INTRODUCTION
The EU is highly dependent on regulation as an instrument to achieve its objective of market integration through market liberalisation and for the delivery of an inclusive social agenda.
Governance in the EU is highly fragmented and the recognition of this in recent years has paved the way for a reconceptualisation both of methods and instruments for governing.
Innovation in regulation was triggered by the Single Market Program and the liberalisation agenda that underpinned it while new forms of governance – in particular that identified with the open method have emerged as a result of the Lisbon process.
Competition and competitiveness the latter implying a more dirigiste industrial policy than that of competition – underpin both these innovations. The potential tension between competition and competitiveness also reflects the search for a balance between structural reform – which goes to the heart of the Lisbon agenda – and what can loosely be described as ‘social Europe’.
The aim of this conference is to bring together the two themes of regulation and governance in order to explore the challenges and dynamics they pose for regulatory reform in the fields of free movement of services, market liberalisation and regulation.
FORUM SCHEDULE
9.00 - 9.20 /Registration
9.20 – 9.30 / Welcome9.30 - 11.00 / SESSION I: EU Governance and Regulation
Speakers: / Prof Colin Scott, University College Dublin
Newish Governance and the Legitimacy of the EU
Prof Deirdre Curtin, University of Utrecht
Framing Accountability of EU Administrative Actors
Discussant: / Prof Imelda Maher, University College Dublin
Chair: / Mr Dan Mulhall, Department of Foreign Affairs
11.00 - 11.30 /
Tea and Coffee
11.30 - 13.00 /SESSION II: Social Europe and the Market
Speakers: / Prof Tamara Hervey, University of SheffieldHealth Care Services in Internal Market Law: An Opportunity for a ‘Transformative Directive”
Dr Gavin Barrett, University College Dublin
Bargaining in the Shadow of What? Reflections on Governance in the Field of Community Employment Law
Discussant: / Prof Kenneth Armstrong, Queen Mary University of London
Chair: / Mr Patrick McGovern, Partner, Arthur Cox
13.00 - 14.30 /
Lunch
14.30 - 16.30 / SESSION III: Financial MarketsSpeakers: / Prof Niamh Moloney, University of Nottingham
Law Making and Policy Formation for the EC Financial Market in the Post- FSAP Environment
Prof Blanaid Clarke, University College Dublin
Takeovers Regulation
Prof Simon Deakin, University of Cambridge
Reflexive Governance and the European Corporation
Discussants: / Prof Julia Black, London School of Economics
Prof Peer Zumbansen, Osgoode Hall Law School
Chair: / Mr Dermot Gleeson, SC
16.30 / Closing Remarks and Reception
ABSTRACTS
SESSION I: EU GOVERNANCE AND REGULATION
New-ish Governance and the Legitimacy of the EU
Professor Colin Scott
The term ‘new governance’ is often used to refer to governing mechanisms within the European Union, which deviate from the classic ‘Community Method’, discussed by the European Commission in its 2001 White Paper on EU Governance. This deviance has a number of aspects. First it draws in a wider array of actors, both national governmental actors, but also non-governmental actors, including business groups, trade unions and other civil society organisations. Secondly the new governance mechanisms frequently deviate from the ‘rule by law’ model, which is closely associated with classic EC programmes. New governance mechanisms received a significant fillip at the Lisbon Council, but the main focus of the Lisbon Strategy has been the ‘Open Method of Coordination’, which retains a focus on governmental actors, albeit at national level.
The deployment of the ‘new governance’ moniker is suggestive of both forms of deviation from the classic model – greater involvement of non-governmental actors and use of instruments and mechanisms other than law. In practice most of what passes for new governance involves a deviation from classic models in only one of these parameters, that is the use of non-legal instruments. With the Open Method of Coordination amongst the key examples, economic policy coordination substantially relies on non-legal instruments, but is chiefly concerned with coordination of national governments. Similar comments might be made of the European employment strategy. We find rather little evidence of a shift towards greaterinvolvement of non-governmental actors in governing. The recognition of non-state actors within policy networks is not new. New governance would surely involve not just policy discussion but also involvement in the operational tasks of governing. Central examples in the EU might include the development of standardisation bodies such as CEN, CENELEC and ETSI and, linked to this, the delegation of standard setting to such bodies in the so-called ‘new approach’ to technical standards. But, the latter strategy pre-dates Lisbon by nearly 20 years. Thus, an initial survey suggests that there may not be that much EU governance that is new in both dimensions, and what there is, in many cases, only new-ish. What passes for new, in the sense of post-Lisbon, is perhaps less innovative than some earlier initiatives.
Does it matter that the deployment of non-state governing capacity is less central to ‘new governance’ than might be anticipated? I suggest in the paper that the question goes to the heart of doubts about the legitimacy of the EU. Legitimacy is premised on two quite distinct forms of evaluation. First, there is the question of who participates in governance processes (not just policy processes) and on what terms? Wider participation in decision-making and better access to governance mechanisms, underpins a form of procedural legitimacy. However I suggest that the legitimacy of the EU institutions is much more based on the substance of getting the job done, than on the process. Accordingly the legitimacy of diffusing governance is liable to be evaluated by asking whether the outcomes were, in some sense, better than they would have been, following the community method. Answering such a question is challenging because it involves hypothetical consideration of possible alternative outcomes. At the root of the question lies the possibility that diffusing governance opportunities brings with it the opportunity to exploitcapacities that are possessed outside of government but not within it. Such capacities are found both in markets and communities. In invoking non-governmental activities the question is not just about using the capacities that are there, but also about developing those capacities in a way that supports future governance initiatives. Such capacities are developed not just in isolation, but relationally within the learning processes that are involved in participation in governance. Many instances of such non-governmental activity may not be stimulated by governmental actors, but be merely the subject of observation. The paper concludes with an evaluation of the potential to reconceptualise the relationship between governmental and non-governmental activity to better incorporate the idea of observation of non-governmental regimes as part of a governance strategy, which may more truly be new.
Framing Accountability of EU Administrative Actors
Professor Deirdre Curtin
We may live in what has been termed the “age of accountability” but accountability discourse as such is relatively new at the level of the EU as well as being conflated with other debates. Discussions about accountability in the EU tend to be ultimately discussions about democracy and the control of delegated power. Not only can we not categorise the political system of the EU as being based entirely on a model of parliamentary democracy (nor indeed exclusively any other model, such as a presidential one) but also we need to face the fact that a significant part of the “output” of the EU is non-legislative. This reflects in part a widespread drift to using non-majoritarian actors and institutions in EU policy-making at various levels of policy making and largely removed from any parliamentary control or oversight. Down in the underworld below the level of the formal political actors is congeries of actors (committees, agencies, networks, public administrations). The administrative sphere does not only deal with technical and purely administrative matters but also with aspects of policy making that raise political questions in a variety of ways. It is not just a matter of non-legislators “legislating” but also of executive and administrative actors taking non-legislative decisions that nonetheless may involve “political” choices. And much of this takes place without any mention in the formal “constitution” of the EuropeanUnion as laid down in the various treaties and elaborated on and added to by the Court of Justice in its rulings. The role of executive and administrative actors in the EU is thus both more expansive and more multi-dimensional than a close following of the “constitutional” debate might lead one to believe.
The purpose of this paper is to explore and describe in a preliminary fashion what can be termed emerging practices of accountability with regard to two significant “sets” of administrative actors at the EU level. The focus on comitology committees and on EU level agencies as exemplary of “technocratic governance” is deliberate as both instances of EU administration are highly institutionalized at the sub-constitutional level. This contrasts with for example much of the network governance that is emerging largely in the informal sphere with either noor very ad hoc institutionalization. Moreover, the issue of delegation of powers from a principal to an agent is salient and an established part of the discourse on comitology and on the creation of (independent) agencies. The relevance is two-fold in this context. First, it raises the issue of a delegation model of accountability whereby a (legislative) principal delegates (administrative) tasks to an agent within certain parameters and subject to certain ‘control’ by the principal and/or retrospective accountability. At the same time its raises the broader issue: can all emerging accountability forums and mechanisms be framed as part of a principal-agent relationship or do we (also) need a looser conceptual framing that understands accountability in the more ‘constitutional’ sense of power being checked and balanced from various (institutional) sources?
SESSION II: SOCIAL EUROPE AND THE MARKET
Health care services in internal market law: an opportunity for a ‘Transformative Directive’
Professor Tamara Hervey and Professor Louise Trubek
Interactions between internal market law and national social or welfare services may be seen as presenting regulatory problems for the EU and its Member States.
For instance, the creation of the internal market in health care services, through private litigation, based on Article 49 EC, raises significant uncertainties for relevant actors, especially the governments of the Member States, and their health care institutions. These focus in particular on the impact on their stability and internal balance and the viability of their social goals. The current legal position gives scope for detrimental effects on national health care planning and capacity maintenance, both of which are crucial to the sustaining of quality standards and values of social equity in health care provision, which underpin the national health (insurance) systems of all Member States of the EU. The ability of patients to access (and be reimbursed for) innovative treatments that might not be recognised as reimbursable within their home state may imply a loss of control over the reimbursement of such new and ‘unproven’ treatments, that is, decisions about cost-effectiveness. The same reasoning applies to the use of Article 49 EC litigation by patients seeking to avoid long waiting times for treatment in their home Member States. States use hospital waiting lists in effect as a tool to constrain spending. Waiting lists also arise as a logical consequence of decisions about resource allocation. The application of Article 49 EC in effect to avoid national waiting lists implies a loss of control at national level over resource allocation on social welfare at national level.
Using the example of health care services, this paper explores these problems, and considers the opportunities that a ‘new governance’ approach may bring. Rather than relying on litigation based on Article 49 EC (‘negative integration’) or a detailed Directive at EU level (‘positive integration’) – which would be politically impossible, we suggest an alternative approach. A ‘Transformative Directive’ would involve a very simple formal substantive legal rule. This would be accompanied by a set of ‘federal experimentalist’ institutions and mechanisms, (a framework for creating rules) to breathe life into the formal legal provisions, not (primarily) through court-based litigation processes, but through iterative and participative soft law generation. Such an approach sees the current position as creating an opportunity for a hybrid form of old and new governance. Here the roles played by (formal, hard, old) law are to create a framework rule, to bring to bear certain constitutional values and rights, and to set legal duties relating to the mechanisms and practices of ‘new governance’: information and data generation and exchange; development of guidance; and review, testing and validation of practice.
Such a hybrid between old and new governance has scope as a general approach to circumstances where the ‘European social model’ and the law of the internal market are or appear to be in contradiction with one another.
Bargaining in the Shadow of What? Reflections on Governance in the Field of Community Employment Law ‘
Dr. Gavin Barrett
The employment policy field is one, which has provided much in the way of raw material for those with a keen interest in governance at European level. In the first place, the employment policy field has been of interest as one in which ongoing tensions manifested themselves from an early point between, on the one hand, the desire of some member states to maintain national competitiveness in a unified European market notwithstanding a high level of domestic protection of workplace rights, and the view of other member states that the optimal way of ensuring economic wellbeing was competition without major interventions by European law in the field of labour law standards. As a result, the need for a significant European social policy was from the very foundation of the (then) European Economic Community a contested idea and remains both a locus of tension, and furthermore a source of conflict between rhetoric and reality.
Partly in consequence of such tensions, the field of European employment law has for long also constituted a testing ground for reconceptualisations both of the methods and of the instruments of governance at European level. Numerous examples can be given. Those interested in the influence of soft law instruments in the law can look to the operation and influence both of the Community Charter of Fundamental Social Rights and, more recently, of the Charter of Fundamental Rights of the European Union. Those interested in the operation (and allegedly centripetal force) of enhanced cooperation can look to the experience of the Community as regards the operation of the Social Policy Agreement and Social Policy Protocol, with the provisions of the Agreement now finding themselves substantively reproduced in the Social Chapter of the EC Treaty. An early and significant example of the Open Method of Coordination in action has been provided by the Employment Title (Part 3, Title VIII) of the EC Treaty, mandating a coordinated strategy for employment. And of course, a radical innovation in the field of governance is the role given to the process of social dialogue in the Maastricht Social Policy Agreement, with the relevant provisions now found in Articles 138 and 139 of the EC Treaty.
The intention of this paper is to offer some reflections on the foregoing tensions and innovations in the field of social policy governance. At the core of Community social policy, however, arguably remains the Community method of legislating, and some thoughts on the lessons which the operation of the Community method of legislating in the social policy field are offered on the basis of the experience of one major piece of legislation in this field, the Acquired Rights Directive, a measure which has spawned a volume of case-law in the European employment law field second only to that produced by Community equality law. The question is put of what lessons, if any, are to be drawn from the manner in which the Acquired Rights Directive has evolved in the thirty years of its existence in one form or another.
SESSION III: FINANCIAL MARKETS
Law-Making and Policy Formation for the EC Financial Market in the post-FSAP Environment
Professor Niamh Moloney
The turbulent Financial Services Action Plan (FSAP) period has now completed and brought with it massive and controversial regulatory change. The EC is now the primary regulator for the EC’s financial markets. A juggernaut of EC regulation is bearing down on the markets.
The post-FSAP regulatory environment is, however, beset by risks and uncertainties. The chief risk for the FSAP is that it produces costly and complex legal and institutional change but does not have positive transformative effects on the markets. Whether or not the FSAP is effective depends on a complex series of variables including the effectiveness of implementation, enforcement, and supervisory convergence. It also depends on more elusive factors, chief among them whether the FSAP has correctly judged the costs and benefits of the new regime and whether the FSAP can have transformative effects on market behaviour. This fundamental uncertainty as to the outcomes of the FSAP calls for a close focus on any additional risks generated by the law-making and policy formation process in the post-FSAP period if optimal results are to be achieved or, at least, prejudice to the marketplace avoided. Given that the outcomes of the FSAP are uncertain and costly, and given the limited potential for corrective action from regulatory competition, the recent strategy shift in EC financial market policy towards ensuring the effectiveness of the law-making and policy formation process is welcome. But considerable accountability and effectiveness risks exist.
Post-FSAP, the new regulatory regime will be reviewed and new rules will emerge through an institutionally complex, multi-dimensional law-making and policy formation process. In particular, the four-level Lamfalussy process for financial market law-making (level 1 rules adopted under inter-institutional procedures; level 2 technical market rules adopted through delegated law-making by the Commission; level 3 supervisory convergence; and level 4 enforcement) is maturing. Important evidence is emerging as to the dynamics of Lamfalussy-era law-making. It is now clear that the Committee of European Securities Regulators (CESR) plays a central role in the law-making and policy formation process. But it is a troublesome actor given the reach of its influence and the limitations on its accountability.