater autonomy in supporting public services (Prosser 2005a). This was notably reflected in the famous Altmark case that provided a framework defining the parameters for a legitimate government support of SGI. Since every judgement relies on specific fine legal arguments, the political implications often remained unclear. The consequence of this unsettled situation has been that various political actors were able to invoke different legal arguments present in case law in order to legitimize their normative positions.
This suggests that the institutional and legal features of the EU do not have a mechanical or automatic effect on policy making. While the ECJ appears either trapped in legal doctrine or sensitive to changing moods in the broader political environment, the increasing involvement of the EP in policy issues related to the Internal Market (e.g. public procurement) has opened the way for politicization. This has contributed to weakening the relative strength of non-majoritarian institutions in the EU. From a theoretical point of view, the neoliberal bias of the EU should not be seen as structural: rather, it is renegotiated and redefined in every debate on every specific issue, a process which could be observed across several policy areas as broader characteristics of the ‘fabric’ of EU policies (Crespy and Ravinet 2014). As far as welfare services are concerned, the nature of new legal provisions adopted over the successive treaty changes should in the first place be seen as the result of actors’ struggles, and before said rules become potential constraints. The recognition of the role of SGI for social cohesion in a new article of the Treaty of Amsterdam in 1997 was, for example, a victory for a coalition composed of a number of interest groups (mainly the Centre europeen des entreprises a participation pub- lique (CEEP), Comite europeen de liaison sur les services d’interet general (CELSIG) and European Tradue Union Confederation (ETUC)) and Member States championed by France. Similarly, the progressive recognition of various labels such as non-economic or social SGI has been a result of actors’ mobilization for recognition of the specificities of such services in the hope of a greater protection vis-a-vis competition law. Despite sustained contention over the regulation and funding of welfare services, the agenda geared towards marketization has continuously prevailed.