The increasing use of intergovernmentalism: asymetric information and increased transaction costs

A series of lectures under the title “Post Lisbon Challenges to Europe” started on 10 February, as part of Leiden University’s Honours College and our Jean Monnet Centre of Excellence programme. The first lecture, by Tom de Bruijn, former Permanent Representative of the Netherlands to the European Union, offered some important insights into the changing dynamics of decision making in the EU, related to the themes that we have explored since the start of this blog.

In his lively and thought-provoking presentation, Mr. de Bruijn talked, among others, about the differences between intergovernmental and supranational methods of decision making in the post Lisbon EU. This is a theme that has been at the core of the literature on European integration and there has been so much ink spilled on it in studies discussing what supranational and intergovernmental means, that it has been a pleasant surprise that the speaker not only brought a new angle to it, but also highlighted the differences in decision making after Lisbon and the economic crisis. In particular, he drew our attention to the actors involved in preparing decision making and treaty changes when these are discussed in European Council setting, as it has been so often during the last couple of years. In contrast to the supranational or Monnet method, where the Commission not only prepares but also takes care to distribute in advance draft proposals for any important policy measures or new initiatives, under the ‘new intergovernmentalism’ as we could call it, of (crisis) decision making in the European Council, member state representatives may not receive information about new proposals or initiatives much in advance. This is especially true of new initiatives that are prepared by one or two member states, often, as we have seen in the last two years, France and Germany. Member state representatives such as the permanent representatives, must then seek new ways of preparing crucial European Council meetings and informing their Heads of State and government what will come to be discussed. The formal task of preparing European Councils rests of course with the President of the European Union, currently Mr. Herman van Rompuy, whose abilities and expertise have been praised highly in a recent article in the NRC Handelsblad and have been also evident in a recent interview for Dutch television to be watched here. Mr. van Rompuy, however, despite his great personal qualities, does not have at his disposal the resources which have been developed at the European Commission, a body devised since the outset of the European Communities to be both a centre of expertise and promoter of the common interest, including the interests of the smaller member states. The President of the European Union does not have similar mandate or staff. Thus it is not surprising that Mr. van Rompuy – and any other President of the EU that would replace him when his mandate is up – would need to rely on the resources of the member states, in terms of new policy proposals. In the case of recent European Council decision making, these are, most often, France and Germany. In terms of the work of Permanent Representatives and anyone involved in preparing decisions at EU level, this means that they must develop and mobilize contacts in the most important European capitals to be informed and prepared for decision making in the new intergovernmentalist setting. Mr. de Bruijn suggested that such an adjustment has already taken place in order to anticipate decision making for example underlying the so called Fiscal Compact treaty (Treaty on Stability, Coordination and Governance TSCG, to be found here) which has just been signed by 25 EU leaders in the margins of the European Council of 1-2 March 2012.

Our speaker did not need to spell out the implications of these different ways of preparing decisions  in great detail. Under the new intergovernmentalism, the agenda is unclear, it is more difficult to obtain information on the proposals to be discussed (unless the member states putting something for discussion decide to distribute documents in advance) and any information obtained may be even unreliable or misleading. Therefore it is more difficult for leaders to prepare their negotiating positions carefully and democratically. This is especially true for smaller member states and, I suspect, even more so for new member states with small or inexperienced diplomatic staff.

New member states may lose the investment in administrative capacity made before accession to the EU. It is one thing to have created good systems for coordination of EU affairs and linked them to the Commission and COREPER, it is another to start looking for contacts in Berlin and Paris so that you can find our what will be on the table at the next summit. I am reminded of the well-known argument from the institutionalist literature that institutions exist to save transaction costs in bargaining and to help participants obtain information that is crucial for strategic decisions. Compared to European Council decision making, under the ‘normal’, Community method procedure , the European Commission saves transaction costs and provides reliable information for all member states, even Euro skeptic ones.

Going further beyond the scope of what Mr. de Bruijn said, it is obvious that this new intergovernmentalism is a less transparent and accountable way of making decisions although those in favour of intergovernmentalism would argue that legitimacy at the EU level is obtained through the democratically elected heads of state and government anyway, so there should be no problem. The question is however, which heads of state and government? Even if the German and French administrations prepare well thought out decisions  to be put on the table by the Franco-German tandem, which, if any, member states get informed in advance? How much consultation is possible before the heads of state and government meet for their notoriously long European Council sessions? No wonder European Councils have become so long and time-consuming. In such settings, a disproportionate role is given to the Head of State or Government negotiating on the day… or night, as it may be. We better hope we are all represented by Super(wo)man.


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