This section discusses whether national interest formation increasingly became influenced by the Community level or, if by the end of the cold war, national interest continuously was being defined domestically. It is argued in line with institutionalist theories that EC institutions increasingly did shape interests of governments. In the early years of European integration, social science explanations of this process were dominated by neofunctional theory.
It predicted that integration would become a self-reinforcing process of spillover, as cooperation in one area soon would lead to cooperation in another. The neofunctionalists had to revise their theory as the European Community in the 1960s took a clear intergovernmental direction, especially as the French government sought to limit the influence of the supranational institutions. 11 Neofunctionalism has, however, been revived under the label of (historical) institutionalism.
The institutionalist perspective argues that national preferences shift as an unintended consequence of prior integration, any development is "path-dependent". In this view, power and preferences, rather than being given as exogenous structures, are influenced by the integration process itself. Economic integration and institutional development reinforces itself through feedback or "spillover". Either the development generates changes in national interest, thereby spurring further integration, or deepening supranational institutions themselves start to influence policy decisions.
Institutionalists do not claim that given structures are unimportant, but they see previous integration and institution-building as being crucial in shaping decisions made by state representatives (Moravcsik 2003:489). For example, Sandholtz (1993:3) argues that there is a link between EC institutions and state interest formation: "Community decisions are bargains that reflect state interests, but those interests are shaped in part by membership in the EC".
Transnational exchange has pushed the organisations of the EC to construct new policies and new arenas for policy-relevant behaviour, arenas, which once established, promote further transactional exchange. Once there is movement towards supranationalism, EC rules also produce a logic of its own, which may be called "institutionalization" (Sweet and Sandholtz 1998:2-16). Pierson (1998:34-50) lists four reasons for why the integration process may not be fully controlled by the participating governments.
Firstly, EC organisations have acquired autonomous capabilities for decision-making; secondly, political decision-makers have a restricted time-horizon; thirdly, unintended consequences of decisions may be considerable; and, finally, there may be shifts in the preferences of political leaders. Furthermore, he argues that once states lose some control over the process, it may be difficult to regain it because of three reasons, namely, the resistance of supranational actors, institutional barriers to reform, and sunk costs and the rising price of exit.
Whereas early European integration theory and ideology envisioned the "end of politics" as the result of an increasingly technocratic supranational management,12 political struggles remained very much alive, and interest conflict continued to be channelled through the state; the state remained the arena where the 'national interest' was being defined, and the state continued to represent the national interests vis-i?? -vis other states. Politics continued after the establishment of the European institutions to be shaped in a domestic setting. As noted by Grosser (1980:330),
the common Franco-German aim which was affirmed in 1950 and then with growing vehemence up to 1963, and after that date with a persistence of varying but dependable intensity, does not prevent a kind of drifting apart of the two countries, less in their relations than in the differing evolution of their internal political climate. Yet it is not contradictory if one also notes growing convergences which are anchored in reality rather than fully perceived". The steady growth of interaction between the national societies of the EC implied an ever increasing interdependence between them.
This was true especially for the economic field and consequently economic groups had their interests vested in continued cooperation and even greater integration. The interconnectedness of the national economies was also evident through the EMS and as the economies became more and more open, domestic macroeconomic conditions came to be increasingly influenced by evolvements outside domestic control. Dyson and Featherstone (1999:2), for example, argue that in the 1980s a monetary "stability culture" was beginning to form.
Neofunctionalism under the new label of institutionalism was more modest than mainstream theory of the 1960s in that it acknowledged that spillover could only be a partial explanation of regional integration. Institutionalists tend instead to take a more "syncretic" approach incorporating assumptions from both sides of the debate (O'Neill 1996:51). It was clear, even before the relaunch of the Community project with the Single Market proposal of 1985, that European integration was by no means the modest intergovernmental enterprise reflected in the dominant state-centric paradigm.
The regional process has never been driven solely by the domestic priorities of its member states, even though they have all utilised the Community's policy procedures to pursue their respective national interests. Although the state-centric paradigm did reflect the national preferences that continue to motivate the member states, exclusive domestic agendas were by no means their only concern. At the same time, the evolving Community process was far from being the sort of inexorable push towards a Pan European polity predicted by the supranationalist account of events" (O'Neill 1996:83).
Newman (1996:23) also argues that integrationist theories are correct in that the European Community had become more than just the sum of its components, and that the separation between the "domestic" and the "external" had eroded. However, he says that state-centric theories are right in upholding the continued dominance of governments, or at least some of them. Some intergovernmentalist theorists too take a somewhat more modified view on the dynamics of European integration. Keohane and Hoffmann (1990; 1991), for example, agree with the point that spillovers are important. 13
Thus, there seems to be support for the institutionalist argument that national interest formation is influenced by the common interest in cooperation, and that integration, in a sense, may have its own logic, even if one may accept that the EC has an intergovernmental character. European integration post-1989 While states still remain the most powerful actors in the European Community (European Union after Maastricht), the pooling of sovereignty and even concession of sovereignty at the supranational level have taken a seemingly radical turn especially since the Maastricht treaty.
According to Wallace (1997:35), this treaty encompasses almost all the core functions of the European nation-state in some way or another. The states no longer have full control of the national territory and borders, police, citizenship and immigration, currency, taxation, financial transfers, management of the economy, promotion of industry, representation and accountability, foreign policy and defence, and "[o]nly welfare remained securely in the hands of national governments ".
The importance of the institutions in Brussels can also be witnessed by the dramatic growth in the number of interest-groups present there (Marks, Hooghe and Blank 1995). Milward (2002:27), though, upholds that "[t]he Union remains what it has always been, a support framework for national state politics in a period in which these have become increasingly difficult to pursue". Conclusion This essay argues that the EC member states by 1989 had changed as a result of the integration process.
Some important changes had slowly evolved during the years from 1957: increasingly more decisions were being made at the intergovernmental or supranational level, and national interest formation was increasingly being shaped by developments at the European level. It can be argued, in line with a syncretic approach, that European integration certainly displays intergovernmental features, but that "over time they have given way to a growing emphasis on supranationalism" (McCormick 1999:145).
What the reviewed approaches do not capture, however, are the implications for social relations in Europe as a result of the integration process. With a more broadly based social theory understanding of the state we could have explored how integration has affected Europe's socio-economic order, as do for example Rhodes and Van Apeldoorn (1997) in their discussion of the transformation of national capitalisms in Western Europe.
This would arguably have given us a deeper understanding of the investigated issue, but would obviously have required a more complex framework than the one presented here in this essay. In conclusion, one might have to give a somewhat ambiguous answer to the question of whether European integration had, by 1989, become more of a mechanism for bargaining rather than having changed the nature of its member states. It should be clear that the process of European integration actually had changed member states, both in terms of sovereignty and autonomy, as well as having shaped national interest.
But even though the EC perhaps had become more than simply just a mechanism for inter-state bargaining in the late 1980s, it was also clear that it still was very much so.
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