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Cini: European Union Politics 2e

Chapter 05

Regulatory federalism in the European Union

Although the 'f' word of European integration is still more or less a taboo in some member states, elements of federalism – understood both as philosophical principles and empirical facts – have been carved into the institutional structure and policy-making of the EU. One of the most prominent examples is the increasingly sophisticated regulatory regime of the Single Market.

The formation of the Single Market requires the removal of internal barriers to allow the free movement of capital, goods, labour and services. The operation of the Single Market demands mutual recognition, fair competition and environment protection. All these rely on a regulatory regime to supervise the elimination of internal borders (i.e., negative integration) and adjust the possible distortion of market forces (i.e., positive integration). Because of these requirements, the completion of the Single Market has led to the need for the regulatory function of the EU.

Institutionally, the Single Market is the policy area where the 'community method' applies. This means that, subject to the consent of the Council, the European Commission and the European Parliament are playing a key role in the EU legislation of the Single Market, with the jurisdiction power residing in the European Court of Justice. Such a decision-making structure effectively creates the institutional infrastructure of regulatory federalism in the EU.

In recent years the EU has become more and more proactive in regulating the Single Market. The antitrust case against Microsoft is perhaps the most eye-catching example where the EU's regulatory power was exercised at a level above the member states. Nevertheless, it is worth noting that EU regulation depends on effective implementation in the member states. In the areas such as environment policy, the domestic adoption of EU rules still to a large extent determines the efficiency of EU regulation. Taken together, 'self-rule plus share rule' are gradually establishing an order of regulatory federalism in the EU.

Web Links

Federal Union, a think tank founded in 1938 to campaign for federalism for the UK, Europe and the world.
www.federalunion.org.uk/

Federal Trust, a UK-based think tank focusing on federalism and European integration
www.fedtrust.co.uk/

EU history – federalist documents
www.eu-history.leidenuniv.nl/index.php3?c=8

Further Learning Resources

Kelemen, R. Daniel (2004), The Rules of Federalism: Institutions and Regulatory Politics in the EU and Beyond, Cambridge, Massachusetts: Harvard University Press.

McKay, David (1999), Federalism and European Union: A Political Economy Perspective, Oxford: Oxford University Press.

Nicolaidis, Kalypso and Howse, Robert (eds.) (2001), The Federal Vision: Legitimacy and Levels of Governance in the United States and the European Union, Oxford: Oxford University Press.

Sbragia , Alberta (2004), 'The Future of Federalism in the European Union', paper presented at the 2004 Biennial Conference of the European Community Studies Association Canada, Montreal, Canada.
aei.pitt.edu/archive/00001877/