Differentiated Integration in the European Union

Benjamin Leruth, Christopher Lord

• Publisher: Routledge
• Year: 2017
• ISBN:
  9781317369844
• Edition: 1
• Topic: Politics & International Relations
• Subtopic: Politics
• Index: Politics & International Relations

The notion of Differentiated Integration is increasingly used in the literature on European integration. Often employed interchangeably with the notion of "flexible integration, diverging views on its nature have led to the emergence of various definitions and, to some extent, a semantic confusion. A lack of consensus characterizes the academic literature; some authors even avoid putting an explicit definition on the term.

The main objective of this book is to seek answers for the following questions: How can one define Differentiated Integration in the European Union? Should Differentiated Integration be considered as a process, a concept, a system or a theory? Should it be seen as a temporary or a well-established phenomenon? How is this field of study likely to develop in the future? In order to do so, all chapters, written by leading experts in the field, offer a state-of-the-art analysis of the study of differentiated integration, from theoretical and practical perspectives. In addition, this book is not a collection of isolated papers: all chapters are interconnected and gravitate towards the aforementioned central questions, but approach these from different perspectives.

This book was published as a special issue of the Journal of European Public Policy.

Differentiated integration in the European Union: a concept, a process, a system or a theory?

Benjamin Leruth

and Christopher Lord

ABSTRACT Differentiation has been a feature of European integration for more than two decades. Nowadays, more than half of European Union (EU) policies are now implemented in different ways. Recent debates over a potential British exit from the EU revived discussions on the future of European integration, offering a potential case for disintegration. Yet scholars and practitioners still find it difficult to define the notion. The introduction to this collection offers a survey of the literature on differentiated integration, its most recent developments and justifies why the study of differentiation needs to move up the research agenda of European integration. It suggests that studying differentiated integration as a concept, a process, a system and a theory is the minimum needed to understand it. Finally, it demonstrates the necessity to study differentiation as a permanent and ‘normal’ feature of European integration.

INTRODUCTION

Ever since the European Union has been studied, scholars have attempted to locate it in the classificatory table of political animals and species. For some the Union may even be a new kind of state (Ferry 2000; Schmidt 2004). For others, it is a non-state political system (Hix 2005). For still others it remains an international organization of a more (Magnette 2005) or less (Moravcsik 1993) original kind.

Whilst, however, these contributions differ on the nature of the beast, they all assume that the Union is just the one beast. Indeed, the beast metaphor began life in the singular when Donald Puchala (1972) famously teased scholars of European integration for confusing the whole with their own narrow research preoccupations in the same way as blind men in a legend mistook an elephant for the ‘hoof, trunk, tail and ear’ they happened to touch. Puchala did not imagine that scholars might need to touch an elephant, a giraffe and a kangaroo to obtain a complete understanding of European integration.

Of course, that was then. The pre-1992 European Community approximated a single institutional order more closely than the post-1992 European Union. Philippe Schmitter (2000: 21) has argued that the latter really amounts to a ‘plurality of different polities at different levels of aggregation’. Sergio Fabbrini (2015) also argues that there are several different European Unions, both in the heads of political actors and in the reality of different authority structures and decision-rules that the Union uses to aggregate policy inputs into policy outcomes. For Fabbrini, the Union includes an economic Union, an intergovernmental Union, and a parliamentary Union; a Community method and a Union method. On top of all that, monetary union forms an institutional subsystem all of its own.

When we dig down from polity to policy, however, European integration is probably even more differentiated, and in ways that pre-date the Treaty on European Union (TEU). Although the early Communities are often associated with a commitment to a uniform acquis communautaire – a single set of policies and obligations that would more or less apply in the same way to all member states at the same time – legal elements of what we now call differentiated integration (DI) were apparent in the Treaty of Rome itself (Hanf 2001). The political idea of differentiated integration finds its roots in a report on the future of European integration written by Belgian Prime Minister Leo Tindemans (1975). The general concept of differentiation appeared for the first time in the primary Community law in 1986, as stated in Article 8c of the Single European Act (now Article 27 of the Treaty on the Functioning of the European Union [TFEU]):

When drawing up its proposals with a view to achieving the objectives set out in Article 7a [now Article 26 TFEU], the Commission shall take into account the extent of the effort that certain economies showing differences in development will have to sustain for the establishment of the internal market and it may propose appropriate provisions. If these provisions take the form of derogations, they must be of a temporary nature and must cause the least possible disturbance to the functioning of the internal market.

Early academic discussions on this new form of regional integration then arose in the late 1970s, with Dahrendorf (1979: 20–1) introducing the notion of Europe à la carte, i.e., ‘common policies where there are common interests without any constraint on those who cannot, at a given point of time, join them’. By the 1980s, Helen Wallace and Adam Ridley (1985) had already distinguished several exotic varieties of differentiated integration in much the same way as scholars do now: directoire; two-speed Europe; two tiers; Europe à la carte; variable geometry; differentiation; abgestüfte integration; subsidiarity; concentric circles; exclusion of the unco-operative and core Community. By 1996, Alexander Stubb (1996) claimed to have identified no fewer than 30 forms of differentiated integration, which he, in turn, classified as creating differences along three dimensions of time, space and policy content.

Nor is the Union only differentiated internally. It is also differentiated in its external actorness and in its boundaries. Whilst scholars of its internal political order have debated how far the Union has characteristics of a state, a political system or an international organization, Jan Zielonka (2007) has asked how far it functions as an ‘empire’ in its immediate neighbourhood? That question might seem odd until it is recalled that empire is extraterritorial rule. Many Union policies and laws plainly do apply extraterritorially. Norway, for example, self-applies 75 per cent of Union law. Moreover, as Sieglinde Gstöhl (2015) expertly demonstrates in this collection, the extraterritorial application of Union policy is itself highly differentiated in the political and institutional relationships it entails between ‘policy-makers’ within the Union and ‘policy-takers’ outside it. If, then, the Union’s external influence is shaped in part by its ability to give outsiders access to its internal policies (Smith 1996: 258), and if it has more than one way of arranging that access, it follows that the Union’s character as an international actor is also differentiated.

So, differentiated integration suffuses the institutions, policies and international actorness of the Union. Yet DI is under-studied in comparison with the huge literature on integration as a whole. Maybe its appeal as a field of study has, until recently, been limited by an assumption that differentiated integration would erode over time? Treaties signed outside the treaties would eventually be brought within them. Intergovernmental pillars and methods would converge on community ones. The formal territorial scope of the Union and the actual territorial application of its policies would eventually be re-aligned by enlargements to all but a few micro-states and hold-outs. Member states would converge on the same policies at different speeds (Stubb 1996), rather than divide permanently into ‘ins’ and ‘outs’.

DIFFERENTIATED INTEGRATION IN PRACTICE

The crisis has changed all this. It is now much harder to assume that differentiated integration may just be ‘noise’ around an underlying trajectory towards more uniform forms of integration. As John Erik Fossum (2015) argues here, the contemporary Union may even combine all three of the following: accelerated integration for some; outright disintegration for others; and greater differentiation in commitments to policies and institutions for all.

Monetary union is, of course, the main example of a policy that appears to be source of ‘ever greater disunion’ between member states. The 18 euro countries have intensified their fiscal co-ordination, agreed a banking union and established shared bail-out funds. They meet in their own Council. They may, in the future, also have their own budget, their own ‘Treasury’, and even their own Parliament (or at least their own section of the European Parliament). Yet, even without these possible sources of further divergence, the ‘new monetary union’ that is emerging from the crisis may already entail somewhat different authority relations to those that govern other Union policies. Those relations are, arguably, more coercive (fines for breaches of fiscal discipline will be automatic in the absence of reverse qualified majorities for forgiveness). They also ‘constitutionalize’ further obligations (the balanced budget rule under the fiscal compact); and collectivize risks in ways that give each of the parts an acute interest in the authority of the whole (Lord 2012: 18–21).

The collectivization of risk deserves a special mention. Sure, the eurozone has (so far) avoided any federalization of debt on a scale that led one historian to describe the early United States as ‘one nation created under debt’ (Wright 2008). Yet, even the more limited mutualization of risk entailed by the bail-out funds may have turned the eurozone into a community of fate, bound together not by any affection, but by the shared risks and costs of getting things wrong. The same goes for the decision to use banking union to centralize some responsibility for supervising the scariest, yet least understood, form of risk economic risk: systemic risks where single follies can bring down whole financial systems.

As a distinctive community of fate with its own distinctive commitments, structures and conversations, monetary union could plainly evolve into a union within the Union based on accelerated integration between its members. Yet, it also shows how the study of differentiated integration may now need to be complemented by the study of differentiated disintegration. The crisis forced commentators to ask what might happen if some member states, such as Greece, left the euro. Some even proposed splitting the euro into two currencies. However, even the survival and reform of the euro may strain the cohesion of the wider Union. In proposing an in–out referendum by the end of 2017 on whether the United Kingdom (UK) should remain a member of the Union, David Cameron highlighted difficulties that the closer integration of the eurozone could present to the UK’s membership of the Union itself.

Yet any British exit would test differentiated integration in new ways. It is not hard to imagine proposals being made for some continued UK involvement wherever the costs of British exit from particular policies are high to either side. Useful, though, those proposals might be as means of coping with the politics and practicalities of disentangling a state from its existing membership of the Union, they would form the substance of a qualitatively different relationship to any in which DI has been used before. The measure of their success would be how fairly and effectively they can govern the relationship between the EU and an entirely new category of ‘ex-member state’. Given, indeed, that they would be the ‘left-overs’ of an existing membership, they would be more a case of differentiated dis-integration, or at best a ‘falling apart’, rather than a ‘coming together’ form of differentiated integration.

In addition, however, to the huge difference between quitting full membership and hitching up selectively to Union policies without becoming a full member, it is unclear how well any of the relationships that presently govern the differential participation of outsiders in Union policies could be made to work for the UK. The UK could follow Norway in seeking assured rights of participation in the single market without membership of the Union itself. That would allow the UK to exit with the fewest implications for market integration. But participation without full membership logically entails participation without full decision-rights. The Norwegian case, sometimes jibed as ‘fax democracy’, illustrates the European Economic Area (EEA) democratic deficit (Eliassen and Sitter 2003). It may make little sense for the UK to exit the EU in the hope of gaining greater autonomy, whilst re-entering the single market with similar obligations but fewer decision-rights. It may be altogether more coherent for the UK to seek neither decision rights nor obligations, and to rely, instead, on no more than its own bargaining strength to negotiate access to Union policies by bilateral treaties. Yet Swiss experience in operating that model shows that it does not ensure ‘real-time’ convergence between single market law (including the European Court of Justice rulings) and the rules that apply in a country seeking to participate in the single market from the outside. This difficulty is particularly acute in the case of financial market regulation, which needs constant updating. Given that is precisely the form of regulation that the UK would most want to continue to co-ordinate with the EU, the UK might need to seek some differential re-integration at an administrative level, rather than through the occasional negotiation of bilateral treaties. Sandra Lavenex’s (2015) contribution to this collection should be read in London.

What, though, if Britain stays in the Union? That too may only increase the importance of differentiated integration. The continued membership of a large member state that is unlikely to join the euro will increase the need for a long-term settlement between monetary union ‘ins’ and ‘outs’. To return to Fabbrini (2015), the Union may need an institutional re-settlement that makes its own character as a union of Unions explicit.

DIFFERENTIATED INTEGRATION AS A FIELD OF STUDY

The idea that differentiated integration amounts to little more than an ephemeral, and even epiphenomenal, process of convergence on similar outcomes at different speeds, seems increasingly questionable. Rather, DI seems to be a permanent, organizational principle of the Union, grounded in a need to manage divisions and disagreements that just do not go away. Thus, the study of DI needs to move up the research agenda of European integration. That, we now suggest, requires attention to differentiated integration as a concept, a theory, a process and a system.

Differentiated integration as a concept

Often used interchangeably with the notion of ‘flexible integration’ (e.g., Kölliker [2001, 2006]; Warleigh [2002]), authors have noted how definitions of differentiated can diverge and even conflict (e.g., Dyson and Sepos [2010]; Kölliker [2001]; Stubb [1996]). Some have suggested more coherence could be gained by studying DI as a whole (e.g., Andersen and Sitter [2006]; de Neve [2007]; Warleigh [2002]), rather than piecemeal. Others have attempted to distinguish different dimensions of DI. Schimmelfennig et al. (2015) propose that DI should be defined in two dimensions: the one representing differences in centralization (vertical differentiation); the other differences in territorial extension (horizontal differentiation). In addition, they make a distinction between internal (i.e., when member states opt out) and external (i.e., when non-member states opt in) horizontal differentiation. A further possibility might be to distinguish the purposes of DI – for example, as a series of ‘strategies’ aimed at ‘reconciling heterogeneity within the Union’ (Stubb 1996: 2) – from DI as a source of difference in the rights and obligations of member states (Kölliker 2001).

Differentiated integration as a theory

Holzinger and Schimelfennig (2012) have described the study of DI as a field of many concepts, few theories and sparse data. Thus, the study of DI has itself moved at different speeds. Yet ensuring that the theory catches up with the conceptualization poses more than one challenge of theory building.

First, DI can be both explanandum and explanans. It is not ju...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Table of Contents
• Citation Information
• Introducing the new Research Agenda Section editor and Debate Section
• 1. Differentiated integration in the European Union: a concept, a process, a system or a theory?
• 2. The European Union as a system of differentiated integration: interdependence, politicization and differentiation
• 3. Utopia or dystopia? Towards a normative analysis of differentiated integration
• 4. Democracy and differentiation in Europe
• 5. Operationalizing national preferences on Europe and differentiated integration
• 6. The external face of differentiated integration: third country participation in EU sectoral bodies
• 7. Models of external differentiation in the EU’s neighbourhood: an expanding economic community?
• 8. Differentiated integration in the European Union: towards a comparative regionalism perspective
• Index