Regional Integration EU
An investigating analysis of EU enlargement policy
Name
CPR
Douglas von Euler
Angelica Norhagen
Sofie Oestergaard Boa
Nikolaj Lildal
Jasper Siegfried
CPR051090-3471
CPR111290-5045
CPR
CPR190890-1513
CPR311089-3085
1
Table of Contents
1.0 Introduction................................................................................................................................... 3
2.1 The Eastern Enlargement ..................................................................................................................... 3
2.2 Croatia and the EU................................................................................................................................. 3
3.0 Liberal Intergovernmentalism (LI) ......................................................................................... 4
3.1 Definition .................................................................................................................................................. 4
3.2 Liberal Intergovernmentalism and CEEC ....................................................................................... 4
3.3 LI and Croatian integration ................................................................................................................. 6
3.4 LI Critique................................................................................................................................................ 7
4.0 Social Constructivism (SC) ........................................................................................................ 8
4.1 Definition .................................................................................................................................................. 8
4.2 Social Constructivism CEEC and Croatia (SC) .............................................................................. 8
5.0 Conclusion...................................................................................................................................... 9
2
1.0 Introduction
Parallel with the European Community’s rapid development and enlargement during
the past decades scholars’ interest to explain Europe’s integration has increased dramatically.
In 1993 Andrew Moravcsik presented the rational theory Liberal Intergovernmentalism (LI).
The theory received major attention by scholars around the world. The most recent
enlargement to the CEEC´s in 2004/2007 and the current accession of Croatia has however
fueled the debate about how to accurately explain the enlargements. The core research
question of this paper is: Is European Integration explainable through only Liberal
Intergovernmentalism and is integration dominated by economic interest? In order to answer
the question, we will examine the two enlargements from a LI perspective and herewith
investigate existing economic and business benefits. We will also examine LI’s counter
theory SC in order to verify our hypothesis that LI is not sufficient enough to explain the
recent integration by itself; it is necessary to study integration from a social constructive
approach as well.
This paper is structured in three parts. The first section will place the Eastern
Enlargement (EE) and the current accession process with Croatia in a historical context. The
second section examines the two cases from a Liberal Intergovernmental approach. The
theory will be defined, applied to the two cases and further what business opportunities the
enlargements open will be presented. The third section highlights the critique raised against
the liberal intergovernmental approach and then examines the two cases from a social
constructive approach. The last section will conclude our findings.
2.0 Historical Context
2.1 The Eastern Enlargement
The fall of the iron curtain in 1989 increased the number of states in Europe
dramatically, resulting in that The European Council decided at the Copenhagen summit in
1993 to enlarge the European Union eastwards. At the same summit the EU member states
(MS) agreed that the Copenhagen criteria should lay the ground for future enlargements. In
1995 and 1996 the first Eastern European states applied for EU membership. After
negotiation and national amendments the first eight states became members in 2004. This was
hitherto the largest enlargement in terms of number of countries, population and landmass.
Romania and Bulgaria followed in 2007. To become members the new MS had to accept the
Copenhagen criteria and agree to some restrictions regarding working rights lasting up to
seven years.1
2.2 Croatia and the EU
After Croatia’s independence and international recognition in 1992, the interactions
between Croatia and the EU gradually increased. In 2001, Croatia signed the first formal
agreement with the EU; the Stabilization and Accession Agreement. In this time period the
EU gradually increased trade privileges. In March 2003 Croatia applied for EU membership
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I. Bach, S. George and S. Bumler 2011
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and in June Croatia was granted candidate status by the European Council. 2 Almost one year
later, the Commission recommended opening negotiations with Croatia and the date for
accession negotiation was set to March 2005, on the condition of evidence of full cooperation
with the International Criminal Tribunal for former Yugoslavia (ICTY).3 The negotiation was
eventually postponed due to lack of evidence showing Croatia’s full cooperation in finding
former general Ante Gotovina; responsible for war crimes committed in relation to Croatia retaking control of the ‘Krajina’ region in 1995. In October 2005, ICTY declared the
cooperation between Croatia and ICTY acceptable and the negotiation process began 4. The
negotiations of membership and the required amendments are still in progress.5
3.0 Liberal Intergovernmentalism (LI)
3.1 Definition
Liberal intergovernmentalism started as a critique of the preceding theory of EU
integration, neo-functionalism. Scholar Andrew Moravcsik, founder of LI, divided the theory
into a three-step process. The first step is the domestic preference formation, which states that
the interest of national governments is formed by domestic political and social pressure but
mainly motivated by economic benefits. The second step is interstate bargaining, which
argues that the outcome of negotiations within the EU will always reflect the relative MS
bargaining power. Finally, Moravcsik stresses the state’s role in an enlargement and claims
that it has full control over the integration process. Integration is a sum of rational choices
made by intergovernmental decisions rather than supranational negotiations. Hence
supranational institutions are not sovereign and major decisions within the EU will always
reflect the interests of all national governments. 6
3.2 Liberal Intergovernmentalism and CEEC
According to the Domestic Preference Formation, the EE can be interpreted as the
outcome of the domestic pressure in the concerned states and their rational cost-benefit
calculations of economic consequences. After the fall of communist rule, the domestic interest
to democratize and adapt the western European and American values created domestic
pressure for integration. There was a natural interest among the CEECs to become
independent from Russia.7 Furthermore, the economic aspects of the enlargement gave the
CEECs integration in the EU market – access to the internal market, providing new many new
business opportunities for both export and import and also creating incentives for FDI. The
relevance of new business opportunities in the enlargement can also be seen among the
existing MS. During the negotiation process of the EE the MS were divided up into two
groups; the drivers that promoted an EE, and the brakemen who were reluctant to the
expansion. The geographical position of the MS reflected the drivers, consisting of the
countries bordering the CEEC, plus Britain. An EE would benefit the bordering countries
2
I. Bach, S. George and S. Bumler 2011
European Commision 2005
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European Commosion 2005
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Nives Miosˇic´-Lisjak 2006
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Schimmelfennig and Moravcsik 2004
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Sadurski 2004
3
4
through increased cross-border trade and capital movements. It was now easier for businesses
to expand to the east and increase the global trade. Britain had neither short-term economic
nor geographical benefits from an EE but feared the return of communism. The bordering
countries were Austria, Germany and Finland, all three with high shares in exports to the
applying countries. Even though some MS benefited from the EE with regards to trade, the
enlargement had many implications for other MS. First, the EE was particularly costly for the
less developed MS in the short run as the eastern countries were specialized in the same
resource intensive industries as textile and agriculture.8 The EE meant increased competition
for these countries. Furthermore, the EE was costly for the EU in the short run, as their
transfers to the CEEC countries by far outweighed their contribution to the Community
budget. The expected consequences on distribution of CAP, constituting 80 % of the
Community budget, lead to a reform in structural policies. This reform resulted in a reduction
of EU transfers and financial support to farmers mainly affecting Spain, Greece, Portugal and
Ireland, all core brakemen to the enlargement and main receivers of agricultural support.9
Presumably, the future benefits from the enlargement were taken into account. Even though
the eastern countries contributed relatively little to the overall EU budget when entering, the
EU saw future economic potential and business opportunities in the developing postcommunist economies.10 Further, one of the main interests of the MS was also to quickly help
the former USSR countries to get both politically and economically independent from Russia,
to make sure further conflicts in the region wouldn’t occur. This would in turn create a more
stable Europe11.
The second step of LI is Interstate Bargaining, where Moravcsik suggests that the
outcome of negotiation is the result of states bargaining power. When the existing MS
required the applicants to fulfill the Copenhagen criteria12 and comply with several
unfavorable terms they had disadvantages in negotiations, since they contributed little
economically. Membership in the EU meant institutional and structural changes outlined by
the Copenhagen criteria for the applicants. The EU could dictate the terms of the enlargement
because the candidates had more interest in joining than the Union had in enlarging. The
economic benefits of the enlargement were much higher for the CEECs then for the EU,
which gave them a less beneficial position in their negotiation and conclusively lead to them
accepting the criteria from the EU relatively quickly.
The third step of Moravcsik’s theory is Supranational Institutions were he argues
that the preferences of the national governments determine further enlargement – not the ones
of supranational organizations. In the case of the EE the delegation of power from the nation
to a supranational organization (EU) is illustrated by the Copenhagen criteria and the power
of supranational institutions e.g. the Commission; working for the benefits of EU and not the
individual MS. LI explains the delegation of decision-making to the EU as a wish of the
governments to guarantee that all parties involved follows the agreements made. 13
8
Schimmelfennig and Sedelmeier 2005
EUROPA - Web Page
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Baldwin 1995
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Baldwin 1995
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3.3 LI and Croatian integration
Due to Moravcsik’s LI approach economic interests dominate domestic preference
formation. One of the main economic reasons of the previous EE was to aid the former
USSR countries in their economic development in order to create a strong independence from
Russia.14 Even though Russia might not be a large threat in terms of Croatia, the interest in
aiding the economic growth and creating business opportunities in Croatia is compelling. A
stable Balkan region creates a more stable Europe and a more attractive place for foreign and
European companies to invest in. This opens up new business opportunities for the region,
which lead to further economic growth15. The increased political and economic stability
resulting in economic growth after becoming members can be seen in the countries of the EE.
Like the EE, Croatia’s integration is in particular interesting for the countries with close trade
relations with the Balkan region; they will benefit economically from the membership and
hoping to enhance the integration of the Balkan region.16 As suggested by the LI approach,
countries with greater economic benefits will have a larger interest in initiating an
enlargement than countries without. After Croatia’s recognition in 1992, the EU invested
large sums in order to speed up the reconstruction and stabilization process in the region. The
EU is interested in Croatia obtaining full membership and uses them as a “filter” for illegal
immigrants, human trafficking, narcotics etc. from the Balkan region, which currently is a
critical issue. This also leads to a more stable region and subsequently faster economic
growth. The opportunity loss of not being a part of the EU and the internal market could have
severe economic consequences17.
The second step of LI, Interstate Bargaining, states that all countries can make their
own cost-benefit analysis and they all have the right to make their own decisions in the
negotiations. However, scholars have raised concerns if this actually is the case for Croatia, as
they have to follow the conditions of the Copenhagen criteria in their integration. LI explains
this by Croatia’s lack of leverage in the negotiation. Croatia is not able to add much to EU’s
cost-benefit analysis. The macro economic benefits of Croatian membership are small to the
EU as a whole, in contrast to many of the early EU enlargements where the applicants had a
more influential position in their negotiations than Croatia.18
The third step of LI, Supranational Institutions, further argues that all individual
states have full control over the course of European integration and that international
institutions have a minor part in international bargaining. In the Croatian case, as in the EE,
the nations´ delegate power to the international institutions to ensure that the states follow
agreements.
14
Baldwin 1995
Ashbrook 2010
Nives Miosˇic´-Lisjak 2006
17
Nives Miosˇic´-Lisjak 2006
18
Nives Miosˇic´-Lisjak 2006
15
16
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3.4 LI Critique
The LI approach explains various parts of the integration, in particular for the
countries directly affected by a more developed region, but the theory has received a lot of
critique from several scholars who believe that there are several flaws to the theory. They
instead argue that a SC approach is more accurate. There are economic benefits to the
enlargement but many are hard to predict and become relatively speculative in the long run, as
they are determined by how the region stabilizes and how investors respond to the
development. The cost-benefit analysis is therefore highly uncertain for the MS. The critique
suggests that integration is not purely based on an economic cost benefit analysis.
Nives Miosˇic´-Lisjak argues that the idea of countries having full control over the
course European integration was something that could have been applied for the first MS in
the beginning of the European community, but not to the same degree in the case of the EE or
Croatia in the current EU.19 Thomas Risse explained it through his metaphor: “The EU looks
more like an exclusive club dictating the terms of accession to new members”.20 This critique
has been demonstrated through the avis Croatia received when applying for membership.
Germany and France were in favor of an immediate start to negotiations with Croatia while
Britain and the Netherlands were concerned about Croatia’s participation in aiding ICTY, and
therefore argued for a delay in negotiations. The same was seen in the EE, when the existing
MS, leaving little control of the negotiation left for the eastern countries, set the terms of
membership. Also the requirements and demands of the Copenhagen Criteria set by the MS
and negotiated by the EU as one united actor leaves little or no room for Croatia to influence
their integration. This means that neither the individual MSs nor Croatia and the eastern
countries are in full control of the integration, arguably undermining the LI approach
suggesting that all countries have control over the course of the integration.
LI further argues that state’s actions are based on domestic social and political
pressure. Croatia’s lack of influence in the integration process has lead to an increasing
euroscepticism within its population. This demonstrates why Croatia acts, to some extent, in
other interests than its own. As mentioned earlier Croatia’s accession negotiation depended on
their cooperation with ICTY in capturing Ante Gotovina. John E. Ashbroke provides evidence
that indicates that Croatia’s participation in finding Gotovina was not at all appreciated or
condoned by the domestic public opinion. Gotovina is to a large extent seen as a national hero
in Croatia, both among the population and by many prominent politicians.21 This clash of
interests, with the Croatian government wanting to meet the conditions of the EU on one hand
and the national hero status of Gotovina on the other has lead to an increasing euroscepticism
among the population. Despite this, Croatia still participated to the best of their abilities in
their work with ICTY. It was seen as necessary in order to begin negotiations.
Nives Miosˇic´-Lisjak 2006
Thomas Risse 2009
21
Nives Miosˇic´-Lisjak 2006
19
20
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4.0 Social Constructivism (SC)
4.1 Definition
Social Constructivism emerged in the late 1990´s as a critique to the overall
rationalist approach; instead of a materialistic focus it emphasizes the role of cultures, norms
and values, and how these shape their respective social environments. SC suggests that shared
rules and values connect the members of a group; hence the common identity of EU is the
main reason for the EU’s further enlargement. Political actors of the European integration
internalize social norms that further shape the European identity and thus the Union’s
interests. In consequence, the “European identity” is not seen as static; it changes over time,
as norms and values (stemming from new actors) also change.
4.2 Social Constructivism CEEC and Croatia (SC)
Scholar Frank Schimmelfennig argues that the LI cannot by itself explain the EU’s decision to
enlarge to the east22. Instead he argues that it was the EU’s collective identity, together with
the sense of social responsibility towards the east that resulted in the EE. There were certain
norms and values deeply embedded in the EU identity that played a significant role in the
EU’s policy towards the EE. Most common was the importance of the liberal democratic
structure in both the economic and political markets. J. Richardson further argues that the EU
enlarges to include states that share their values of liberal democratic norms inside the
geographical area of Europe.23 The EU felt a responsibility to maintain the commitment made
in the Maastricht Treaty stating that any European state with the same values and norms and
built upon a democratic structure are welcome to apply for membership.24 The fall of
communism in 1989 resulted in a massive political change in the former communist countries.
As a result of independency, the eastern governments expressed a desire to “return to
Europe”25 – rejecting the ideas of communism, and instead identifying themselves with the
norms and values dominating the EU. The Copenhagen criteria (1993) were laid down as
guidelines for the eastern European applicants to reform the eastern block and “fit in” to the
common identity of the EU. Once fulfilling the criteria, the countries were welcome to
become members. SC is reflected by the Copenhagen criteria, stating that the EU integration
is deeply dependent on the collective European identity and how well applicant states share
the common values within the EU. As discussed earlier, not all MS encouraged the EE at the
initial negotiations. SC explains the different approaches that existed by saying that all
members of the EU share certain values, whilst others are not commonly held; some values
have become more of a characteristic of the group collectively. The EE can be seen as a result
of the EU’s self-image as a stabilizer26. In the previous enlargements of Greece, Portugal and
Spain, the EU took on a role as a supporter and consolidator in democratic and liberal
economic reforms. In the long run it was the responsibility towards the CEECs that made the
group of brakemen (France, Greece, Spain etc.) support the enlargement.
22
Schimmelfennig 2005
Richardson 2006
Nives Miosˇic´-Lisjak 2006, Treaty of the European Union Artikel 6 & 49
25
Richardson 2006
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24
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Applying the SC theory on the possible enlargement of Croatia, there are many similarities.
As mentioned above economic benefits for the EU are nearly non-existent in the short run.
Instead the EU is seeking to enlarge because Croatia, as also the rest of the Balkan states, is
both geographically and culturally part of Europe. The EE even enhanced this already existing
feeling of isolation. Mesic´, the President of Croatia, said:
Croatia is a country whose history reaches far back into the past of Europe, a country
that has always been and has never stopped being a part of the European countryside
. . . We do not want to live isolated. We have given our contribution to Europe
innumerable times in the past. We want and are capable to do the same in the future
as well. . . . We expect Europe to recognize us and accept us as its inseparable part.
(Mesic´, 2003)
5.0 Conclusion
EU integration in the earliest enlargements was mainly motivated by economic
benefits. In the early enlargements the applying states, as in the first enlargement towards
Britain, Ireland and Denmark27, also contributed to the cost-benefit of EU, giving applicants
bargaining power in negotiations and hence able to affect the direction of negotiations. In the
case of the EE and current accession of Croatia, the enlargements has created (will potentially
create) many business opportunities and economical benefits especially for the regions but as
well for the EU as a whole. A more stable Eastern Europe and Balkan region means a more
stable Europe, which in turn leads to faster economic growth. Their accession to the internal
market opens up the possibility for imports and exports from foreign international
corporations. Although economic benefits and business opportunities are numerous for both
EU and the candidate states, it is still impossible to overlook the shift towards SC. The
Copenhagen Criteria is a strong example as it includes many criteria about norms and values.
The period following the fall of communism saw an increased focus on shared norms and
values and the creation of a common European identity. Hence integration needs to be viewed
from a social constructive approach as well. Therefore our main hypothesis that LI and
economic factors can’t efficiently explain enlargements is verified and that existing EU
enlargement policy must be explained by a combination of Moravcik’s LI and the critical
perspective of social constructivism, emphasizing the role of common values and norms.
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