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Exchanging Ideas on Europe 2006
Visions of Europe: Key Problems, New Trajectories
UACES 36th Annual Conference and 11th Research Conference

Research Session 5

UACES reserves the right at all times to make changes to the programme where necessary.

Session 1  |  Session 2  |  Session 3  |  Session 4  |  Session 5  |  Session 6  |  Full Programme

Friday, 1 September (17:45-19:15)

The panels listed in the table below are followed by the abstracts for each of the papers.

Afonso, Oscar (Universidade do Porto, oafonso@fep.up.pt)
Joint paper with Rui Henrique Alves
Endogenous Growth and European Fiscal Rules
The creation of the European Monetary Union (EMU) has led to a substantial increase in the discussion of the importance of fiscal discipline and the adequate fiscal rules in such a monetary union.
The “European” solution, including a single monetary policy and national fiscal policies restrained by the rules of the Stability and Growth Pact (SGP), has been challenged by many authors and politicians. Among the main questions discussed in recent years, we find the use of the same rules for different situations in Member-Countries, particularly in what concerns economic dimension and economic level of development.
We develop a general equilibrium R&D endogenous growth model, considering a monetary union between two countries that may differ in economic dimension and/or in level of development. By solving transitional dynamics towards the steady state through numerical computation, the model allows us to examine the impact of fiscal shocks leading to excessive deficits.
The paper has two main objectives: on one hand, we analyse the eventual different implications of such deficits whether they occur in the small or in the big country; on the other hand, we analyse whether an excessive deficit should be allowed in order to permit the catching up by the less developed country.

Alves, Rui Henrique (Universidade do Porto, rhalves@fep.up.pt)
Joint paper with Oscar Afonso
The ‘New’ Stability and Growth Pact: More Flexible, Less Stupid?
Since the beginning of the European single currency project, the adoption of fiscal binding rules, restraining the use of the single policy instrument left for national authorities, has been challenged by many authors and politicians. The discussion has improved in recent years, following a period of economic recession or stagnation in several Member-Countries and some criticisms connecting the Stability and Growth Pact (SGP) to the general economic situation.
Some of the questions raised by those who criticized the initial framework for fiscal discipline may have been taken into account in the recent revision of the SGP (March 2005), which followed the suspension of the Pact for Germany and France and eventually turned the SGP more flexible and “less stupid”.

In this paper, we evaluate the changes contained in the “new” SGP, taking account of the properties for ideal fiscal rules put forward by Kopits and Symansky (1998) and comparing with some recently published studies on the same topic. The main result of our analysis points towards a clear increase in flexibility together with the probable emergence of new enforcement problems. In this context, an insufficient output in terms of fiscal discipline could arise, leading to the need of new improvements in the European framework for the definition and implementation of national fiscal policies, which we discuss in the last part of the paper.

Bergman, Annika (University of Edinburgh, a.bergman@ed.ac.uk)
The European Security Strategy, ESDP and Non-alignment
When Cyprus and Malta joined the EU in 2004, the number of non-aligned members rose from four to six.  This paper examines their individual and collective impact upon the development of the European Security Strategy (ESS) and the European Security and Defence Policy (ESDP). In so doing it explores to premise that the ESS and the ESDP have in significant parts been framed by the, policy priorities, strategic culture  and normative commitments of the non-aligned states.  Thus, the paper takes issue with the neorealist-inspired argument that it is only large members of the EU with sufficient power capabilities that can shape  the Union’s strategic choices.   In an effort to substantiate this claim the paper identifies   the close connection between the defining features of the ESS and ESDP and the strategic cultures of the non-aligned states.  This is followed by an examination of the non-aligned members’ attitudes towards EU-US relations.  The paper concludes by arguing that the non-aligned members of the EU are significant partners in the development of the EU as a global security actor rather than obstructing the process.

Biscop, Sven (Royal Institute for International Relations, s.biscop@irri-kiib.be)
Strategy or Stratagem? The European Security Strategy in Perspective
The European Security Strategy (ESS) adopted in 2003 is the first common strategic vision of the EU25, covering the whole of EU foreign policy, across the pillars. Contrary to the expectations of sceptical observers, the ESS has not been a one off demonstration of unity without any subsequent impact on actual policy-making. In the 2^nd Pillar especially, the ESS is constantly being referred to. Member States and the institutional actors make good tactical use of the ESS, linking policy initiatives to it in order to enhance their chance of acceptance. To the extent that foreign policy-making is effectively being shaped within the boundaries of the broad orientations as outlined in the ESS, it could be argued that a European strategic culture is in the making, i.e. the habit of automatically referring to the strategic framework of the ESS when taking decisions and the willingness to undertake the actions and commit the means required to achieve those strategic objectives.

Davidescu, Elena Simona (Queen’s University Belfast, e.s.davidescu@qub.ac.uk)
EU Funding for Environmental Policy in Hungary and Romania
This paper looks at the use of the Phare, ISPA and SAPARD funding dedicated to environmental policy for Hungary and Romania, from 1990 on-wards. The main question of the article is to what extent funding for the environmental sector has matched the main environmental problems faced by these countries. We separate between the funding allocated to the governmental and non-governmental sectors, and ask whether there was any coherence between the type of programs and the outcomes. The main argument of this paper is that funding for the environmental sector had mixed results for both the governmental and non-governmental sectors in Hungary and Romania, empowering or disempowering actors and shaping the policy agenda at different times according to the stage of the accession process rather than to domestic developments.
Furthermore, the implementation of environmental policy calls for bringing together governmental and non-governmental actors, but this has proved difficult even after the introduction of such requirements in the EU funding packages. This type of funding provisions comes too late, and there are important legacies of previous funding programmes which need to be taken into account.

Deforche, Jana (Universiteit Antwerpen, jana.deforche@ua.ac.be)
Joint paper with Peter Bursens
Subnational Strategic Behaviour Towards the EU: The Case of Flanders
This paper deals with one particular aspect of the Europeanization research agenda: when and to what extent does a subnational entity succeed to deal strategically with the EU? Defining Europeanization as the process of adaptation to the EU-level, this paper focuses on whether and how Flanders actively uses or just passively reacts to concrete European policy initiatives.  Drawing on case studies from the agriculture (Mid Term Review and Sugar Reform) and economic policy fields (Services Directive and parts of the Lisbon Strategy), this paper seeks to define the circumstances and mechanisms under which Flanders is able and willing to act pro-active or not. From a theoretical point of view, the paper follows a neo-institutional account of Europeanization, presupposing that all subnational entities are confronted with pressure to deal with the EU, but that the exact way they do depends on a range of domestic and policy-related variables. Data on how Flanders acts come from qualitative interviews with key figures in the Flemish, Belgian and European governmental and non-governmental levels (civil servants, members of parliament, diplomats and interest groups).

Fletcher, Maria (University of Glasgow, m.fletcher@law.gla.ac.uk)
The European Court of Justice: Carving Itself an Influential Role in the Third Pillar
This paper seeks to evaluate the role of the European court of Justice in respect of the third pillar of the European Union. With five rulings in the field of Police and Judicial Cooperation in Criminal Matters to date and several others pending, it is already clear that the Court has made its mark on this still fledgling agenda.  Despite the shortcomings of the system of judicial protection and remedies in respect of the third pillar it would seem that the ECJ has the potential to exert a strong pro-integrationist influence over a field that is riddled with institutional and conceptual complexities and tensions – the extent to which this is feasible and desirable will be discussed in the paper. In addition, the paper will offer a critique of the legal reasoning of the Court and draw some conclusions about the broader impact of its rulings on internal criminal policy.

Friedrichs, Jörg (International University Bremen, j.friedrichs@iu-bremen.de)
Who Wants What, When, and Why? International Police Cooperation and Large European States
International police cooperation is often invoked as the unavoidable answer to global threats such as terrorism and drug trafficking. Following Max Weber, however, international policing must be considered a particularly sensitive area of international cooperation. The reason is that it involves the monopoly of the legitimate use of force, i.e. the defining characteristic of modern statehood. It is therefore an interesting question to ask how far, under which circumstances, and for what reasons states are willing, or unwilling, to internationalise the control over their policing powers.
The aim of this article is to reach a solid understanding of national preference formation in the empirical domain of international police cooperation. Ideally, this would require an elaborate theory of national preference formation. At the moment, however, there is only one such theory available: Andrew Moravcsik’s liberal theory of international politics. While recognising that liberal theory has been tried and tested in the field of economic cooperation, it is an empirical question whether the theory works in other policy domains.
To clarify this question and to gain further insights into state preference formation in the domain of international policing, a tailor-made database containing 192 descriptive and 384 explanatory data points is examined by means of statistical analysis. It turns out that Moravsik’s liberal theory of preference formation is inadequate to account for state preferences in the policy domain of international police cooperation. Instead, a combination of functionalism and historical institutionalism, which is labelled as “historical functionalism”, is most suitable to explain national preference formation in this policy domain.

Friedrichs, Jörg (International University Bremen, j.friedrichs@iu-bremen.de)
Joint paper with Markus Jachtenfuchs, Eva Herschinger, Christiane Kasack
Policing Among Nations: Embedding the Monopoly of Force
The police is generally considered to be at the core of state sovereignty. In addition, few functional imperatives for international cooperation exist as compared to trade, environmental or financial issues. As a result, international police cooperation has been rather infrequent and weak. In fact, few authors found it worth studying. In recent years, international cooperation in this field has increased, most notably within the EU. The paper attempts to trace and explain international police cooperation since the 1990s as compared to the 1970s. It is based on a set of comparative case studies covering France, Germany, Italy, and the UK as well as a number of international institutions such as the EU or the UN. In the first step it aims at patterns of international police cooperation over time and across issue areas. In a second step, it aims at explaining those patterns by resorting to contextual factors such as ideas, functional imperatives, and domestic structures.

Guttenbrunner, Sonja (Free University of Berlin, sguttenb@zedat.fu-berlin.de)
New Modes of Governance and EU Enlargement: The Pre-conditions for Non-hierarchical Cooperation of State and Non-state Actors
Accession appears to be both a blessing and a curse to transition countries in Central and Eastern Europe. On the one hand, the implementation of the acquis supports their transformation from authoritarian regimes with centralized planning economies into liberal democracies with market economies. On the other hand, the accession countries face great difficulties in restructuring their economic and political institutions in order to meet the conditions for EU membership. The adoption of and adaptation to the acquis run into serious problems concerning both the effectiveness and the legitimacy of EU policies. These problems cannot simply be solved through command and control arrangements since these countries are “weak” states that often lack the capacity (resources) rather than the willingness to effectively implement EU policies. Therefore, alternative modes of governance that are based on non-hierarchical steering and systematically involve private actors in policy-making might be more appropriate to ensure the effective adaptation of and adoption to the acquis.
However, first empirical evidences show that these functional arguments do not explain the emergence of New Modes of Governance - they are/were not used frequently in the Eastern Enlargement Process and if they emerge, variation across countries exists. So I will ask what the preconditions for the use of New Modes of Governance are. Different theories of action identify different benefits and risks why cooperation takes place and accordingly why it is missing. The level of Social Capital may be one important explanatory factor why cooperation of state and non-state actors does not take place as frequently as one would assume and why there is cross country variation. In this paper I will compare Poland and Romania and the use of New Modes of Governance in adoption of and adaptation to the environmental acquis. I will argue that different levels of Social Capital may lead to variation in the use of New Modes of Governance in Enlargement Processes.

Haglund-Morrissey, Anne (Växjö University, anne.haglund@vxu.se)
Promoting Common Values in the European Union's Foreign Relations: The European Neighbourhood Policy
The European Neighbourhood Policy (ENP) is a new EU policy that offers a means to strengthen relations between the EU and its neighbouring partners in the East and South, which are not involved in the EU enlargement process. Its objective is to strengthen stability, security and sustainable development and to prevent the emergence of new dividing-lines in post-enlargement Europe. This study analyses the export of common values in the EU's foreign policy, seen through the developing ENP. Instead of offering a future EU membership as the main 'carrot' for reforms in the partner countries involved, the EU is trying to exert influence by other means, not least conditionality. First, the study explores how this export of common values in EU foreign policy can be characterised: what values are intended to be exported, what are the reasons behind this ambition and under which conditions can this strategy be considered successful? Second, it analyses the intended export of common EU values in the developing ENP.

Horvath, Anna (Central European University, pphhoa01@phd.ceu.hu)
The Social Protection Committee after the Enlargement: Still Deliberative Governance?
As a ‘soft’ mode of governance, the Open Method of Co-ordination (OMC) was designed to help EU member states to cope with common challenges that can threaten their social policy regimes. An important element of this co-ordination process is the work of specialised committees that are responsible for drafting the main objectives and for defining the main direction of policy-making. Committee discussions are supposed to be consensus-oriented deliberations of member states representatives. As the OMC depends on the self-commitment of member states to implement policies, this deliberation process is a precondition of its success and basis of its legitimacy. However, many seem to suggest that with ten new member states joining OMC committees, the institutional conditions of deliberations change, and deliberative processes – and after all, the whole mechanism of open co-ordination – are endangered. Thus, it is important to analyse the undergoing changes and the integration of new member states. This paper is going to provide a conceptual framework for this analysis, as well as a preliminary case study of the Social Protection Committee.

Houbenova-Delisivkova, Tatiana (University for National & World Economy, t.houbenova@iki.bas.bg)
Financial Restructuring of the South-East European Countries within the Context of the EU Accession
The paper discusses the future of the EU accession of South East European countries within the membership perspective for Bulgaria, Romania, Turkey and Croatia and the EU framework for stabilization agreements with other countries in the region. The evaluation of the compliance of South East European countries with the EU requirements in the pre-accession period is to assess the financial restructuring of their economies in the following aspects: 1) reform in the public finances and the public sector; 2)  reform in the financial sector and the financial intermediation; 3)  capital liberalization, external debt management and sustainable governance of the external payments and the balances of payments; 4) adoption of the euro and the integration to the European Financial Space. Conclusions are drawn as regards the role of the factors of the financial restructuring of the public finances and the financial sector, evaluation of the alternatives for the financial stabilization reforms and options for intergovernmental co-operation in the context of the EU accession. Specific issues of the absorption of the EU funds and the preparation for the EMU accession in the countries candidates for EU membership are to be revealed in the framework of their financial restructuring.

Lempp, Jakob (Dresden University of Technology, jakob.lempp@tu-dresden.de)
The Committee of Permanent Representatives and the Council Working Parties after Enlargement
Before enlargement, many experts expected that the functioning of most EU institutions would be strongly affected by the accession of the ten new member states in 2004. Compared to these expectations, affects that actually occurred were relatively moderate. Especially in the Committee of Permanent Representatives and in Council working parties enlargement took place smoothly and without major disturbances. A strong and enduring cleavage between “old” and “new” member states did not come into existence, and the often cited “esprit-de-corps” within Coreper and Council working parties is – after a short phase of adaptation and social learning – still very strong. However, some changes are noticeable. First, the negotiation process in Council working groups became more formal: A stricter time management has been implemented, individual member states have less possibilities to express their points of view and pre-negotiations between groups of member states to organize common positions have been the consequence. This, again, influences the mode of negotiation in the committees. Second, Permanent Representations of the new member states adapted much faster to EU procedures as did their governmental administrations at home, and therefore instructions for working group representatives from new member states are often less precise and leave much more room to manoeuvre. On the one hand, this lead to a greater autonomy of Brussels-based working group members from their national administrations, on the other hand, it lead to diffuse and heterogeneous ways of organizing the communication processes between Permanent Representations and national administrations in the capitals.
The paper analysis the way how enlargement influenced the functioning of Coreper and Council working parties. The analysis  is based on 39 qualitative interviews with experts from the Council General Secretariat and from Permanent Representations from both “old” and “new” member states. The interviews concentrated not only on the perceptions of experts on how the last round of enlargement of the Union affected the work in the committees, but also on the specific problems of representatives from new member states to adapt to established formal and informal procedures. Finally the paper tries to give an answer to the question, how these changes within the Council working parties in combination with problems of adaptation within national administrations of new member states affected the efficiency and of the committees.

Molloy, Seán (University of Glasgow, s.molloy@socsci.gla.ac.uk)
Security Strategies of the USA and the EU: Competing or Complementary Visions of International Order?
In an age of global terrorism the question of how to deal with this new security dilemma becomes ever more important. 9/11 demonstrated that the new threat to national security emanates not from a rival state or bloc, but rather from networks, groups of individuals and organisations that exist as viruses within the traditional international society. This viral nature of transnational terrorism is difficult to counter effectively. To date the American response has been to concentrate not on the viruses themselves, but rather to attack those who have played host to the viruses – a quarantine of the states that harbour or sponsor terrorism. To this effect, the USA has launched two major wars against Afghanistan and Iraq as theatres in a wider “War On Terror.” The European Union, which has also suffered the effects of Islamist terrorism, most evidently in the attack on Madrid in 2004 has also been developing a security strategy in the face of the threat presented by al-Qa’ida and other terrorist threats. The aim of this paper is to examine the nature of these strategies and the effects of the strategies on the transatlantic relationship, to determine if the American and European approaches are complementary in that they pursue parallel goals by different means, or if they are in fact incompatible in both means and ends, destined to drive a wedge between an increasingly Martian America and Venusian Europe.

Murphy, Mary (University College Cork, maryc.murphy@ucc.ie)
The Dynamism of Europeanisation: Evidence from Northern Ireland
In common with other sub-national units of the European Union, Northern Ireland is subject to ‘Europeanising’ influences. This influence became more profound and emphatic in the period after 1999 when powers were devolved to new regional political institutions. In the context of reformed patterns of regional governance, the evidence suggests a heightened awareness of and engagement with the European Union. New institutional structures, evolving formal and informal linkages, changed policy mechanisms and subtle cultural developments have been influenced by the EU context (although they have not compromised the uniqueness and distinctiveness of the Northern Ireland sub-national unit). The suspension of devolved institutions in Northern Ireland in 2002 has not meant that a fledgling Europeanisation dynamic has been lost. Rather new interactions between Northern Ireland and the European Union continue, suggesting that the legacy of a short period of devolution has been a longer-term process of Europeanisation. Europeanisation may therefore be viewed as a resilient and enduring process with a strong dynamic and momentum which is not wholly dependent on the nature and status of the sub-national unit.

Nakano, Satoshi (Toyohashi Sozo College, snakano@mvd.biglobe.ne.jp)
The European Social Dialogue: Where Does it Stand Now?
Since its formative era, supranational European social governance has evolved in a close relationship with North European corporatism. The launch of the European social dialogue by Jacque Delors in 1985 was then an indication that the social integration would be pursued formally in terms of the corporatist method in which the representatives of the capital and labour associations play a pivotal role. Nevertheless, some believe that the European social policy is largely disoriented because of the disturbance in the post-Fordist era of the neo-corporatism. This paper attempts to identify specific features of the European social dialogue by comparing it with and locating it among the changing contours of national corporatist systems. It is discussed that, although the European social dialogue falls short of ‘quasi- (or demi-) corporatism’ in terms of its institutional structure and functions, it is a system with a potential, and its social representative and economic regulatory roles in the era of neo-liberalism are explored.

Neuvonen, Mari (University of Bristol, m.h.neuvonen@bristol.ac.uk)
The Europeanization of National Parliaments: A Comparative Study of the UK, Finland, Poland and Estonia
The role of national parliaments has become a source of great interest in studies of the EU in recent years. This is partly because of problems related to legitimacy and the democratic deficit  and partly because of the recognition given to national parliaments in Nice and Laeken Declarations. Although national parliaments have been given new opportunities to be closely involved in EU policy-making, most of the existing literature considers them as losers in the European integration process. National parliaments are often characterized ‘passive’ rather than ‘active’ institutions compared to other state actors such as governments or interest groups.
This paper examines the impact of Europeanization on national parliaments’ by comparing the participation of national parliaments in four different EU countries: the UK, Finland, Poland and Estonia. It does so by focusing on two particular policy issues; immigration policy and border control policy; and by examining how the parliaments in these four member states have developed different mechanisms to influence to EU policy-making. This paper challenges the conventional wisdom concerning national parliaments in the EU’s policy-making process (i.e. that they are ‘passive’ rather than ‘active’) and argues that national parliaments have means and opportunities to ‘upload’ national preferences to the EU level. Although their influence is more often indirect (i.e. through national governments) this does not mean that it is ineffective. This paper compares the channels which national parliaments have created in order to effectively influence to the EU policy process in these four member states.

O'Brennan, John (University of Limerick, john.obrennan@ul.ie)
EU Enlargement to Eastern and Southeastern Europe: The Expansion of Normative Power Europe
This paper analyzes the European Union’s enlargement process through the conceptual lenses of normative and constructivist approaches to international relations. Enlargement has been the most importance vehicle for the stabilization and gradual democratization of the wider Europe in the aftermath of the Cold War. It represents one of the great successes of the European integration process in the contemporary period. The paper argues that enlargement represents the most important manifestation of the EU’s self-reflexive identity as a ‘normative’ power and a peaceable transnational security community, dedicated to externalizing its own identity through enlargement and democracy promotion. The most important indicator of the EU’s commitment to normative power values lies in the employment of a policy of democratic conditionality which impels candidate states to fully comply with EU norms and values in advance of accession. The article traces how the EU has developed its conditionality framework within enlargement structures and the impact this has had on candidate states in the course of both the eastern and southeastern enlargement rounds. It also argues that the differences between so-called material conditionality and normative suasion are not nearly as apparent as rationalist scholars have recently suggested. In fact enlargement largely evolves in response to both instruments of compliance and socialization.

Pomorska, Karolina (Loughborough University, k.m.pomorska@lboro.ac.uk)
Joint paper with Ana Juncos Garcia
The Deadlock that Never Happened? Impact of Enlargement on the Governance in CFSP Council Working Groups
The importance of the Council Working Groups (CWGs) in the process of governance in the area of Common Foreign and Security Policy (CFSP) has been underestimated in the academic literature so far. This paper intends to fill in this gap by providing empirical evidence. Contrary to some previous assumptions, the enlargement did not halt the decision-making process in a substantial way, but it changed the dynamics within this working environment, preserving the importance of consensus building practices at the level of experts. As a result of an increase in the number of actors and the range of interests, a greater amount of work is done informally. The aim of this paper is twofold. On one hand, it tracks the changes that the recent enlargement caused in the working practices of the COREPER II Working Groups in the Council of the EU. It also attempts to assess the adaptation processes of the New Member States to the work in the CWGs and pinpoint the main challenges that their administrative systems and diplomacies were faced with. The paper also identifies two main processes that have facilitated change and adaptation in the CWGs after the enlargement: learning and strategic socialization.

Sfaelos, Panagiotis (psfaelos@yahoo.co.uk)
The EU Anti-Terrorist Legislation and its Implications: Enhancing Security or Limiting Democracy?
This paper is concerned with the anti-terrorist legislation adopted by the EU in order to respond to the international fight against terrorism. The increasing terrorist activities over the last five years (New York, Madrid, London) have led the EU to intensify its anti-terrorist agenda. The question here is whether these anti-terrorist laws could compromise the values upon which the Union has based its very existence: ‘respect for human dignity, freedom, democracy, equality, the rule of law and respect for human rights’ (EU Constitution, Article I-2). The existence of democracy and civil liberties has meant that state power is exercised without interfering with individual rights and freedoms. After long struggles and conflicts, civil liberties are now codified in the constitutions of liberal democracies. The protection of human rights has also been a crucial accomplishment in post-war Europe, as the atrocities of World War II reinforced the need for human rights protection at international level. The EU has shown its respect for the above values by adopting the EU Charter of Fundamental Rights, included in the EU Constitution, and by consistently defending human rights on the basis of the European Convention on Human Rights (ECHR) and the constitutional traditions of the Member States. In order to preserve the above values, which have been consistently defended for the last 60 years, the EU’s anti-terrorist agenda has to find a balance between security and democracy. The need to fight terrorist activities is rightly a priority today. Nevertheless, efforts should be made so that democratic rights and freedoms are not violated. All the recent legislative developments in the area of security and terrorism, including the relevant provisions of the Schengen Information System II, are discussed in this paper in order to assess their implications for the Union and its people.

Siraj, Sanjida (University of Limerick, sanjida.siraj@ul.ie)
The EU and the Reduction of Global Poverty
Global poverty reduction is central to the development policy of the European Union (EU) and one of the leading agenda in its external relations. Recent reforms of the strategy and management of the EU development cooperation try to stress the coherence of external policies as opposed to independent policy-making by the Member States. Also, in accordance to the United Nation’s Millennium Declaration, the EU is committed to strengthen its focus on poverty reduction with a goal of halving global poverty by 2015. This article, from a neo-functionalist perspective, describes how the EU’s commitment towards global poverty reduction interacts within the EU’s own policy framework and the neo-liberal consensus in the global aid regimé. This is facilitated by a case study of the EU development cooperation with Bangladesh, one of the major EU-aid recipients. The study argues that greater coherence and poverty focus, as usually considered as the gold standard for the EU aid, are not adequate because other factors such as the amount of aid flow, relevance to the recipient country and above all the motivation of the EU are also important. This article also contends the efficacy of the neo-liberal doctrine of imposing political conditionality to achieve development objectives.

Steclebout-Orseau, Eloïse (European Central Bank, esteclebout@free.fr)
Joint paper with Mark Hallerberg
Sending Credible Signals under the Stability and Growth Pact
The language of preventive and corrective mechanisms in the Stability and Growth Pact indicates that the Pact affects the incentives that governments face when making fiscal policy decisions. What the incentives are in practice, however, is not explicit. To address these issues, we present two simple games. The first game models the relationship between a population and a government. The population has incomplete information about the type of government that is in office but an independent watchdog can reveal whether it is competent or rent-seeking. The second game models the European level, where the incomplete information concerns whether countries will be virtuous or sinners. If there are few sinners, the Council will sanction them. If there are enough sinners to constitute a blocking minority, the sanction will not pass. Governments anticipate what the others will do when deciding whether to “sin” themselves. The Commission sends early warnings when there are only a few sinners, but will want to leave the uncertainty in place when there are more potential sinners. This strategic behaviour at the EU level has practical implications for the domestic game – the Commission cannot serve effectively as the watchdog that populations need in order to sanction incompetent governments.

Theodoropoulou, Sotiria (London School of Economics & Political Science, s.theodoropoulou@lse.ac.uk)
Fighting European Unemployment: Is there a Substitutability Relation Between Labour Market Deregulation, Collective Wage Bargaining, Openness and the Monetary Policy Regime?
This paper explores why a number of EU countries managed to reduce their unemployment rates without deregulating their labour markets in the 1980s and 1990s.  Given that reducing the Equilibrium Rate of Unemployment (ERU) is a necessary condition for reducing the actual rate of unemployment, I investigate the determinants of wage-setting behaviour, that is, of one of the determinants of the ERU.  The hypothesis developed here is that in the presence of a politically independent, conservative central bank in an open economy, the reform of labour market protection policies may be redundant if the aim is to change the behaviour of wage- and price-setters that bargain in a highly coordinated manner in a way that reduces the ERU of the economy.  If this hypothesis were true, then it would partly explain how most western European economies managed under the aforementioned conditions, which have been increasingly common across western Europe since the 1980s, to reduce their ERUs without deregulating their labour markets.  The predictions of this hypothesis are tested through panel regression analysis.

Wagner, Wolfgang (Peace Research Institute Frankfurt, wwagner@hfsk.de)
Joint paper with Sandra Lavenex
Which European Public Order? Sources of Imbalance in the European Area of Freedom, Security and Justice
The creation of the Single European Market (SEM) has been accompanied by an intense discussion on whether market-creating measures have been privileged over market-correcting ones by the institutional system of the EU. The results of such an imbalance would be alarming to everybody concerned with the welfare state and a ‘European social model’. The creation of an ‘area of freedom, security and justice’ (AFSJ) launched by the Treaty of Amsterdam poses a similar question which, however, has remained heavily underresearched: Will the balance between policing competencies and individual rights shift towards the former at the expense of the latter? Recent work on the “new raison d’état” and the strengthening of national executives in processes of Europeanization points in this direction. This article explores the parallels between the common market and the AFSJ with regard to the relationship between the structures and substance of governance. The balance between security and individual rights is scrutinized in the main pillars of the AFSJ: asylum cooperation, judicial cooperation in criminal matters and police cooperation. The article underlines the limits of negative integration and mutual recognition in a climate of securitization, and questions the transfer of market-based modes of governance to core functions of (liberal and democratic) statehood.

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