Is Europe a Bargaining Forum?

Starting with the European Coal and Steel Community (ECSC) in 1952, and subsequently the treaties of Rome in 1957, up until the Single European Act of 1986, the member states of the European Community (EC)1 engaged in hitherto unprecedented levels of inter-state cooperation, even though there not always was a unidirectional development towards an "ever closer union". The dramatic events of 1989 and the following years fundamentally altered the geopolitical situation in Europe, and this consequently may have produced a different logic for economic and political integration in the region.

Thus, the scope for this essay is the process which tied a large part of Western Europe together during the post-WWII period up until the political "earthquake" of 1989, and it will discuss whether it by 1989 had become clear that the EC was a mechanism through which member states bargained rather than an entity that had fundamentally changed the nature of those states.

This essay argues that important characteristics of the states that made up the EC in 1989, actually had changed as a result of the steps towards integration: there had been some interesting developments, including, in some areas, shifts from one decision-making arena to another, and a "Europeanisation" of national interest.

First, the history of the EC will sketchily be outlined, and then it will be discussed whether it represented more a forum for inter-state bargaining rather than a process inducing change in the nature of the member states, by assessing the evolution of the EC in regards to the sovereignty, the autonomy and the national interest of these states. The discussion will primarily consider approaches to integration provided by state-centric and (historical) institutionalist theories2. Finally, the essay gives a brief description of the development post-1989. Concepts

A few clarifications on the concepts in question may be useful for the discussion, and given the limits for this essay, it will for the sake of brevity be relied upon rather simplistic and superficial definitions. The concept of the state used here is mainly a political one, and it may be defined as the central government controlling a delimited territory and its population; its most prominent features being its sovereign status, autonomy, and functions of guaranteeing the security and welfare of the population, as well as representing the national interest vis-i??

-vis other states and actors. State sovereignty refers to the exclusive right of the state to exert control over its own territory and population, and state autonomy can be understood as the ability to pursue policies consistent with its national interest. It may be assumed that the national interest, or "national preferences", reflects " the objectives of those domestic groups which influence the state apparatus" (Moravcsik 2003:24). 3 Thus, changes in the nature of states here means change along any one of these dimensions.

The process towards increased inter-state cooperation, commonly called "integration", implies that "the economies, societies and administrations of these national entities become gradually merged into a larger identity" (Milward 1992:2). It is also useful to describe the EC in order to say something about the relationship between the Community level and its member states. Obviously, different theories present different views on what kind of arrangement the EC might be. State-centric approaches treat it as some kind of intergovernmental organisation, where the ultimate power lies with the member states.

Institutionalist approaches on the other hand, view the EC as more than just a channel for bargaining between independent (or to some degree interdependent) nation-states: policy making decisions are actually formed also at the Community-level, and this level has a fundamental influence on the associated states. 4 The EC clearly contains elements of both intergovernmentalism and supranationalism: the Commission, from the start, as well as the EC Court of Justice, clearly had a supranational character, whereas Community legislation through the Council displays a more inter-governmental profile.

Keohane and Hoffmann (1991:15), for example, reject a strictly statist or intergovernmental model of the EC, because, as they see it, "supranationality" (defined as a process of decisionmaking that emphasizes compromises and a search for common interests rather than vetoing by the participants) indeed is an important aspect of the Community political system. 5 Historical evolution of the EC From the establishment of the ECSC in 1952, European integration slowly evolved through some major treaties where participating governments decided to pool, or even concede, sovereignty at the supranational level.

The geopolitical situation after 1945, characterized by a desire to prevent new wars, superpower struggle, the revitalisation of Germany (FRG), as well as increasing transborder trade flows, drove the governments of Western Europe towards recognition that cooperation in one way or another was inevitable. Surely, supranational ideology, as functionalism and federalism, did play a role in "moulding" the political environment to accept deeper forms of cooperation, even though, scholars such as Milward (1992) and Moravcsik (2003) contend that integration was driven forward by, partly geopolitical,6 and, primarily economic, national interests .

After the attempt to set up the European Defence Community was trenched in the French general assembly in 1954, efforts to establish closer economic cooperation nonetheless continued. As the German Chancellor, Adenauer, favoured close relations with France,7 the treaty of Rome resulted in a customs union and a common agricultural policy, establishing the EEC, in which Britain did not want to take part. The evolution continued in the 1960s with the consolidation of the common market. When Britain, out of economic necessities, applied for membership, entry was blocked by de Gaulle (Moravcsik 2003).

8 In January 1966, the Community took a clear intergovernmentalist turn with the "Luxembourg-compromise", as the French government ensured that qualified majority voting in practice became limited by asserting the right to veto in matters where "vital interest was at stake" (Moravcsik 1991:42, Wallace 1997:29). The economic turbulence of the 1970s and dollar dominance induced efforts to establish closer monetary coordination, and in 1979 the European Monetary System (EMS) was launched in order to create a zone of monetary stability in Europe (Dyson and Featherstone 1999:2).

After a period of "Europessimism" and "Eurosclerosis" in the late 1970s and early 1980s, integration was relaunched in 1986 with the Single European Act (SEA). This reform aimed to create "an area without internal frontiers in which the free movement of goods, persons, services, and capital is ensured" (Article 8A of the 1985 Commission White Paper, as amended by the SEA. Cited in Moravcsik 1991:41). In addition, the SEA reformed procedural matters by expanding the use of qualified majority voting (only on internal market issues, however) in the Council of Ministers (Moravcsik 1991:42).

Sovereignty and autonomy - Declining state powers? This section considers some state-centric accounts on how the major developments of European integration between 1957 and 1989 affected the sovereignty and autonomy of the member states. It indicates that states by 1989 still remained in control, even though an increasing number of decisions were being made, either at supranational (in the Commission) or intergovernmental (in the Council) level. The state-centric approach, commonly termed intergovernmentalism, sees integration as being driven by a series of inter-state bargains.

9 There are, however, different views on how the member states have been affected by this process. Milward (1992), for example, claims that the evolution of the EC has been an important part of the reassertion of the nation-state as an organizational unity, after the interwar period and WWII had left it in crisis. For Milward, European integration was simply a question of adapting to global forces, which posed a significant challenge to the medium-sized, modestly resourced European states.

Cooperation, rather than competition, was necessary for these states to maximise their interests in the new international order. Integration, however, was limited to isolated areas, and intrusion on sovereignty was only nominal (O'Neill 1996:55). 10 A scholar who argues that European integration has fundamentally changed the West European states, is Wallace (1997). He agrees with Milward in that the European nation-state was indeed strengthened in the early post-war period, and claims that integration must be seen in a wider global context.

Especially important was the American efforts to promote regional integration in Europe. He argues (with Milward, Hoffmann, and others) that until the end of the 1960s there was "positive-sum relationship" between the institutions for economic integration (EEC and OEEC) and security (NATO) which re-established national legitimacy and autonomy. However, he says, the years in which formal political integration seemed to be making least progress - between 1972 and 1984-85 - appear in retrospect to have witnessed a progressive erosion of national autonomy, arising out of changes in technology (...), in methods of production and management, and in the explosion of cross-border movement throughout Western-Europe.

These trends have been reinforced by the integration of financial markets (... ), which has been such a marked development during the 1980s (Wallace 1997:24). Wallace (1997:39-44) argues that the states of Western Europe have changed dramatically, and have moved far away from the ideal held by national leaders, such as de Gaulle, in the early stages of European integration.

But how far one thinks the functions of the state have been undermined depends on one's conception of the state, and this differs between different European countries. Some general remarks can still be made, though. Wallace mentions that states have lost control over national economies, and that the importance of national defence has declined. This has "left the provision of welfare and related public goods as the most significant function of West European nation-states".

Furthermore, state sovereignty was formally challenged by the 1985 Schengen Agreement, which provided for the removal of internal frontier controls both on goods and people, and provided consequently for cooperation among police, customs and intelligence services. This involved the abandonment of one of the most basic principles of the nation-state. And, finally, the most remarkable development to challenge national sovereignty formally was the acceptance of EC law as superior to domestic law in all areas of Community competence under the Treaties.

Even though sovereignty had been altered, it can be argued that states had had their autonomy reduced as a result of broader developments in the 1970s and 1980s, rather than having lost ground fundamentally in the area of sovereignty. For example, Wallace (1997:35) maintains that the states remained in control of the integration process as they bargained to gain the benefits from cooperation and increased openness, and at the same time not conceding too much national autonomy.

The SEA was in that respect "a classic compromise, in which governments committed to the maintenance of as much autonomy as possible nevertheless agreed a new package of rules under what seemed to them powerful economic and political imperatives". Dinan (1994:3) argues along the same line as he holds the SEA as a typical example of how intergovernmentalism and supranationalism are reconciled, and that that member states share sovereignty simply because it is in their national interest.

Furthermore, Keohane and Hoffmann (1990:227) claim that European integration indeed is "an experiment in pooling sovereignty, not in transferring it from states to supranational institutions". And, that decisionmaking to a large extent is still intergovernmental rather than supranational can be reflected by the fact that many of the key decisions of the integration process have come out of intergovernmental conferences, outside the formal institutional framework of the Community (McCormick 1999:143).