6: The European Commission

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6 The European Commission
European Co-operation and Integration
27.05.2009
Universität Konstanz, Dept. Politics and
ManagementSummer 2009Gerald Schneider
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Outline

• Council of Ministers Decision Making
• Power and Structure of the European Commission
• Executive and Legislative Functions of the
  Commission
• Administrative Decision Making Comitology
• Regulatory Decision Making

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Commitments
Real life bargaining is often influenced by
actions prior to the formal negotiations. Most
important are partial commiments. A partial
commitment is revocable, but to do so is
costly. A model with commitments is typically
dynamic because players have to commit themselves
to a certain outcome first. If they do so, they
often exploit information asymmetries to bolster
their claims. In international negotiations, this
kind of strategy comes close to what Schelling
described as the pardox of weakness and Putnam
popularized through the two-level game notion.
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Schellings paradox of weakness
p. 22 "paradox that the power to constrain an
adversary may depend on the power to bind
oneself that, in bargaining, weakness is often
strength, freedom may be freedom to capitulate,
and to burn bridges behind one may suffice to
undo an opponent." p. 28 "If a binding public
opinion can be cultivated and made evident to the
other side, the initial position can thereby be
made visibly final." Source Thomas C. Schelling
1960. Strategy of Conflict. Cambridge, Mass.
Harvard University Press.
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Putnams notion of two-level games
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Eight strategies to raise one's own credibility
1. Reputation building 2. Contract writing 3.
Interruption of communication 4. Burn bridges 5.
"A threat that leaves something to chance" 6. To
move in a piecemeal way 7. Team work 8. Hire a
negotiation agent Avinash Dixit/Barry Nalebuff
1991. Thinking Strategically.New York Norton.
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Brinkmanship
"Brinkmanship is the deliberate creation of a
recognizable risk, a risk that one does not
completely control. It is the tactic of
deliberately letting the situation get somewhat
out of hand, just because its being out of hand
may be intolerable to the other party and force
his accommodation. It means harassing and
intimidating an adversary by exposing him to a
shared risk, or deterring him by showing that if
he makes a contrary move he may disturb us so
that we slip over the brink whether we want to or
not, carrying him with us." Source Thomas C.
Schelling 1960. Strategy of Conflict. Cambridge,
Mass. Harvard University Press.
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Qualification of the Putnam model (Keisuke Iida
JCR 1993)
Complete information about domestic
restrictions 1) The negotiation leader who faces
domestic constraints possesses an advantage as
long as the restrictions are severe. 2) No delay
in the negotiations. 3) The treaty will always be
ratified. Incomplete information at the
international level 1) The negotiation leader has
an advantage as long the other negotiator is
guided by the belief that the restrictions are
severe. 2) The negotiations are sometimes
delayed. 3) The treaty will always be
ratified. Incomplete information at the domestic
level 1) The restricted negotiator has an
advantage if the successful ratification depends
very much on the anticipated share of the
negotiation outcome. 2) No delay. 3) The treaty
will not always be ratified.
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Some other two-level games
Mo (1995)
q
V(q)
N N(q)
F
V
Outcome without veto
Outcome with veto
Milner Rosendorff (1996)
q
V(q)
N N(q)
F
V
Outcome without veto
Outcome with veto
Hammond Prins (1999)
q
V(q)
N N(q)
F
V
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Two-level game logic within the NBS framework
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A Limited Information Model with a Prior
Commitment Schneider/Cederman IO 1994
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Assumptions and propositions
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Negotiations in the European Council
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Some Hypotheses derived from the exit game
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Further tests of the Schelling/Putnam thesis I
Simon Hug, Thomas König 2002. In View of
Ratification Governmental Preferences and
Domestic Constraints at the Amsterdam
Intergovernmental Conference. IO 56/2
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Further tests of the Schelling/Putnam thesis II
Source J. Slapin 2006, European Union Politics
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Further tests of the Schelling/Putnam thesis III
Source Bailer/Schneider 2006. Nash or
Schelling?.. In Thomson et al. The European Union
Decides. Cambridge Cambridge University Press.
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Negotiations I
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Negotiations II
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The Council of Ministers
Distribution of votes for each Member State (from
01/11/2004)
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Presidencies, 2006-2009
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Selfdescription
Council decisions are prepared by a structure of
some 250 working parties and committees
comprising delegates from the Member States. They
resolve technical issues and forward the dossier
to the Permanent Representatives Committee
(Coreper), made up of the Member States'
ambassadors to the European Union, which ensures
consistency in the work and resolves
technical-political questions before submitting
the dossier to the Council. The Council takes
decisions by a vote of Ministers from the Member
States. There are three types of vote depending
on the Treaty provisions for the subject being
dealt with simple majority (for procedural
decisions), qualified majority (a weighted voting
system based on the populations of Member States
used for many decisions concerning the internal
market, economic affairs and trade) and unanimity
(for foreign policy, defence, judicial and police
cooperation, and taxation).
http//www.consilium.europa.eu/cms3_fo/showPage.as
p?id426langen
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Excerpt from a Council protocol
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Conflict Dimensions in the Council of Ministers
Source Zimmer, Schneider, Dobbins, Political
Studies 2005
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Substantive interpretation of conflict dimensions
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Explaining the variation on the first
conflict dimension
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Alternative interpretation based on roll
call votes
Source M. Mattila, EJPR 2004
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Deciding by unanimity? Abstentions and negative
votes
Source Mattila 2004
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Coalitions in the Council according to
Hagemann/de Clerch-Sachsse 2007, CEPS
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Source D. Drüner 2007, Unpublished Doctoral
Dissertation Konstanz
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Effects of Enlargement on Council Decision Making
Source Sara Hagemann/Julia de Clerck-Sachsse
2007.CEPS
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Behaviour in the Council did not change according
to this analysis. Spain is no the member who
opposes proposals most frequently.
Source Sara Hagemann/Julia de Clerck-Sachsse
2007.CEPS
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Are Decisions Made by the Ministers or the
Sherpas (i.e. a Committee)
Source Frank M. Häge, EUP (2007)
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The European Commission?
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The European Commission Decision Making Example 1

• Brussels, 9 June 2006
• Single market for air transport between EU and
  Singapore
• European Commission Vice-President Jacques
  Barrot, Austrian Vice-Chancellor Hubert Gorbach
  and the Minister of State for Finance and
  Transport of Singapore, Mrs. Lim Hwee Hua signed
  an EU-Singapore aviation agreement today which
  will allow European airlines to fly between
  Singapore and any EU Member State. Singapore is
  the first country in Asia to sign such a
  horizontal aviation agreement with the European
  Community.

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The European Commission Decision Making Example 2

• Brussels, 9 June 2006
• EU and Greenland initial new fisheries
  partnership agreement
• The European Commission, on behalf of the
  European Union, and Greenland have recently
  initialled a Fisheries Partnership Agreement
  (FPA) for a period of six years, from 1 January
  2007. This fisheries agreement will replace the
  current one, which has been in force since 1985.
  The new Protocol under the FPA provides fishing
  opportunities on several species in Greenland
  waters. Part will go to the EU fleet and another
  part will be used for exchange of quotas with
  third countries to balance the EU fisheries
  agreements in the North Atlantic. The annual EU
  financial contribution will be 15,847,244, of
  which 25 is earmarked for support to the
  Greenlandic fisheries policy. In addition to the
  EU financial contribution, a payment of
  2,000,000 is expected from ship owners in the
  form of licence fees. Greenland will also receive
  25 million from the EU for cooperation in areas
  other than fisheries. This means that, in all,
  Greenland will receive the same amount as it does
  under the current fisheries protocol.

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The Power of the European Commission

• Initiator (agenda setting-power because of right
  to initiate legislation)
• Executive organ a) Implementation of
  regulation (comitology gt Council as partial
  gatekeeper) b) Budget c) International
  negotiations
• Guardian of the Treaty - Failure to fulfil an
  obligation (against MS) - Failure to act
  (against council) - Application for annulment
  (against decisions of Parliament and
  Council) - State aid control and merger control

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The High Authority (-58), the Commission of the
EEC (58-67) and the Commission of the EC/EU (67-)

• Period President Number of
• members
• 1952-1955 Monnet (F)
• 1955-1958 Mayer (F)
• 1958-1962 Hallstein (G) 10
• 1962-1967 Hallstein (G) 10
• 1967-1970 Rey (B) 14
• 1970-1972 Malfatti (I) 9
• 1972-1973 Mansholt (NL) 9
• 1973-1977 Ortoli (F) 13
• 1977-1981 Jenkins (GB) 13
• 1981-1985 Thorn (L) 14
• 1985-1995 Delors (F) 14/17
• 1995-1999 Santer (L) 20
• 1999-2004 Prodi (I) 20/30
• 2004-2009 Barroso. 25

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Commissioner Selection

• At the European Council of 4 November 2004, Mr
  BARROSO, president-elect of the Commission,
  presented his revised proposal on the composition
  of the future Commission. The new proposal
  foresees the following changes   Mr PIEBALGS
  replaces Mrs Ingrid UDRE and is assigned the
  Energy portfolio previously assigned to Mr
  KOVÁCS Mr FRATTINI is nominated
  Commissioner-Designate for Freedom, Justice and
  Security  Mr KOVÁCS, previously
  Commissioner-Designate for Energy takes over the
  Taxation and Customs Union portfolio previously
  assigned to Mrs UDRE.

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The Investiture Procedure

• According to Article 214(2) of the Treaty
  Establishing the European Community, as amended
  by the Treaty of Nice, the appointment procedure
  is as follows     First, the European Council,
  composed of the Heads of State or Government of
  the Member States, nominates the person it
  intends to appoint as Commission President. This
  nomination must then be approved by a majority
  vote in the European Parliament. In the case of a
  rejected nomination, the President of the
  European Parliament will request the European
  Council to nominate a new candidate.  Once the
  nominee has been approved, each Member State
  government proposes the person whom it intends to
  appoint as Member of the Commission. The Council
  of Ministers, with the agreement of the nominee
  for President, adopts the list of nominees. 
  The President and the other nominee Commissioners
  are then subject as a body to a vote of approval
  by the European Parliament. Before taking this
  vote, Parliament's committees will conduct
  hearings in accordance with Parliament's internal
  Rules of Procedure with all the nominees except
  the President, who has already been approved.  
  Following Parliament's vote of approval, the
  President and the other Members of the Commission
  will be appointed by the Council.

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Franchino, BJPS-Conference, British Academy,
London, 2006
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Decision Making in the European Commission

• Weekly Meetings
• The Commission shall act collectively..
• The President shall adopt the agenda of each
  Commission meeting...
• Decisions by simple majority possible
• Confidentiality

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The Civil Service Hierarchy and Salary (16
levels all in all)
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Legislative Power of the European Commission I
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Legislative Power of the European Commission II
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Administrative Decision Making The
Principal-Agent Problem

• ..there is always some conflict between the
  interests of those who delegate authority
  (principals) and the agents to whom they delegate
  it. Agents behave opportunistically, pursuing
  their own interests subject only to the
  constraints imposed by the relationship with the
  principal. The opportunism that generates agency
  losses is an ubiquitous feature of the human
  experience. Kiewit/McCubbins 1991. The Logic of
  Delegation. Chicago University of Chicago press.
  
• In the EU, delegation problems are paramount
  because of the multitude of principals. If these
  principals disagree, the constraints on the
  agents are less severe.

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Delegation problems with multiple principals
Bureaucratic drift
P3
A
P1
P2
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Budget maximization The Niskanen model
CEMarginal benefit of bureaucratic
output AMMarginal costs qBOutput with maximal
budget
Quelle Breton/ Wintrobe JPE 1975
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Counter-measures of the principal I
"The most direct way to control agencies is for
today's authorities to specify, in excruciating
detail, precisely what the agency is to do and
how it is to do it, leaving as little as possible
to the discretionary judgment of bureaucrats -
and thus as little as possible for future
authorities to exercise control over, short of
passing legislation ... Terry Moe 1990.
"Political Institutions The Neglected Side of
the Story." Journal of Law, Economics, and
Organization 6213-53.
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Counter-measures of the principal II

• Ex ante design of institutions (e.g. extent of
  discretionary power, legal instruments)
• Selection of agents
• 3) Accountability measures
• 4) Monitoring
• a) "Fire-alarms" (outside supervision)
• b) Controlling through other institutions (court
  of auditors, parliament)
• c) "Police patrols" (inside supervisiondirect
  supervision of agent)

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Two views on delegation

• The traditional view the most direct way to
  control agencies is for todays authorities to
  specify, in excruciating detail, precisely what
  the agency is to do and how it is to do it,
  leaving as little as possible to the
  discretionary judgments of bureaucrats and thus
  as little as possible for future authorities to
  exercise control over, short of passing
  legislationTerry Moe 1990. Political
  Institutions The Neglected Side of the Story.
  Journal of Law, Economics, and Organization
  6213-53.
• A transaction cost perspective Policy can be
  made either through direct legislation or by
  delegation to the executive branch There are
  political transaction costs associated with
  either option the costs of making policy
  internally come from the inefficiencies of the
  committee system, while the problems of
  delegation stem mainly from Congresss principal
  agent problems of oversight and control the
  boundaries of the administrative state will be
  determined by the trade-off between these two
  sets of transaction costs.David Epstein/Sharyn
  OHalloran 1999. Delegating Powers. Cambridge
  CUP.

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Delegation in the EU Comitology

• Most EU regulation in not enacted as legislation
  by the Council and Parliament but as
  implementation measures under the executive
  duties of the Commission. Such regulation can be
  adopted when the Council has conferred executive
  powers on the Commission and after an
  implementation committee, composed of policy
  experts from the Member States, has given its
  opinion on or approved the Commission's proposed
  measures. The committee procedures are commonly
  referred to as "comitology".Source
  http//www.euractiv.com/en/governance/comitology/a
  rticle-117454

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Comitology Types of Committees I

• Advisory committees following draft measures by
  the Commission, the committee delivers its
  opinion within a certain time limit "if necessary
  by taking a vote" (simple majority). The
  Commission is to take the "utmost account of the
  opinion delivered" and inform the committee of
  the manner in which its opinion has been taken
  into account. This procedure is generally used
  when the policy matters considered are not very
  sensitive politically
• Management committees where the measures adopted
  by the Commission are not consistent with the
  committee's opinion (delivered by qualified
  majority), the Commission must communicate them
  to the Council which, acting by a qualified
  majority, can take a different decision. This
  procedure is used in particular for measures
  relating to the management of the Common
  Agricultural Policy, fisheries and the main
  Community programmes

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Comitology Types of Committees I

• Regulatory committees the Commission can adopt
  implementing measures only if it obtains the
  approval of the committee (voting by qualified
  majority). In the absence of this approval, the
  proposed measure is referred back to the Council
  which takes a decision by qualified majority.
  However, if the Council does not take a decision,
  the Commission can adopt the measure provided
  that the Council does not object by a qualified
  majority. This procedure is used for measures
  relating to protection of the health or safety of
  persons, animals and plants and measures amending
  non-essential provisions of the basic legislative
  instruments.

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The Efficiency of Delegation in the European Union

• there seems to be a more general trade-off in
  the design of EU institutions. On the one hand,
  the monopoly proposal power is a powerful
  resource for the Commission. It leads to high and
  stable degrees of discretion. On the other hand,
  implementation committees are equally powerful
  mechanisms of control, especially because used by
  many principals Comitology balances the
  Commissions initiations power and its bias for
  legislative intervention. A reform towards less
  restrictive committee procedures should probably
  be linked to a reform of the legislative
  prerogatives of the Commission such as the
  conferral of the power of initiation upon the
  Council of Ministers and the Parliament.
• Fabio Franchino 2000. The Commissions
  Executive Discretion, Information and
  Comitology. Journal of Theoretical Politics
  12/2155-81.

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Two interpretations of comitology
1. Comitology as a discussion forum Comitology
"is a rather normal tool of the policy maker and
policy implementer, namely the convening of
groups through which the Commission discusses ...
the progress of policy implementation." Quelle
Fiona Hayes-Renshaw/Helen Wallace 1997. The
Council of Ministers. London Macmillan. 2.
Comitology as a means to supervise the agent
"The likelihood that a restrictive committee is
preferred to a permissive one increases as either
uncertainty of or conflict among Union
legislators deepen. "Conflict and uncertainty
are also important factors affecting the degree
of stringency in control. Quelle Fabio
Franchino 2000. European Union Politics
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Delegation as a consequence of uncertainty and
conflict (Franchino EUP 2000)
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Delegation to National Administrations (Franchino
2006, CUP)
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Summary
The Council will delegate greater discretionary
authority to the Commission in acts adopted under
qualified majority voting, and issue areas that
require general and managerial skills at the
supranational level it will delegate greater
executive discretion to the member states in acts
adopted under unanimity, and in issue areas that
require specialized and technical
knowledge. intergovernmentalist expectations
seem validated because, if decision rules
reflect underlying preferences and distributive
elements, these results produce a set of policy
outcomes that broadly match member states
intent. Fabio Franchino 2004. Delegating Powers
in the in the European Community. BJPS
34269-293.
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Regulatory Policy Making The Stigler-Peltzman
approach
Monopoly regulators set a price such that the
marginal gain in support from the producers for
an increment in monopoly rents, R, is just offset
by the loss in consumer votes... ...the
vote-maximizing politician may favor the
regulated industrys producers, but stops short
of setting price at the rent maximizing level
regulation brings price to a level somewhere
between the pure monopoly and pure competition
prices....By this argument, Peltzmann helps to
explain the ubiquitous regulation of agriculture
around the world and other interventions in
seemingly competitive industries like trucking
and taxicabs. Source Dennis C. Mueller 2003.
Public Choice III. CUP
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Political economy of regulation logrolling
...a winning coalition in the legislature of the
central government exploits the potential
inherent in the majority rule and provides the
local public good to only its members and/or
provides these goods using discriminatory tax
formulas. This sort of tyranny by the majority
coalition has obvious attractions for its members
but, given the high probabilities of cycling, it
also has its risks. The representative or party
that finds itself in a winning coaltion today may
be on the losing side tomorrow. ...Often the
effect of geographic representation seems not to
be that a particular public good is provided by
the central government to each local community,
but that different local public goods are
provided. Each representative in the federal
legislature proposes a pet project that her
constituents would like to see the federal
government finance. Source Dennis C. Mueller
2003. Public Choice III. CUP
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An example of the politcal economy approach
fishing policy
Ministers increase TAC to a lesser extent when
they care more about protecting the environment.
The impact is not negligible. Let us consider
the two extreme values of Environment. The
increase in TAC when the concern for the
environment was at its lowest in 1984 was almost
three thousand tons more than when such concern
was at its highest, in 1991. .
left-wingministers or those less supportive of
fishermen/farmers tend toaugment TAC to a lesser
extent only as the number of statesincreases.
.. the mere addition of one interest around a
specific species leads to an increase in the
proposed quantity of TAC of about 370 tons. This
is equivalent to Germanys 1999 cod quota for the
Skagerrak. Franchino/Rahming 2003
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Federalism and redistribution
Source Rodden 2002
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Federalism and redistribution II

• The empirical analysis demonstrates a close
  connection between the distribution of votes and
  fiscal transfers in the legislative institutions
  of the European Union. Other things equal, small
  member states with more votes and relative voting
  power per capita are favored in the distribution
  of transfers. This relationship has held up
  through successive enlargements. Perhaps these
  results should not be surprising. Large states
  might desire the gains associated with forming
  and deepening a federal unionso much so that
  they are willing to pay off fearful, indifferent,
  or simply manipulative states. Perhaps when such
  states are offered more votes per capita in the
  initial bargain, fiscal redistribution in the
  future is an implicit part of the offer.
• J. Rodden 2002 EUP

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