Conditionality and the Ambitions of Governance

Social Transformation in Southeastern Europe

Joel T. Shelton

• Publisher: Palgrave Macmillan
• Year: 2014
• ISBN:
  9781137441607
• Topic: Politics & International Relations
• Subtopic: Trade & Tariffs
• Index: Politics & International Relations

Shelton investigates the conditionality regime directed at 'transforming societies' inside EU candidate states. He offers a new understanding of conditionality that incorporates the social and subjective dimensions of the 'European project', locating the ambitions and limits of conditionality in the ideas of political economy.

1

Introduction: Conditionality in Crisis?

1.1 From crisis to conditionality

As late as 2013, Europe was said to be in crisis. The future of the euro was in doubt, threatened by bank bailouts and sovereign debt. Recession rocked the continent, helped along by austerity measures that generated social unrest, and newspapers declared the future of the European Union (EU) itself to be imperiled. Coverage of such disorder in European affairs suggested that the period since late 2009 – when the Greek government first announced the state had been grossly underreporting its budget deficit – had been something of an aberration; a formerly harmonious Europe had been ripped asunder by bad assets, overleveraged banks, public bailouts, and profligate spending. Yet from another vantage point, crisis – and anxious anticipation of the next crisis – has been the very stuff of European Union. Crisis re-made the idea of ‘Europe’, and it is fear of crisis – particularly anxieties about the political, economic, and social cohesion of the continent following the collapse of communist states in the east – that has rationalized the functional and geographic expansion of the Union. Crisis propels the ‘European project’ haphazardly forward. Disharmony is an invitation to governance.

It is easy to forget that contemporary Europe was forged in and through periods of violence and uncertainty. The event often identified with the institutional birth of the new ‘Europe’ – the creation of the European Coal and Steel Community in 1951 – emerged out of the destruction wrought by World War II and the early divisions of the Cold War, aiming to make another European war both unthinkable and materially impossible. Rather than destroying Europe, disharmony was the catalyst of its re-creation. For war to be unthinkable, union had to become thinkable, and from the beginning, anxieties about the possibility of achieving lasting economic recovery, political stability, and social cohesion on the continent were attached to a set of political and economic ideas that offered a programmatic fix: First published in 1958, Ernest Haas’s The Uniting of Europe (2004) offered a neofunctionalist rationale for ever-increasing integration in the name of rationalism and self-interest, suggesting that the logic of ‘spillover’ would undermine the basis of conflict and further institutionalize economic and political harmonization across the continent. Decades later, apprehensions of a dangerous and unconsolidated periphery emerging from the collapse of communism in Eastern Europe were attached to ideas about the stabilizing benefits of open trade, market integration, legal and regulatory standardization, and security cooperation, thereby rationalizing further efforts at bureaucratic harmonization through an increasingly complex accession process. This process resulted in an unprecedented territorial expansion of the Union. Croatia’s accession to EU membership on July 1, 2013, was preceded by Bulgaria and Romania in 2007, which followed the accession of eight central and eastern European countries (along with Cyprus and Malta) in 2004. In the decade from 2004 to 2013, ‘Europe’ expanded from 15 to 28 member states.

At the center of the EU’s vision of a cohesive Europe is a contemporary technique of political-economic governance known as conditionality. In the context of ‘Europeanization’, conditionality is typically defined as a set of rules or norms of conduct to be adopted by a state seeking EU membership (the institutionalist approach) or as a set of material incentives that serves to adjust the cost-benefit calculations of states in the bargaining and negotiation process that precedes accession, thereby inducing the adoption of EU rules and standards (the rationalist approach). The argument of this book is that conditionality is not a thing (incentives, rules, or norms) but a dynamic process – a cycle of governmental activities that is frequently reviewed, remodulated, and intensified. As the EU works to further incorporate the states of Southeastern Europe,¹ conditionality in its latest phase is driven by a particular set of anxieties derived from a distinct political-economic rationale – one far more ambitious than that which first created a common market out of distinct national economies. While the early union aimed to lower trade barriers and standardize institutional rules and practices, the so-called ‘European project’ today is self-consciously and intricately directed at ‘transforming societies’ (Commission 2012a: 2).

Despite being integral to International Monetary Fund bailouts and World Bank development lending and frequently cited in strategic EU documents and literature on European Union enlargement, the ambitions and limits of conditionality as a technique of governance remain little understood. Yet it is precisely this technique that is tasked with making an ever-larger Europe better able to withstand the social and economic disharmonies revealed by the recent crisis. According to the European Commission, ‘the challenges facing the Eurozone underline the importance of further consolidating economic and financial stability and fostering reforms and growth, also in the enlargement [candidate] countries ... Strengthening the enlargement countries’ resilience to crisis is a matter of joint interest. The enlargement process is a powerful tool to that end’ (Commission 2012a: 2–3). The Commission’s 2012–2013 Enlargement Strategy outlines the considerable ambitions of this process:

Within a framework of strict but fair conditionality, the prospect of accession drives political and economic reforms, transforming societies and creating new opportunities for citizens and business. At the same time, enlargement reinforces the Union’s political and economic strengths. By exercising leadership through its enlargement policy, the EU can reap the benefits of a stronger and more united continent, also demonstrating its continued capacity as a global actor. (Commission 2012a: 2, emphasis added)

This capacity remains always in question. As the euro crisis unfolded from late 2009 and the disharmonies among EU member states became evermore visible, the Commission argued for intensifying the application of conditionality in candidate states – ‘using conditionalities in a more strict and systematic way at country, sector strategy and project level’ (Commission 2011c: 5). The aim is a continuous re-ordering of the political economy of Europe, in keeping with a particular knowledge of what must be reformed. According to the Commission’s 2012 Enlargement Strategy, these ‘reforms need to be deeply entrenched, with the aim of irreversibility’ (2012a: 3). Given the emergence of conditionality internationally as the go-to technique of ‘global governance’ – directed at transforming politics, economy, and society within states in need of credit, capital, market access, and technical assistance – this book sets out to understand conditionality as a technique informed by particular political-economic ideas and put into practice through the bureaucratic activities of agents in a variety of institutional contexts. Conditionality as a governmental practice faces considerable limits derived not only from the workings of the technique, but from the extent and ultimately political character of the ambitions reflected in its practices.

These ambitions exceed the shaping of incentives and the reform of institutional rules, and they reach well beyond the boundaries of Europe. While this study is predominantly concerned with conditionality as practiced in European Union enlargement, rethinking the political economy of conditionality can contribute to understanding the politics of development and financial assistance around the world, where attempts at neoliberal ‘social engineering’ have extended the ambitions of conditionality across the continent of Africa and beyond (Harrison 2010). This suggests that conditionality is not only universal in its ambitions, but also highly mobile in its application and operations.

1.2 A brief history of European Union conditionality

Conditionality in Europe was not always linked to EU membership, nor was the operation of conditionality in practice much concerned with the transformation of societies. European Union conditionality in Central, Eastern, and Southeastern Europe began as an instrument directed at economic liberalization. Prior to 1994, EU conditionality in the region was centered on economic transformation driven by the end of the Cold War – the Phare program established in 1989 provided direct grants to fund technical assistance in the states of Central and Eastern Europe; the program functioned to ‘channel advice’ in the direction of a neoliberal economic agenda (Grabbe 2006: 8). Formally structured trade relations between the EU and the states of Central and Eastern Europe were codified in Europe Agreements, which ‘were intended to create a free trade area and to implement the four freedoms of the single market (free movement of goods, services, capital, and labour)’ (Grabbe 2006: 9). In supporting a broad project of liberalization, the Europe Agreements ‘made specific policy demands’ and ‘started the process of introducing the EU’s legislation and policies to the applicants’. After 1992, these agreements were linked to a number of conditions, including ‘human rights, a multi-party system, free and fair elections, and a market economy’. While violation of these conditions invited the possibility of agreement suspension, this has not occurred in practice (Grabbe 2006: 9). Conditionality in Central and Eastern Europe was first concerned with economic integration rather than the promise of accession, and the language of this conditionality was at best broad and open to interpretation, and at worst exceedingly vague.

Conditionality requirements specifically oriented to EU accession and membership requirements changed significantly between 1993 and 1998. Previous enlargement rounds in the European Economic Community (EEC) and later the European Community (EC) had included Western European democracies that were said to already substantively conform to the political-economic ‘norms’ embraced by the EEC/EC – namely ‘the view that constitutional democracy was not possible without a functioning market economy, that indeed the latter formed the essential basis of the former’ (Pridham 2005: 39). However, the addition of Greece in 1981 and Portugal and Spain in 1986 brought the question of the effectiveness and enforcement of accession requirements to the fore; even relatively loose political standards of membership (centered on a requirement for ‘democratic government’ and respect for ‘fundamental rights and freedoms’) formulated in the European Parliament in the 1960s seemed subject to negotiation and derogation (Pridham 2005: 30–34). During this period ‘factors which could be called high politics intervened in determining when and how political requirements could be applied and even waived’ (Pridham 2005: 34). Additionally, none of these earlier membership requirements were ‘subject to any formal and regular monitoring’. Conditionality prior to 1993 was therefore ‘marked by a distinct lack of procedure and its operation by ad hoc approaches’ (Pridham 2005: 35). The ‘evolution’ of conditionality since the early 1990s has not followed a fixed path – the ‘definition of political conditions since the Copenhagen summit of 1993 has at best been incremental, at times ad hoc and is essentially bureaucratic’ (Pridham 2005: 41).

Pridham (2005: 40–41) situates the beginnings of a binding regime of EU membership conditionality with the advent of the ‘Copenhagen Criteria’, the designation given to a set of requirements for EU membership set at the Copenhagen European Council in 1993. As noted above, some general standards for EU membership – democracy, rule of law, and respect for human rights – had been loosely established beginning in the 1960s, but the requirements outlined at Copenhagen were broader, more explicit, and subsequently elaborated such that they became subject to monitoring and enforcement. At Copenhagen, the Council for the first time explicitly outlined the requirements for EU membership (Pridham 2005: 36).

Copenhagen can therefore be read as a kind of strategic framework for political-economic harmonization – a way of making explicit the conditions of EU membership so that they might be put into practice. The criteria for candidate states as set out in 1993 are as follows: (1) Member states must be organized along democratic principles, govern through the rule of law, ensure the protection of human rights, and provide for the protection of minorities. (2) Member states must possess a functioning market economy with the ability to withstand the competitive market pressures of membership. (3) Member states must have the capacity to take on the obligations of membership. This last requirement signified that candidate states wishing to enter the EU must adopt the acquis communautaire as well as the entire evolving set of EU rules and standards codified across a variety of treaty instruments. The obligation to adopt the entire acquis – including an increasingly elaborate set of benchmarks and standards in employment, social policy, and education and training (Chapters 19 and 26 of the acquis) – represents the EU’s gradual move into social and subjective domains of political-economic life that have traditionally been jealously guarded prerogatives of nation-states.

The ‘qualitative jump’ (Pridham 2005: 36) in conditionality coincided with the fall of state-dominated communist regimes in Central and Eastern Europe. In this reading, the Copenhagen Criteria emerged as an institutional response by member states and the EC/EU to the desire of liberal reformers in the ‘newly independent’ (that is, post-communist) states of Eastern Europe to pursue Union association or membership; the politics of reform was aligned with ‘security concerns’ expressed by member states faced with a number of new or ‘emerging’ democracies and unconsolidated market economies in Central and Eastern Europe (Pridham 2005: 37; Grabbe 2006: 10). According to Heather Grabbe, one aim of conditionality ‘was to reassure EU states that the eastern candidates would look like familiar, West European countries, not bringing instability, authoritarianism or economic collapse into the Union’ (2006: 37). Copenhagen emerged through the multiplication and tightening of internal EU institutional procedures and the work of a more activist Commission (Pridham 2005: 36) that deployed an economic and security discourse centered on the threats and potentials of unconsolidated political and economic spaces along the EU’s external borders. The expansion of the EU’s bureaucratic structure coincided with a new set of anxieties about the potential sources of disorder in a European periphery that was not yet properly ‘European’. A similar problematic of enlargement emerged in Southeastern Europe following the eruption of civil war in the republics of the former Yugoslavia.

While the Copenhagen Criteria indeed outlined more explicit requirements for EU membership than previous references to democracy, the rule of law, and human rights, as a strategic framework for conditionality the conditions outlined at Copenhagen are a ‘moving target’ and contain ‘highly debatable and slippery concepts’ (Grabbe 2006: 32) like ‘democracy’ and ‘market economy’; even the definition of the acquis shifts and is ‘subject to minimalist and maximalist interpretations’ (Grabbe 2006: 34). Given these indeterminacies, the requirements outlined at Copenhagen have been elaborated upon in subsequent Council rounds and by the European Commission. Most importantly, the Commission has assumed the responsibility for ensuring compliance with the criteria, ‘shaping these conditions and defining the requirements in detail’ (Grabbe 2006: 14). In doing so, the Commission has designed a number of progressively more elaborate instruments of conditionality. Among the most important of these instruments are: Prioritization – the identification of problematic dimensions of political-economic life to be transformed; Programming – the design, financing, and implementation of interventions to transform these dimensions; and Evaluation – monitoring and assessment of the success or failure of these programs according to pre-established benchmarks and the adjustment of programming on the basis of this surveillance.

Copenhagen was followed by the launch of a ‘pre-accession strategy’ in 1994 that sought to ‘incorporate earlier agreements and commitments ... and added some new elements’, elaborating specific accession requirements but ‘in a selective fashion’ concerned mainly with ‘liberalization and regulatory harmonization’. Further, the pre-accession strategy introduced ‘the principle of phased adoption of EU rules’ rather than regarding the acquis as unitary and ‘indivisible’ (Grabbe 2006: 11). In 1997, the Commission issued the first official Opinions on membership applications, assessing applicants’ progress toward meeting the Copenhagen requirements and the terms of the pre-accession strategy (Grabbe 2006: 13). The following year, the Commission began issuing the first annual Progress Reports on candidate states, outlining yearly advances toward meeting the accession requirements, noting areas of concern, and making recommendations for further action. All of this made the requirements at Copenhagen ‘progressively more explicit and specific’ (Grabbe 2006: 14).

Beginning in 1998, the EU began setting out European/Accession Partnerships. Unilaterally issued by the Council and managed by the Commission, the Partnerships ‘were intended to make conditionality stricter, both on financial assistance through Phare² and ultimately on accession itself, by uniting all EU demands and assistance for meeting them in a single framework’ (Grabbe 2006: 15). According to Grabbe (2006: 16), the Accession Partnerships ‘changed the scope of the accession conditionality’, covering ‘a huge range of policy areas’, ‘uniting all the EU’s demands, covering not only all the EU’s legislation (as defined by the Commission), but also the other political and economic conditions’. The Partnerships were paired with National Programmes for Adoption of the Acquis issued by candidate states that ‘set timetables for achieving the priorities’ (2006: 15).

In Southeastern Europe, a Stabilisation and Association process was introduced in 2000 that ‘opened up the prospect for EU membership for all the countries of the region’ (Bartlett 2008: 200). As a precursor to accession, Stabilisation and Association Agreements (SAAs) ‘provided for asymmetric trade liberalization with the EU, economic and financial assistance, political dialogue, approximation with EU legislation and cooperation in other policy areas’ (Bartlett 2008: 200). SAA negotiations depended upon adherence to general conditions ‘open to subjective interpretations’, including implementation of economic reforms, establishment of democratic institutions and the rule of law, free elections, and respect for human and minority rights (Bartlett 2008: 201). The European/Accession Partnership model (paired with National Programmes) has persisted following the 2004 and 2007 enlargements, with the first Partnerships issued for Southeastern Europe in 2004. Importantly, financial assistance from Phare and other aid programs was consolidated during this period and integrated into a uniform Instrument for Pre-Accession Assistance (IPA).

The latest incarnation of the ‘checklist approach’ (Pridham 2005: 41) adopted by the Commission is visible at present in the conditionality regime at work in current candidate states; recent applicants for membership ‘have und...

Table of contents

• Cover
• Title
• 1 Introduction: Conditionality in Crisis?
• Part I Political Economy and Conditionality
• Part II Conditionality as Technique of Governance
• Notes
• Bibliography
• Index