The Politics of European Union Enlargement Theoretical Approaches (Routledge Advances in European Politics)

The Politics of European Union Enlargement

While the enlargement of the European Union is of indisputable and continued relevance, both for the development of the EU and for international relations in Europe more generally, it has been largely neglected in the theoretical literature on European integration. Developed and significantly expanded from a special issue of the Journal of European Public Policy, this volume draws on the insights from the recently emerging theoretically informed literature on the EU’s eastern enlargement and complements these studies with original articles that combine a theoretical approach with comparative analyses. The expert contributors focus on the broader theoretical debates and their implications for the enlargement of the EU, as well as placing the enlargement of the EU within the broader context of the expansion of international organizations and the study of institutions in international relations. This volume is a key reference text presenting the ‘state of the art’ of theoretically informed studies of European Union enlargement. It is an invaluable resource for students and researchers of European politics and international relations. Frank Schimmelfennig is Professor of European Politics at the Swiss Federal Institute of Technology, Zürich, and author of The EU, NATO and the Integration of Europe: Rules and Rhetoric (Cambridge University Press). Ulrich Sedelmeier is Associate Professor in International Relations and European Studies at the Central European University, Budapest, and author of the forthcoming Constructing the Path to Eastern Enlargement (Manchester University Press).

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3 Nationalism in Italian Politics The stories of the Northern League, 1980–2000 Damian Tambini

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24 Governing Europe Discourse, governmentality and European integration William Walters and Jens Henrik Haahr 25 Territory and Terror Conflicting nationalisms in the Basque country Jan Mansvelt Beck 26 Multilateralism, German Foreign Policy and Central Europe Claus Hofhansel 27 Popular Protest in East Germany Gareth Dale 28 Germany’s Foreign Policy towards Poland and the Czech Republic Ostpolitik revisited Karl Cordell and Stefan Wolff

29 Kosovo The politics of identity and space Denisa Kostovicova 30 The Politics of European Union Enlargement Theoretical approaches Edited by Frank Schimmelfennig and Ulrich Sedelmeier 31 Europeanizing Social Democracy? The rise of the party of European Socialists Simon Lightfoot 32 Conflict and Change in EU Budgetary Politics Johannes Lindner 33 Gibraltar, Identity and Empire Edward G. Archer

The Politics of European Union Enlargement Theoretical approaches

Edited by Frank Schimmelfennig and Ulrich Sedelmeier

First published 2005 by Routledge 2 Park Square, Milton Park, Abingdon, Oxon OX14 4RN Simultaneously published in the USA and Canada by Routledge 270 Madison Ave, New York, NY 10016 Routledge is an imprint of the Taylor & Francis Group This edition published in the Taylor & Francis e-Library, 2005. “To purchase your own copy of this or any of Taylor & Francis or Routledge’s collection of thousands of eBooks please go to www.eBookstore.tandf.co.uk.” © 2005 Frank Schimmelfennig and Ulrich Sedelmeier for selection and editorial matter; individual contributors their contributions All rights reserved. No part of this book may be reprinted or reproduced or utilised in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers. British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloging in Publication Data The politics of European Union enlargement: theoretical approaches/edited by Frank Schimmelfennig and Ulrich Sedelmeier. p. cm.–(Routledge advances in European politics; 30) Includes bibliographical references and index. 1. European Union–Membership. 2. Geopolitics–Europe. I. Schimmelfennig, Frank, 1963– II. Sedelmeier, Ulrich, 1967– III. Series. JN30.P6533 2005 341.242⬘2–dc22 2004028648 ISBN 0-203-00872-3 Master e-book ISBN

ISBN 0–415–36129–X (Print Edition)

Contents

List of tables List of figures List of contributors Preface and acknowledgements

ix xi xiii xv

PART I

Introduction 1 The politics of EU enlargement: theoretical and comparative perspectives

1

3

FRANK SCHIMMELFENNIG AND ULRICH SEDELMEIER

PART II

The politics of accession in applicant countries 2 Scandinavia and Switzerland: small, successful and stubborn towards the EU

31

33

SIEGLINDE GSTÖHL

3 The demand-side politics of EU enlargement: democracy and the application for EU membership

52

WALTER MATTLI AND THOMAS PLÜMPER

4 The struggle over EU enlargement: a historical materialist analysis of European integration

75

ANDREAS BIELER

PART III

The macro-politics of enlargement 5 Constructing institutional interests: EU and NATO enlargement KARIN M. FIERKE AND ANTJE WIENER

97 99

viii

Contents

6 Eastern enlargement: risk, rationality and role-compliance

120

ULRICH SEDELMEIER

7 The community trap: liberal norms, rhetorical action and the eastern enlargement of the European Union

142

FRANK SCHIMMELFENNIG

8 Liberal community and enlargement: an event history analysis

172

FRANK SCHIMMELFENNIG

9 Preferences, power and equilibrium: the causes and consequences of EU enlargement

198

ANDREW MORAVCSIK AND MILADA ANNA VACHUDOVA

10 Geopolitics and the eastern enlargement of the European Union

213

LARS S. SKÅLNES

PART IV

The substantive politics of enlargement

235

11 Sectoral dynamics of EU enlargement: advocacy, access and alliances in a composite policy

237

ULRICH SEDELMEIER

12 Institutions, policy communities and EU enlargement: British, Spanish and Central European accession negotiations in the agricultural sector

258

LORENA RUANO

PART V

Theory, enlargement and European integration

277

13 Deepening and widening integration theory

279

MARKUS JACHTENFUCHS

14 Enlarging the European Union: reflections on the challenge of analysis

287

HELEN WALLACE

Index

295

Tables

1.1 1.2 2.1 2.2 3.1 3.2 3.3 6.1 7.1 7.2 7.3 8.1 8.2 8.3 8.4 8.5 8.6 8.7 8.8 8.9 8.10 8.11 8.12 8.13 8.14 8.15 9.1 10.1

Dependent variables and comparative strategies in the enlargement literature Theoretical positions in the politics of EFTA and eastern enlargement Export shares of the internal market and estimated trade barriers Potential identity-related constraints to integration The impact of democracy on ‘institution-building’ market reforms across Central and Eastern European countries A summary Determinants of EU application: results from a Cox survival regression with time-varying co-variates Key dates in the eastern enlargement decision Member-state preferences on enlargement Member-state shares of EU exports to CEECs and EU economic output Data on the selection of CEECs for accession negotiations Independent variables Institutionalization model 1 Institutionalization model 2 Institutionalization model 3 Institutionalization model 4 Application model 1 Application model 2 Application model 3 Application model 4, EU Accession model 1 Accession model 2 Accession model 3 Exclusion model 1 Exclusion model 2 Exclusion model 3 Enlargement rounds and asymmetric interdependence EC trade with Eastern Europe, 1988–92

7 17 37 46 61 68 69 128 144 145 153 177 182 182 183 183 184 184 185 185 187 187 188 190 190 191 201 227

x

Tables

10.2 10.3 11.1 11.2 11.3

France’s trade balances (imports–exports) with Eastern Europe, 1989–92 French trade balances (imports–exports) in sensitive sectors, 1990–92 Influence of policy advocates on sectoral policies in a composite policy Likelihood of an accommodation of applicant preferences in sectoral policies if strongly opposed by sectoral interest groups Effect of the status of policy paradigms on the likelihood of accommodation

227 228 246 251 253

Figures

3.1 3.2

Political support and government’s choice of inefficient policies The impact of regime type on the support maximizing market distortion 3.3a Economic crisis and the reduction of market distortion in genuine democracies 3.3b Economic crisis and the reduction of market distortion in less democratic countries

64 65 66

66

Contributors

Andreas Bieler is a senior lecturer in the School of Politics at the University of Nottingham. Karin M. Fierke is a reader in the School of Politics and International Studies, Queen’s University, Belfast. Sieglinde Gstöhl is Professor at the College of Europe, Bruges. Markus Jachtenfuchs is Professor of Political Science at the International University, Bremen. Walter Mattli is University of Oxford Lecturer in International Relations. Andrew Moravcsik is Professor of Politics at Princeton University. Thomas Plümper is Assistant Professor at the Department of Politics and Management, University of Konstanz. Lorena Ruano is Professor of International Relations at the Centro de Investigación y Docencia Económicas (CIDE), Mexico City. Frank Schimmelfennig is Professor of European Politics at the Swiss Federal Institute of Technology, Zürich. Ulrich Sedelmeier is Associate Professor at the Department of International Relations and European Studies at the Central European University, Budapest. Lars S. Skålnes is Associate Professor of Political Science at the University of Oregon. Milada Anna Vachudova is Assistant Professor of Political Science at the University of North Carolina, Chapel Hill. Helen Wallace is Director of the Robert Schuman Centre for Advanced Studies, European University Institute. Antje Wiener is Professor in the School of Politics and International Studies, and Director of the Jean Monnet Centre of Excellence, Queen’s University, Belfast.

Preface and acknowledgements

This volume builds on contributions to a special issue of the Journal of European Public Policy (‘European Union Enlargement: Theoretical and Comparative Approaches’, vol. 9, no. 4, August 2002). We have complemented these contributions with articles published elsewhere and original articles with the aim of bringing together some of the key theoretically informed literature on EU enlargement. The special issue developed from a workshop ‘Governance by Enlargement’ at Darmstadt University of Technology in Germany in June 2000, funded by the Volkswagen Foundation’s ‘Global Governance’ programme, and benefited from Jean Monnet fellowships at the EUI’s Robert Schuman Centre in 2001–2. The Mannheim Centre for European Social Research (MZES) supported this volume with a visiting fellowship for Ulrich Sedelmeier in 2003 and agreed to pay the indexing costs. For the publication of this volume, we would like to thank Jeremy Richardson, the editor of JEPP, for his support, as well as Heidi Bagtazo, Harriet Brinton and Grace McInnes at Routledge, and two anonymous referees. For their help with obtaining permission to reprint original articles we are extremely grateful to Katie Halliday at Taylor & Francis, Liz Cooper at Oxford University Press, Anna Clifford at Sage, Andrzej Tymowski at the American Council of Learned Societies, and Christina Ellas at MIT Press Journals. We gratefully acknowledge the following permissions: From Taylor & Francis to reprint the following articles that originally appeared in the Journal of European Public Policy, http://www.tandf.co.uk/journals: ●

●

●

Frank Schimmelfennig and Ulrich Sedelmeier, ‘Theorising EU Enlargement: Research Focus, Hypotheses, and the State of Research’, Journal of European Public Policy, 9(4) (2002): 500–28. Sieglinde Gstöhl, ‘Scandinavia and Switzerland: Small, Successful and Stubborn towards the EU’, Journal of European Public Policy, 9(4) (2002): 529–49. Walter Mattli and Thomas Plümper, ‘The Demand-Side Politics of EU Enlargement: Democracy and the Application for EU Membership’, Journal of European Public Policy, 9(4) (2002): 550–74.

xvi Preface and acknowledgements ●

●

●

●

●

●

Andreas Bieler, ‘The Struggle over EU Enlargement: A Historical Materialist Analysis of European Integration’, Journal of European Public Policy, 9(4) (2002): 575–97. Frank Schimmelfennig, ‘Liberal Community and Enlargement: An Event History Analysis’, Journal of European Public Policy, 9(4) (2002): 598–626. Ulrich Sedelmeier, ‘Sectoral Dynamics of EU Eastern Enlargement: Advocacy, Access and Alliances in a Composite Policy’, Journal of European Public Policy, 9(4) (2002): 627–49. Markus Jachtenfuchs, ‘Deepening and Widening Integration Theory’, Journal of European Public Policy, 9(4) (2002): 650–7. Helen Wallace, ‘Enlarging the European Union: Reflections on the Challenge of Analysis’, Journal of European Public Policy, 9(4) (2002): 658–65. Karin Fierke and Antje Wiener, ‘Constructing Institutional Interests: EU and NATO Enlargement’, Journal of European Public Policy, 6(5) (1999): 721–42.

The following material is reproduced by permission of Oxford University Press, www.oup.com: ●

Ulrich Sedelmeier, ‘Eastern Enlargement’, from Risk, Reforms, Resistance and Revival (The State of the European Union, vol. 5, 2000), ed. Maria Green Cowles and Michael Smith.

The American Council of Learned Societies granted permission to reproduce the following article: ●

Andrew Moravcsik and Milada Vachudova, ‘National Interests, State Power and EU Enlargement’, East European Politics and Societies, 17(1) (2003), 42–57.

MIT Press Journals granted permission to reprint the following article: ●

Frank Schimmelfennig, ‘The Community Trap: Liberal Norms, Rhetorical Action, and the Eastern Enlargement of the European Union’, International Organization, 55(1) (2001), pp. 47–80. © 2001 by the IO Foundation and the Massachusetts Institute of Technology. Frank Schimmelfennig and Ulrich Sedelmeier, Mannheim and Budapest

Part I

Introduction

1

The politics of EU enlargement Theoretical and comparative perspectives1 Frank Schimmelfennig and Ulrich Sedelmeier

The study of enlargement: political relevance, theoretical neglect and methodological shortcomings The enlargement of the European Union (EU) is a key political process, both for the EU and for international relations in Europe. While enlargement was a sporadic event for much of the EU’s history, the end of the Cold War dramatically increased its salience and established it as a permanent item on the EU’s agenda. Three members of the European Free Trade Area (EFTA) joined in 1995 (Austria, Sweden, Finland). Eight Central and Eastern European countries (CEECs) – the Czech Republic, Estonia, Hungary, Poland, Latvia, Lithuania, Slovenia, Slovakia – plus Cyprus and Malta acceded in May 2004. Bulgaria and Romania are currently engaged in accession negotiations and had 2007 confirmed as a plausible date for membership. The Commission has cautiously recommended opening accession negotiations with Turkey. The EU has also acknowledged the membership perspective of the countries of the western Balkans and the Commission issued a positive opinion on Croatia’s application. The EU’s transformation from an exclusively West European organization into the centre of gravity of pan-European institution-building makes it a dominant locus of domestic policy-making and transnational relations for the entire region. ‘Europe’ is increasingly defined in terms of the EU; the ‘Europeanization’ or ‘Europeanness’ of individual countries has come to be measured by the intensity of institutional relations with the EU and by the adoption of its organizational norms and rules (see, e.g., Katzenstein 1997b: 262; Schimmelfennig and Sedelmeier 2005). EU enlargement has far-reaching implications not only for the political shape of Europe but also for the EU’s institutional set-up and its major policies. In the case of eastern enlargement, this was reflected in the tough intra-EU negotiations over the budget, the agricultural and regional policies, and the representation of members in EU institutions. In light of its political relevance, it is striking that EU enlargement has been a largely neglected issue in the theory of regional integration (see also Friis and Murphy 1999; Wallace 2000). The classical approaches to the study of integration such as neo-functionalism and transactionalism mentioned the geographical

4 Frank Schimmelfennig and Ulrich Sedelmeier growth of international communities only in passing (see Deutsch 1970: 4, 43–4; Haas 1968: 313–17; Schmitter 1969: 165). This is not surprising: analysing the establishment and stabilization of regional organizations logically precedes studying their territorial expansion. Moreover, the heyday of regional integration theory had come to an end before the EU’s first enlargement in 1973.2 In addition, the subsequent move towards the analysis of substantive policies and the adoption of theoretical frameworks from comparative politics (such as neo-corporatism and network analysis) did little to further research on such a polity-building issue as enlargement (see Friis and Murphy 1999: 213). It is more surprising that the revival of regional integration studies in the early 1990s and the theoretical debate between ‘intergovernmentalism’ and ‘supranationalism’ still focused exclusively upon such issues of ‘deepening’ as the Single European Act, Economic and Monetary Union (EMU), or legal integration. The increased salience of enlargement since the end of the Cold War resulted in a sizeable body of literature. While much of this literature consists of descriptive studies of single cases – such as single enlargement rounds, single countries, or single policy areas – the EFTA and eastern enlargement have also triggered theory-oriented work. These analyses have started to address a number of weaknesses that have characterized the study of enlargement, namely (1) an insularity of the study of EU enlargement which divorced it from the study of other international organizations; (2) the lack of comparative research designs; (3) an underspecification of dependent variables and a neglect of important dimensions of enlargement; and (4) an underspecification of explanatory factors or independent variables, and a subsequent neglect of exploring alternative explanations. Yet more work in this direction is necessary to make the insights of these studies more generalizable and thus to contribute to our cumulative understanding of enlargement. The goal of this volume is to bring together in a systematic form the insights from recent theoretically informed studies of EU enlargement. These studies provide examples of comparativist and statistical analyses of EU enlargement and explore under-researched aspects of the enlargement process. More generally, they contribute to the debate between rationalist and constructivist analyses in international relations (IR) theory. This introductory chapter makes three main contributions to structuring the study of EU enlargement. First, we provide a conceptualization of enlargement that relates EU enlargement to the study of international organizations more broadly. We thus define EU enlargement as a process of gradual and formal horizontal institutionalization. We then distinguish four main dimensions of a thus-defined enlargement, draw out the key research questions in each of them, and propose comparative research strategies to address them. Our second goal is theory development. We suggest that, rather than striving for some kind of ‘enlargement theory’, it is more fruitful to link up the study of enlargement (as institutionalization) with the study of institutions in IR and European integration studies. Drawing on two basic approaches to the analysis of international organizations – rationalist and sociological or constructivist institutionalism – we

The politics of EU enlargement 5 derive core hypotheses on the conditions of enlargement. Finally, we demonstrate the usefulness of these theoretical approaches in structuring the debate in an overview of the state of research on EU enlargement.

Enlargement: definition and research focus Definition Even though this is a book on the enlargement of the EU, our conceptual and theoretical focus is more general. To encourage comparative analysis, our definitions, research foci, and hypotheses can also be applied to the enlargement of other regional organizations. We propose to define the enlargement of an organization as a process of gradual and formal horizontal institutionalization of organizational rules and norms. Institutionalization means the process by which the actions and interactions of social actors come to be normatively patterned. The difference between ‘horizontal’ and ‘vertical’ institutionalization corresponds to the common usage of ‘widening’ and ‘deepening’. Horizontal institutionalization takes place when institutions spread beyond the incumbent actors, that is, when the group of actors whose actions and relations are governed by the organization’s norms becomes larger. Organizational membership and organizational norms are formally defined. It is therefore reasonable to concentrate on formal and purposive acts of horizontal institutionalization such as the conclusion of association agreements or the signing and coming into effect of accession treaties. However, organizational norms also spread informally (‘diffuse’) beyond the boundaries of the organization, both to aspiring members and to states that have no intention to join. Such diffusion might result from unilateral adaptation in order to mitigate negative externalities of regional integration itself, or from a convergence of practices when non-members consider institutional templates of the organization as viable responses to broader systemic challenges. We suggest focusing on purposive alignment with organizational rules, either more narrowly with a view to accession, or more broadly when changes in institutional practices are a direct response to regional integration. Horizontal institutionalization is a matter of degree, and enlargement is best conceptualized as a gradual process that begins before, and continues after, the admission of new members to the organization. Even in the absence of full membership, outside actors might follow certain organizational norms and rules. Non-members align with organizational rules as a result of the organization’s accession conditionality, or because these rules are embodied in formal agreements that create an institutional relationship short of full membership, such as association agreements or agreements to participate in selected policies of the organization (e.g., the European Economic Area (EEA) agreement or the Swiss treaties with the EU). Conversely, new members of the organization may negotiate post-accession transition periods before applying some of its norms, or they might begin to participate in some of the organization’s policies at different times – as in EMU or the Schengen Agreement.

6 Frank Schimmelfennig and Ulrich Sedelmeier What are the consequences of such a definition of enlargement? First, by defining enlargement as institutionalization, we establish an explicit link to the study of institutions and open the analysis of enlargement to theories about the establishment and effects of institutions. Second, it widens the field of enlargement studies beyond the narrow focus on decisions about formal membership. Such a wider focus includes, for example, horizontal institutionalization short of membership, the expansion of the organization’s substantive policies, and the impact of horizontal institutionalization in the applicants, the member states, and the organization itself. Research focus: dimensions of enlargement, dependent variables, and comparative strategies We can distinguish four main dimensions or aspects of enlargement, which generate separate dependent variables for the study of enlargement. The literature on EU enlargement has focused primarily on three dimensions of enlargement. These dimensions concern the politics of EU enlargement: they analyse the process leading to enlargement, or to decisions on formal acts of horizontal institutionalization. These dimensions could be labelled respectively as (1) applicants’ enlargement politics, (2) member state enlargement politics, and (3) EU enlargement politics. We suggest that, in the last case, it is useful to distinguish between the macro- or polity dimension and the substantive or policy dimension. While these three dimensions of the politics of EU enlargement are the main focus of this volume, a further dimension started to receive more attention only recently: (4) the impact of enlargement, i.e., the effects of these formal acts of horizontal institutionalization. In this subsection, we identify the main research questions in each of these main dimensions of enlargement in order to encourage a clearer specification of dependent variables, which should facilitate debate and make research results more comparable. Moreover, we observe that, to the extent that theoretical studies exist, they have been primarily single case studies. We thus suggest how in each dimension a broadening of the empirical focus can lead to a more comparative research design towards more cross-sectional and longitudinal studies.3 Crosssectional studies compare the politics of different applicants and member states, the EU and other regional organizations, diverse policy areas, and the impact of enlargement in different domestic and international settings. Longitudinal studies take the comparison further to the study of applicant and member-state politics over time, the analysis of different enlargement rounds, and short-term and longterm impacts. Table 1.1 maps the state of the literature on the basis of these suggestions about dependent variables and comparative strategies.4 (1) Applicant enlargement politics The basic question with regard to this dimension is why and under which conditions non-members seek accession to a regional organization. Since horizontal

The politics of EU enlargement 7 Table 1.1 Dependent variables and comparative strategies in the enlargement literature Single case Applicants’ politics

Memberstate politics

Hyde-Price 2000; Tewes 1998; Collins 2002

EU macropolitics

Friis 1998a, 1998b; Schimmelfennig ch. 7; Sedelmeier ch. 6; Moravcsik and Vachudova; Skålnes

EU substantive politics Impact of enlargement

Cross-sectional comparison

(Cross-sectional and) longitudinal comparison

Bieler 2000; Fioretos 1997; Ingebritsen 1998; Smith 1999; Mattli and Plümper; Gstöhl

Mattli 1999; Schimmelfennig ch 8; Bieler

Fierke and Wiener; Schimmelfennig ch. 8

Haggard et al. 1993; Papadimitriou 2002; Torreblanca 2001; Sedelmeier ch. 11 Falkner 2000

Ruano

Börzel 1999; Schimmelfennig and Sedelmeier 2005

institutionalization does not result only from full membership in a regional organization, the broader question is under which conditions outsiders pursue a change in their institutional relationship with the regional organization and what kind of institutional relationship they prefer. Especially with regard to the EFTA enlargement, there is already a sizeable body of theoretically informed literature, which goes beyond single cases and uses cross-sectional comparisons within the same enlargement round. These insights can be improved through longitudinal comparisons across enlargement rounds (Mattli 1999; Bieler ch. 4 this volume; Schimmelfennig ch. 8 this volume) and comparisons with cases of countries that chose not to join (Gstöhl ch. 2 this volume) or to apply (Mattli and Plümper ch. 3 this volume). (2) Member-state enlargement politics The main question is under which conditions a member state of a regional organization favours or opposes enlargement to a particular applicant country. Theoretical studies of this dimension usually focus on single member states (Collins 2002; Hyde-Price 2000; Tewes 1998). Even descriptive studies that compare more than one member state are extremely rare (Lippert et al. 2001). More systematic insights could be gained from comparisons of more member states and/or across enlargement rounds. Furthermore, while studies of this dimension of enlargement have concentrated mainly on member states, the focus

8 Frank Schimmelfennig and Ulrich Sedelmeier could be broadened to analyse actors within the regional organization other than national governments, such as institutional actors. (3) EU enlargement politics Under which conditions does the regional organization admit a new member, or modify its institutional relationship with outside states? There are two analytically separate dimensions to this question, which relate to the macro-dimension and the substantive dimension of enlargement respectively. The macro-dimension relates to the EU as a polity and concerns the question of candidate selection and patterns of national membership of the organization. The main questions are why the organization prefers to admit one state rather than another and why it offers membership rather than some other form of (or no) institutional relationship. While there is an emerging body of theoretical literature on this dimension, studies have focused on single cases, mainly eastern enlargement (Friis 1998a, 1998b; Moravcsik and Vachudova ch. 9 this volume; Schimmelfennig 1998, ch. 7 this volume; Sedelmeier forthcoming, ch. 6 this volume; Sjursen 2002; Skålnes ch. 10 this volume). Preston (1997) provides a rare, but still predominantly descriptive, comparative analysis of successive EU enlargements. There are some cross-sectional comparisons with the same enlargement round of other international organizations, mainly between the eastern enlargements of the EU and NATO. However, most of these studies are fairly descriptive (Croft et al. 1999, Smith and Timmins 2000; Sperling 1999) and only few are theoretical (Fierke and Wiener ch. 5 this volume; Schimmelfennig ch. 8 this volume, 2003). For such cross-sectional and longitudinal comparisons, the basic question concerns variations in the pattern of organizational size and national membership. Why are some states more integrated than others, and why are they members of one organization but not of another? Why do some organizations have a larger membership and expand more quickly than others? The substantive or policy dimension of EU politics concerns the concrete substance of the organizational rules that are horizontally institutionalized. Theoretical analyses of the macro-dimension have often neglected this dimension (but see Sedelmeier 1998, forthcoming). Studies of the substantive dimension seek to explain the specific outcomes of accession negotiations in distinctive policy areas, but also the nature of pre-accession conditionality or association policies (Friis 1998c; Jileva 2004; Smith 1998; Torreblanca 2001). The key question is to what extent outcomes reflect the preferences of certain actors, such as the applicants, member states, societal interest groups, or institutional actors. Explicitly comparative theoretically oriented studies in this dimension are rare. In the case of eastern enlargement, most cross-sectional comparisons focus on variations in outcomes across different policy areas (Haggard et al. 1993; Papadimitriou 2002; Sedelmeier ch. 11 this volume). However, trade liberalization between the EU and the CEEC candidates could be also analysed in a comparison with negotiations between the USA and Mexico in NAFTA (Phelan 2004). Even rarer are longitudinal studies

The politics of EU enlargement 9 that compare policy outcomes in one issue area across enlargement rounds (Ruano ch. 12 this volume). (4) Impact of enlargement Enlargement affects both the organization and the state to which its institutional rules are extended. Frequent questions are how enlargement affects the distribution of power and interests in the organization and its effectiveness and efficiency (see, e.g., Steunenberg 2002); how enlargement influences the organization’s identity, norms, and goals; and what is the effect of a widening of membership on the prospects for a deepening of integration within the organization. However, most relevant for the study of horizontal institutionalization is the impact of enlargement on new members and non-members. Here, the main questions are: How does enlargement change the identity, the interests, and the behaviour of governmental and societal actors? Under which conditions do they conform to the norms of the organization? This dimension has been relatively neglected in theoretical studies of enlargement. The literature on ‘Europeanization’ has analysed the effects of membership on new members, but mainly in single case studies (Falkner 2000) or comparisons between new and ‘old’ member states (Börzel 1999). Only recently have their insights been applied to study the pre-accession effects on candidate countries. Some studies of eastern enlargement have combined insights from theoretical studies of the impact of international organizations, the Europeanization literature, and the literature on the transformations in the CEECs (e.g., Goetz 2001; Grabbe 2001; Jacoby 2004; Kelley 2004; Schimmelfennig and Sedelmeier 2005; Vachudova 2005). Such studies have redressed the picture of a mainly descriptive literature on the effect of the EU on the candidates, which was often limited to single countries and single policy areas. While we emphasize that this is a central dimension of enlargement, which requires more research, the contributions in this volume focus on various dimensions of the politics of EU enlargement.

Theoretical approaches to enlargement: rationalism, constructivism, and hypotheses for enlargement We propose to embed the analysis of enlargement in the current IR debate between rationalist and sociological or constructivist institutionalism (see, e.g., Katzenstein et al. 1999; on its relevance for EU studies, Christiansen et al. 1999; Aspinwall and Schneider 2001). This debate offers a broad spectrum of assumptions and hypotheses about the conditions of institutionalization and about institutional effects. It spans the two disciplines that have contributed most to the social science analysis of institutions: economics and sociology. Furthermore, linking the study of enlargement to the analysis of institutions in IR and the general social sciences prevents theoretical insularity. Finally, it is our impression that the growing body of theoretically oriented work on enlargement fits in well with this debate. After

10 Frank Schimmelfennig and Ulrich Sedelmeier briefly outlining the theoretical foundations of both institutionalist approaches, we specify hypotheses for the dimensions or dependent variables in the study of enlargement. Theoretical foundations Rationalism and constructivism do not provide us with fully elaborated and internally consistent competing hypotheses on enlargement that we could rigorously test against each other: first, both rationalism and constructivism are social metatheories defined by a set of (mainly ontological) assumptions about the social world rather than by specific hypotheses. There is a variety of substantial theories based on either rationalist or constructivist assumptions that attribute preferences and outcomes to different factors and lead to different and even contradictory expectations about enlargement. Second, the differences between rationalist and sociological theories of institutions are multidimensional and often a matter of degree rather than principle. It is therefore more useful to regard the two institutionalisms as partially competing and partially complementary sources of theoretical inspiration for the study of enlargement (on synthesis between different institutionalisms, see, e.g., Jupille et al. 2003). In the following, we will nevertheless construct two ideal types of a rationalist and a sociological analysis of enlargement in order to portray the theoretical alternatives as clearly as possible. At the most fundamental level, rationalist and constructivist institutionalism are based on different social ontologies (individualism and materialism in rationalism and a social and ideational ontology in constructivism) and assume different logics of action – a rationalist logic of consequentiality opposed to a constructivist logic of appropriateness (March and Olsen 1989: 160). These divergent premises are reflected in different perspectives on the causal status and purposes of international organizations which, in turn, lead to competing hypotheses about the rationale, the conditions, and the mechanisms of enlargement. In rationalist institutionalism, the causal status of institutions generally remains secondary to that of individual, material interests. Institutions are treated as intervening variables between the material interests and the material environment of the actors, on the one hand, and the collective outcomes, on the other. They provide mainly constraints and incentives, not reasons, for action; they alter cost– benefit calculations, not identities and interests. By contrast, in the constructivist perspective, institutions shape actors’ identities and interests. Actors do not simply confront institutions as external constraints and incentives towards which they behave expediently. Rather, institutions provide meaning to the rights and obligations entailed in their social roles. Actors conform with institutionally prescribed behaviour out of normative commitment or habit.5 The different conceptions of institutions are reflected in the functions and workings that both theories typically ascribe to international organizations. In the rationalist account, international organizations are instrumental associations designed to help states pursue their interests more efficiently. According to Abbott and Snidal (1998), they are attractive to states because of two functional

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characteristics that reduce transaction costs: centralization and independence. International organizations render collective action more efficient, e.g., by providing stable negotiating forums, pooling activities, elaborating norms, and acting as a neutral information provider, trustee, allocator, or arbiter. Moreover, states pool and delegate authority to international organizations in order to ‘constrain and control one another’ (Moravcsik 1998: 9). By removing the interpretation, implementation, and enforcement of agreements from the reach of domestic opposition and from the unilateral control of state governments, international organizations raise the visibility and the costs of non-compliance (ibid.: 73–4). Rationalist IR theories generally do not accord international organizations the status of purposive and autonomous actors in international politics. Although the economic theory of bureaucracy suggests that international agencies try to maximize their resources and turf, these theories regard the states’ concern for autonomy as too strong, and the power of international bureaucracy as too limited, for international organizations to represent anything but the instruments of states. Moreover, rationalist theories conceive international organizations as clubs, that is, voluntary groups ‘in the sense that members would not join (or remain in the club) unless a net gain resulted from membership’ (Sandler and Tschirhart 1980: 1491). Whereas rationalist institutionalism emphasizes the instrumental, regulatory, and efficiency-enhancing functions of international organizations, sociological institutionalism sees them as autonomous and powerful actors with constitutive and legitimacy-providing functions. International organizations are ‘community representatives’ (Abbott and Snidal 1998: 24) as well as community-building agencies. Their origins, goals, and procedures are more strongly determined by the standards of legitimacy and appropriateness of the international community they represent (and which constitute their cultural and institutional environment) than by the utilitarian demand for efficient problem-solving (see, e.g., Barnett and Finnemore 1999: 703; Katzenstein 1997a: 12; Weber 1994: 4–5, 32). International organizations ‘can become autonomous sites of authority . . . because of power flowing from at least two sources: (1) the legitimacy of the rational-legal authority they embody, and (2) control over technical expertise and information’ (Barnett and Finnemore 1999: 707). Due to these sources of power, international organizations are able ‘to impose definitions of member characteristics and purposes upon the governments of its member states’ (McNeely 1995: 33; cf. also Finnemore 1996). For instance, they ‘define international tasks [and] new categories of actors . . . create new interests for actors . . . and transfer models of political organizations around the world’ (Barnett and Finnemore 1999: 699). On the basis of these theoretical foundations, we present some core rationalist and constructivist hypotheses for the enlargement of international organizations. Rationalist hypotheses Rationalist explanations of enlargement involve two steps: first, the explanation of applicant and member state enlargement preferences and, second, the explanation of organizational collective enlargement decisions at the macro- and policy levels.

12 Frank Schimmelfennig and Ulrich Sedelmeier Applicant and member state politics As in all rationalist theory, expected individual costs and benefits determine the applicants’ and the member states’ enlargement preferences. States favour the kind and degree of horizontal institutionalization that maximizes their net benefits. More specifically, a member state favours the integration of an outsider state – and an outsider seeks to expand its institutional ties with the organization – under the conditions that it will reap positive net benefits from enlargement, and that these benefits exceed the benefits it would secure from an alternative form of horizontal institutionalization. This general hypothesis, however, begs the question of what the relevant costs and benefits are. In this respect, rationalist hypotheses vary to a great extent. First, we can distinguish three categories of costs and benefits thought to be most relevant for the enlargement preferences of applicants and members. These are transaction (or management), policy, and autonomy costs and benefits. Transaction costs rise for the member states because additional members require additional organizational infrastructure and make communication within the organization more cumbersome and costly. Additional members usually also increase the heterogeneity of the membership, and ‘the costs of centralized decisions are likely to rise where more and more persons of differing tastes participate’ (Sandler et al. 1978: 69). Applicants have to establish delegations at the headquarters of the organization and incur costs of communication, coordination, and supervision in the relations between these delegations and capitals. These costs are balanced by benefits such as the provision of organizational services to the member states and faster communication and coordination between incumbents and new member states. For the member states, policy costs come in the form of crowding because, in an enlarged organization, they have to share collective goods with the new members. For the applicants, policy costs involve membership contributions and the adaptation of domestic policies (see Mattli and Plümper ch. 3 this volume). Conversely, the incumbent members obtain policy benefits from the contributions of new members to the club goods, and applicants can expect to benefit from being able to participate in the club goods. Autonomy costs arise because horizontal institutionalization implies foregoing unilateral policy options both for the member states and for the applicants. For member states, which have already lost policy-making autonomy in the integrated issue areas, autonomy costs mainly consist in having to accord new members equal decision-making rights. In general, under the EU’s qualified majority voting rule, the individual member states’ degree of control over outcomes decreases with enlargement (see, e.g., Kerremans 1998). In return, member states may gain better control over external political developments in the applicant states. For the latter, the greatest cost is the loss of policy-making autonomy as a result of membership. This loss, however, can be balanced by both the right to participate in organizational decision-making and the protection of state autonomy provided by the organization against other states or domestic society. Second, rationalist IR theories differ with regard to the kind of cost–benefit

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calculations that states typically make (see, e.g., Baldwin 1993; Hasenclever et al. 1997: chs 3–4). Neo-liberal institutionalists assume that states care mainly about their own absolute gains and losses. Whereas enlargement must result in net welfare benefits in order to find support, autonomy benefits and costs are secondary. By contrast, realists assume that state actors are concerned mainly with external autonomy and power. In international cooperation, they worry about the distribution of benefits among the participating states, because the relative gains and losses vis-àvis other states will affect their future international power position and security. Correspondingly, a member state favours enlargement, and a non-member state bids to join an international organization, if this is a necessary and efficient means to balance the superior power or threat of a third state (or coalition of states) or to increase its own power (see, e.g., Walt 1987; Waltz 1979: 117–27). A third strand of rationalist institutionalism assumes that states are indeed most concerned about their autonomy, but not so much vis-à-vis other states as in relation to their own societies (Vaubel 1986; Wolf 1999). Focusing on applicant states, Mattli (1999) integrates both external and internal autonomy concerns: state leaders will be willing to bear the autonomy costs of integration only in order to retain political power. Assuming that a government’s re-election chances will depend mainly on economic performance, ‘a country seeks to integrate its economy only when there is a significant positive cost of maintaining its present governance structure in terms of foregone growth (as measured by a continuing performance gap between it and a more integrated rival governance structure)’ (Mattli 1999: 81; see also Mattli 2000). The third difference concerns the material conditions that determine a state’s cost–benefit calculations. Rationalist approaches to enlargement have identified various sources of enlargement preferences. Among these are general systemic conditions, such as changes in the world economy, in technology, or the security environment – for instance, the denationalization of the economy creates incentives for joining an international economic organization. Then there are organization-specific systemic conditions, such as the degree of integration of the organization – for example, the deepening of economic integration in the organization will create negative externalities for outsiders (diversion of trade and investment) and trigger demand for membership. Alternatively, a high degree of integration may deter states that value autonomy highly. Also involved are the positional characteristics of states, such as the extent of their economic dependence on a regional organization or their geographical position – for instance, the more trade dependent a state is on the members of an economic union, the stronger its demand for membership. Finally there are subsystemic conditions and domestic structure, such as the relative strength of economic sectors or factors – for instance, the stronger the capital- or exportoriented sectors, the greater the demand for integration. EU macro- and substantive politics According to club theory, the most pertinent rationalist approach to the optimal size of organizations is that the organization expands its institutions and membership if, for both the member states and the applicant states, the marginal benefits of enlargement exceed the

14 Frank Schimmelfennig and Ulrich Sedelmeier marginal costs. In the club-theoretical perspective, enlargement will continue until marginal costs equal marginal benefits. This equilibrium indicates the optimal size of the organization (Buchanan 1965: 5; Padoan 1997: 118). However, the outcomes of organizational enlargement politics also depend on (1) constellations of bargaining power and (2) formal decision-making rules. It is not necessary that enlargement as such is beneficial to each member. Enlargement can also result from unequal bargaining power among the incumbents.6 Member states that expect net losses from enlargement will agree to enlargement if their bargaining power is sufficient to obtain full compensation through sidepayments by the winners (which, in turn, requires that the necessary concessions do not exceed the winners’ gains from enlargement). Otherwise, the losers will consent to enlargement if the winners are able to threaten them credibly with exclusion (and if the losses of exclusion for the losers exceed the losses of enlargement). The other factor to take into account is formal decision-making rules. In general, enlargement requires the consensus of all member states. In the EU, three further extensions have to be taken into account. First, accession and association treaties have to be ratified by national parliaments and accession treaties must or can be subjected to a referendum in the applicant countries as well as in some of the member states. Second, association and accession require the consent of the European Parliament (EP) under the assent procedure.7 Finally, EU policies that are affected by enlargement (such as agriculture, trade, or regional policies) are governed by different policy rules and decision-making procedures. These rules and procedures privilege individual governments and interest groups in the distributional politics of enlargement (see Wennerlund 2000). Constructivist hypotheses In contrast to rationalist hypotheses, sociological explanations of enlargement usually start not with actor preferences but at the systemic, ‘organizational’ level. However, to the extent that they allow for ideational conflict, the differentiation between the state level and the EU level can be upheld. According to constructivist institutionalism, enlargement politics will generally be shaped by ideational, cultural factors. The most relevant of these factors is ‘community’ or ‘cultural match’ (see, e.g., Checkel 1999; Cortell and Davis 2000), that is, the degree to which the actors inside and outside the organization share a collective identity and fundamental beliefs. Studying enlargement in a constructivist perspective, then, consists primarily in the analysis of social identities, values, and norms, not in the material, distributional consequences of enlargement for individual actors. Applicant and member-state politics Applicants and members ‘construct’ each other and their relationship on the basis of the ideas that define the community represented by the international organization. Whether applicant and member states regard enlargement as desirable

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depends on the degree of community they perceive to have with each other. The general hypotheses about applicant and member-state politics are highly similar: The more an external state identifies with the international community that the organization represents and the more it shares the values and norms that define the purpose and the policies of the organization, the stronger the institutional ties it seeks with this organization and the more the member states are willing to pursue horizontal institutionalization with this state. With regard to the EU, applicant and member-state politics are about whether an applicant state is ‘European’, subscribes to the integrationist project of an ‘ever closer union’, adheres to the liberal-democratic political value foundations of the EU, or shares the norms underlying specific EU policies (see Gstöhl ch. 2 this volume). Depending on the extent of the domestic consensus on the applicant state’s identity and policy norms, applicant politics will be more or less controversial and the resulting enlargement preferences will be more or less stable and strong. On average, in the constructivist perspective, we would expect greater conflict within applicant states on the enlargement issue than within the member states. First, for an applicant state, the decision to join a regional organization, and in particular the EU, constitutes a major political reorientation, whereas, for the member states, the decision to enlarge an existing organization is more a matter of policy continuity. Second, member states can be assumed to share the constitutive values and norms of their community organization and to have been exposed, for a certain time, to socialization within the organization. EU macro- and substantive politics Correspondingly, and in contrast to rationalist institutionalism, we would expect a low degree of variation among preferences and conflict among the member-state actors. As sociological institutionalism often assumes strong institutional and cultural effects (‘socialization’ or ‘Europeanization’) at the systemic level, member states will have largely homogeneous enlargement preferences. If we relax this assumption, we expect to see more variation in preferences. First, if there is tension among the community values and norms, then there will not be a single, unambiguous standard shaping the enlargement preferences of the incumbents. The debate about the priority between deepening or widening in the EU is a case in point. Second, identification with, and internalization of, the community values and norms may vary not only among the external states but also among the community actors. Whereas we can expect, for instance, the organizational actors (such as the European Commission) to hold preferences that are strongly influenced by the organizational norms, member-state governments may be subject to partly competing influences from national and international identities as well as cultural and institutional environments. Finally, the resonance of particular organizational norms might vary across different groups of policymakers, depending on their functional and organizational positions. This potential tension is particularly important for the policy dimension of enlargement. While more general organizational norms and constitutive values might have a stronger

16 Frank Schimmelfennig and Ulrich Sedelmeier impact on the macro-politics of enlargement, distinctive substantive policies might be shaped to a larger extent by the particular norms (or policy paradigms) underpinning the policy area in question (Sedelmeier forthcoming, ch. 11 this volume; Ruano ch. 12 this volume). Even in the case of normative conflict within the organization, however, the decision-making process will not be a bargaining process but a process of arguing (see, e.g., Risse 2000). If, for instance, it is unclear or contested which community norm applies in a given situation, whether organizational norms override conflicting national norms, or to what degree an external state shares the fundamental beliefs and adheres to the fundamental practices of the community, the actors engage in discourse. They challenge the validity claims of the other actors’ preferences and definitions of the situation, put forward arguments in favour of their positions, and seek a consensus based on the better argument. Although it cannot always be determined theoretically what the best and convincing argument will be in a given situation, it should be one that is based on the collective identity, the constitutive beliefs and practices of the community, and the norms and rules of the organization. More fundamentally, arguing and discourse have the potential to modify old, or construct new, identities and norms. Incumbents and outsiders continuously seek to define and redefine the boundaries of the community, between ‘us’ and ‘them’, and to interpret and reinterpret the organizational norms. As a result, we will observe change in the definition or extension of the international community and in its enlargement practices. Eventually, the outcome of organizational politics will again depend on the degree of community and cultural or normative match. The organization expands (its institutions) to outside states to the extent that these states share its collective identity, values, and norms. The higher the degree of community and the better the cultural or normative match, the faster and the deeper will be the process of horizontal institutionalization. Enlargement will continue until the (cultural) borders of the international community and the (formal, institutional) borders of the international organization match. More generally, the differentiated pattern of institutional relationships between the organization and the states in its environment will be congruent with their differentiated degree of cultural and normative agreement.

The state of research: focus and controversies in EFTA and eastern enlargement Table 1.1 (above) reflects that theory-oriented research on enlargement has concentrated on the two major processes of the 1990s: the 1995 enlargement to include three former EFTA members and the ongoing process of eastern enlargement. Only very few authors examine earlier enlargement rounds and compare them with subsequent enlargements (Ruano ch. 12 this volume). Analyses of EFTA and eastern enlargement reveal quite different patterns. Table 1.1 shows that the dominant research focus in the two cases has been on different dimensions of enlargement. While research on EFTA enlargement has concentrated on applicant politics, studies of eastern enlargement have predomi-

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nantly analysed EU (macro-)politics. In addition, we observe different patterns in the theoretical debates between competing explanations in the two cases (see table 1.2). In the case of EFTA enlargement, rationalist explanations dominate and the controversies are mainly among factors that all fit within a rationalist framework. By contrast, sociological factors (values and norms) have figured more prominently in accounts of eastern enlargement. In this section, we review, and place into context, the previously rather disjointed theoretical literature on EU enlargement. We do not intend to present a comprehensive overview of enlargement research, but aim to indicate major tendencies and controversies and to locate the contributions to this volume within the literature. Our review demonstrates that the rationalist/constructivist debate is a useful way to structure and organize these controversies. However, we do not intend systematically to test the hypotheses that we derived in the previous section in the cases of EFTA and eastern enlargement. Rather, we point out where controversies in the study of enlargement reflect this debate. We reiterate that we do not conceive of the debate as mutually exclusive explanations. Many of the contributions combine rationalist and constructivist insights. At the same time, our overview demonstrates that debates on some aspects of individual enlargement rounds can plausibly be conducted exclusively in a rationalist, and on others in a constructivist framework.

Table 1.2 Theoretical positions in the politics of EFTA and eastern enlargement Rationalist

Constructivist

Applicants’ politics

Bieler 2000; Fioretos 1997; Ingebritsen 1998; Mattli 1999; Smith 1999; Bieler (structure of production process); Mattli and Plümper (domestic reform incentives); Moravcsik and Vachudova (national interest and bargaining power)

Gstöhl (national identity)

Member-state politics

Collins 2002

Hyde-Price 2000; Tewes 1998

EU macropolitics

Friis 1998a, 1998b; Moravcsik and Vachudova (national interest and bargaining power); Skålnes (geopolitics)

EU substantive Haggard et al. 1993; politics Ruano (institutional structures)

Friis 1998c; Fierke and Wiener (Western Cold War promises in the CSCE Helsinki declaration); Sedelmeier ch. 6 (EU identity construction vis-à-vis CEECs); Schimmelfennig chs 7, 8 (democratic community) Sedelmeier ch. 11 (policy paradigms)

18 Frank Schimmelfennig and Ulrich Sedelmeier EFTA enlargement Systemic factors underpinning applicant enlargement politics The main puzzle that studies of the EFTA enlargement identify concerns the applicants’ enlargement politics (but see Friis 1998a). Thus, the key question pursued is: why at the beginning of the 1990s did the EFTA countries, after a long period of deliberate non-membership, develop an interest in closer ties with, and membership in, the EU? There is a broad agreement in the literature that three major developments at the systemic level that fit well with a rationalist framework can account for the timing of the EFTA countries’ interest in EU membership. The end of the Cold War removed an obstacle to EU membership, since the majority of the EFTA countries (except for Iceland and Norway) were neutral and non-aligned (Ingebritsen 1998: 10; Mattli 1999: 88). Changes in the world economy, namely the oil crisis and globalization, as well as the negative externalities resulting from the deepening of EU integration, created positive incentives for a stronger institutional relationship. Ingebritsen (1997: 174) argues that, as a result of the oil shock, the Scandinavian countries had embarked upon a transformation of their economic model so that ‘Scandinavian political economies shared more in common with European institutions and policies than in the previous accession period (the 1970s).’ When the EU launched its internal market programme, the EFTA economies performed worse than the EU-6 in terms of economic growth and experienced a dramatic increase in outward investment. On the one hand, therefore, the internal market provided a strong pull, as it offered the prospect of increasing competitiveness, while on the other hand the threat of a relocation of investment had a push effect (see, e.g., Mattli 1999: 82, 89; Fioretos 1997: 312–16; Bieler 2000: 41–3, 73–4). The pressure to join the internal market grew due to a ‘domino effect’ after Austria applied for membership in 1989 (Baldwin 1995: 33). In contrast to the broad agreement about the underlying systemic factors, there is a more controversial debate about how these systemic factors translated into domestic politics in individual countries. There are two distinctive questions to this debate, which an exclusive focus on the systemic level fails to answer. The first is about how these systemic factors translated into alliances of actors at the domestic level that successfully pushed for EU membership. The second goes further towards clarifying the conditions under which outsiders join by also considering cases that did not result in accession. Composition and structure of domestic alliances leading to accession With regard to the first debate, Fioretos (1997) argues that export-oriented Swedish firms successfully pushed the Swedish government to pursue EU membership by threatening to relocate their investment. By contrast, Smith (1999) places more emphasis on government choice than on societal pressure as well as on the political

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power of economic ideas. He argues that the economic downturn persuaded the Finnish and Swedish governments of the need for a radical change in economic policy, which in turn required a fundamental change in state–society relations. EU membership was thus a means to play a ‘two-level game’ to overcome domestic corporatist arrangements, to which the EEA provided a strategic route: while the EEA did not require popular approval (except in Switzerland), the fait accompli of EEA membership created strong incentives for full membership. Finally, Bieler’s neo-Gramscian analysis of Sweden and Austria echoes to some extent the more constructivist notion of economic ideas as underpinning a neoliberal ‘hegemonic project’ (Bieler 2000, ch. 4 this volume). Otherwise, however, Bieler argues that domestic actors react to material constraints and incentives. In contrast to both Fioretos and Smith, he does not see either governments or societal groups as pushing or pushed, but observes partly cross-cutting alliances between the social forces of business and labour as well as certain state institutions. The cleavage in these alliances relates to whether they are oriented at domestic or transnational production processes. Variations in domestic approval of membership The second debate concerns competing explanations for variations in the success of different applicants’ governments to obtain approval for their applications or accession treaties in national referenda. Drawing on aggregate data on economic performance, Mattli attributes the negative outcome of the Norwegian referendum to the fact that, for the second time after 1972, the economic performance gap with the EU had disappeared between application and ratification (1999: 85–6). Other studies argue that these variations depended mainly on domestic structures in the applicant countries. In her analysis of the Nordic countries, Ingebritsen (1998) attributes the variation in outcomes to different leading sectors in the Scandinavian economies. Whereas Sweden and, to a lower degree, Finland are capital-intensive manufacturing exporters (which makes them sensitive to changes in their export markets and to the threat of disinvestment), Norway’s income is dominated by the petroleum sector, which not only makes this country less dependent on the European market but also allows it to protect its agriculture and fisheries at higher levels than the EU. This finding is corroborated by Moses and Jenssen (1998), whose analysis of the referenda at the county level shows that (subnational) regions that depend on sheltered sectors were less likely to support membership than those dependent on manufacture and trade. Materialist and rationalist explanations, however, cannot account for the Swiss case. Observers attribute the Swiss ‘no’ to the EEA to socio-political characteristics such as multinationality or to voters’ concerns about neutrality, sovereignty, and direct democracy (Arndt 1998: 268; Mattli 1999: 93–4) or simply to the Swiss government’s poor management of the application process (Dupont et al. 1999). Gstöhl (ch. 2 this volume) makes a more general argument that constructivist approaches are necessary complements to an analysis of material cost and benefits,

20 Frank Schimmelfennig and Ulrich Sedelmeier in order to understand how particular national identity constructions result in ‘reluctance’ towards EU membership. She emphasizes the importance in such identity constructions of geo-historical factors (foreign policy traditions and experiences of foreign rule), socio-political institutions, and societal cleavages. Thus, the story of EFTA membership applications can plausibly be told in rationalist terms. Changes in their security and economic environment led the EFTA governments to recalculate the costs and benefits of EU membership on the basis of their material interests in power and welfare. By contrast, identity-related factors that could have been an obstacle to EU membership seem to have mattered less. However, the apparent unimportance of conflicting national identity constructions seems to have been primarily the case for governmental elites. By contrast, for electorates in national referenda, presumed characteristics of national identity and political culture (corporatism, neutrality) seem to have mattered more than material cost–benefit calculations. Eastern enlargement Applicant politics and member-state politics In contrast to EFTA enlargement, work on eastern enlargement has focused on EU politics. The CEECs’ desire to join the EU appears largely uncontroversial, as it conforms with both constructivist and rationalist expectations. The argument that EU membership as part of the CEECs’ foreign policy object to ‘return to Europe’ is motivated by their desire to cast off an ‘eastern’ identity and to be recognized by the European international community as ‘one of us’ (see, e.g., Kolankiewicz 1993; Neumann 1993) fits well with constructivist arguments. Indeed, Schimmelfennig (ch. 8 this volume) suggests that the extent to which different CEECs adhere to liberal democratic norms is the most consistent indicator of their membership applications, not just to the EU, but also to other European organizations that are based on these values. Likewise, material cost–benefit calculations would lead us to expect a strong CEEC interest in EU membership (Moravcsik and Vachudova ch. 9 this volume). The CEECs can expect to benefit not only from full economic integration in terms of market access and incentives for foreign direct investment, but also in terms of budgetary receipts and a voice in EU decision-making. Mattli and Plümper (ch. 3 this volume) offer a formal rationalist model that explains how the extent of democratization in the CEECs – used by Schimmelfennig (ch. 8 this volume) as a ‘constructivist’ indicator for the degree of community between the organizations and the applicants – can also be conceived as a ‘rationalist’ indicator for the domestic incentives and costs of membership. They argue that the main result of EU membership is to redress economic distortions and to maximize aggregate welfare. Democratic regimes are more likely to pursue such policies than nondemocratic regimes. In the latter, domestic interest groups can more easily resist changes in the status quo, which guarantees their rents at the expense of aggregate welfare (see also, e.g., Vachudova 2001, 2005).

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There are also only few theoretical studies of member-state politics. Again, this appears to reflect that the member governments’ preferences (see, e.g., Grabbe and Hughes 1998: 4–6) conform well with rationalist expectations about cost–benefit calculations. Material conditions, in particular geographical proximity (both as a proxy for interdependence and geopolitical interests) and socio-economic structure (affecting gains/losses from competition for market access, investment, and budgetary receipts), go a long way towards explaining variations in the member governments’ preferences about the speed of eastern enlargement and the selection of candidates (Schimmelfennig ch. 7 this volume; Sedelmeier 1994). However, the analyses of the German case by Tewes (1998) and Hyde-Price (2000) suggest that there is also a more sociological explanation of German governments’ support for enlargement as the result of complex role conflicts in German foreign policy. EU macro-politics Theoretical studies of eastern enlargement have focused predominantly, and often exclusively, on the macro-dimension of EU politics. The key question that these studies address is why the EU decided to enlarge. Moravcsik and Vachudova (ch. 9 this volume) provide a rationalist explanation for the decision to enlarge and the outcome of accession negotiations. The preferences of the member states appear to reflect differences in domestic socio-economic structures that lead to an uneven distribution of economic opportunities or competition, as well as rivalry for receipts from the EU budget. While the uneven distribution of costs and benefits from enlargement led to opposition from some member states, Moravcsik and Vachudova argue that these costs were not sufficiently large for them to block enlargement (see p. 205). The strongly asymmetrical bargaining power between the incumbents and the CEECs allowed the reluctant EU members to minimize the expected costs to the detriment of the new members. Skålnes (ch. 10 this volume) draws on insights from realism to explain the EU’s decision to enlarge with the long-term security interest of EU members. The wars following the breakup of Yugoslavia and the Kosovo conflict raised concerns about stability in their neighbourhood and thus led respectively to the decision to enlarge and to include all CEEC applicants in accession negotiations. However, the bulk of analyses of eastern enlargement are underpinned by what is perhaps a surprisingly strong consensus that a rationalist, materialist framework is insufficient. Counterfactuals suggest that the decision to enlarge presents puzzles for rationalist approaches that focus on the distribution of egoistic, material preferences and bargaining power (Schimmelfennig ch. 7 this volume; Sedelmeier 1998: 2). The CEECs did not possess the bargaining power to make the reluctant majority of member states accept their bid to join the EU, since economic interdependence between the member states and the applicants is highly asymmetrical in favour of the EU. In turn, the proponents of eastern enlargement in the EU (Britain, Denmark, Germany) were in a clear minority and could not credibly threaten the more reluctant governments with any attractive unilateral or

22 Frank Schimmelfennig and Ulrich Sedelmeier coalitional alternative outside the EU framework (such as some form of Northern– Central European integration). In game-theoretical language, then, the situation was that of a ‘suasion game’ (Martin 1993: 104) in which the CEECs and the proponents of enlargement had the dominant strategy to agree with whatever the ‘brakemen’ saw as being in their best interest. Finally, association, the initial outcome of the enlargement process, corresponds with the ‘Nash solution’ to this game because it protects the potential losers against the costs of trade and budgetary competition and, for the others, it is at least more beneficial than the status quo. The change from association to enlargement cannot be explained by this bargaining structure. Thus, the debate about the EU politics of eastern enlargement has been dominated by studies that go beyond material factors. Some analyses primarily criticize an intergovernmental bargaining model of eastern enlargement (Friis 1998a, 1998b, 1998c; Friis and Murphy 1999; 2000), but much of their argument can still be accommodated within a rationalist framework. This concerns, for example, the emphasis on the high degree of uncertainty characterizing the EU’s negotiation processes, which limits the ability of actors to pin down their interests and preferences ahead of the negotiations and allows for agenda-setting through supranational actors (see also Smith 1998); the complexity of the negotiations themselves; the precedence created by past practices; and the spillover from other negotiations. Other authors start more explicitly from ideational premises and emphasize the role of norms and identity in the enlargement process (Fierke and Wiener ch. 5 this volume; Schimmelfennig 2003, ch. 7 this volume; Sedelmeier forthcoming, ch. 6 this volume; Sjursen 2002). Although we should not overstate the differences, we note that there are nuances in this broadly constructivist work, concerning primarily (1) the nature of the norms that are relevant in the enlargement process and (2) how these norms matter. With regard to the nature of norms and identity salient in the EU’s eastern enlargement, Schimmelfennig (1998, ch. 7 this volume, ch. 8 this volume, 2003) emphasizes primarily the constitutive liberal values and norms of the European international community, which are at the basis of the membership norms contained in the EU treaties. Indeed, his statistical event-historical analysis in this volume presents evidence that the more a state adheres to these liberal norms, the higher the likelihood that it will be admitted to the EU (as well as to other West European regional organizations – the Council of Europe and NATO). Friis (1998c) argues that the EU’s pan-European identity was a key factor in the Luxembourg European Council’s decision to start formal accession negotiations with all CEEC candidates at the same time. Fierke and Wiener (ch. 5 this volume) emphasize primarily the importance of speech acts, namely the 1975 declaration of the Conference on Security and Cooperation in Europe (CSCE), for the enlargement of NATO and the EU. In their argument, this speech act entailed a ‘promise’ to encourage the spread of Western democratic norms across the division of Europe which became part of the institutional identity for both organizations. Sedelmeier (1998, ch. 6 this volume, forthcoming) focuses more explicitly on the discursive creation of a particular identity by the EU towards the CEECs, which

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asserted, throughout the Cold War and after its end, a ‘special responsibility’ of the EU for the reintegration of the peoples that had been involuntarily excluded from the integration project. Similarly, Sjursen (2002) argues that a ‘kinship-based moral duty’ led the EU to enlarge to the CEECs. While not all of these accounts are very explicit about how these norms matter, the enlargement literature reflects the debate between rationalist arguments about the constraining effect of norms on actors’ strategies and constructivist arguments about their constitutive effects on actors’ identities. The rationalist view underpins the argument by Schimmelfennig (ch. 7 this volume, 2003) that the EU’s normative institutional environment enabled actors that favoured enlargement for selfish reasons to use references to institutional norms instrumentally. Such ‘rhetorical action’ increased their bargaining power, as it allowed them to shame reluctant member states that were concerned about their reputation as community members into acquiescing in enlargement. By contrast, Fierke and Wiener’s argument, that at the end of the Cold War previous ‘promises’ were turned into a ‘threat’ (ch. 5 this volume), is based on the assumption that speech acts create inter-subjective meanings that have a much deeper impact on identity constructions. Finally, Sedelmeier (1998, ch. 6 this volume) argues that the effect of norms is uneven across different groups of actors inside the EU. Those actors who identified most closely with the EU’s identity towards the CEECs acted as principled policy advocates. For other actors, however, the collectively asserted ‘responsibility’ and the commitment that it entailed acted primarily as a constraint on open opposition to enlargement, which in turn enabled the policy advocates to move policy incrementally towards enlargement. EU substantive politics Most studies of EU enlargement politics focus almost exclusively on macropolitics, with few suggestions about the implications of their insights for substantive politics. Their failure to link their explanatory factors to substantive policies limits their contribution to explaining the conditions under which such substantive outcomes reflect the preferences of certain actors. At the same time, the few theoretical studies of the substantive dimension focus mainly on the early phase of the association policy (see, e.g., Papadimitriou 2002; Torreblanca 2001) and offer little guidance on how to link these two dimensions of enlargement. For example, the comparative analysis of various areas of EU policy towards the CEECs by Haggard et al. (1993) argues convincingly that domestic politics, rather than theories that focus on state power or international institutions, best account for substantive policy outcomes. However, the EU’s eventual decision to enlarge is then difficult to explain on the basis of domestic interest group preferences alone. Sedelmeier (1998, 2001, forthcoming) suggests that one way to link macro- and substantive politics in eastern enlargement is to focus on the role of policy advocates in the EU. He argues that the receptiveness of a group of policy-makers inside the Commission to EU identity towards the CEECs did not only make them

24 Frank Schimmelfennig and Ulrich Sedelmeier push for enlargement as such at the macro-level, but also led them to advocate the preferences in substantive policies. In chapter 11 of this volume, Sedelmeier argues that the success of such advocacy did not depend only on interest group pressure, but also on the structure of the policy process and on policy paradigms – the sets of ideas underpinning EU policy in the various policy areas. The combination of these factors then determines under which conditions EU policy might accommodate the preferences of the candidate countries. Ruano (ch. 12 this volume) also emphasizes the importance of the institutional structure in the specific context of accession negotiations. She argues that the fragmentation of the EU policy process insulated decisions on agricultural policy from wider reform pressures of enlargement, which allowed the agricultural policy community to prevent radical changes and to shift the adjustment burden to new members.

Conclusion: rationalism, constructivism and research on EU enlargement For a long time, the theoretical study of enlargement has been the domain of economics. Club theory has conceived of the EU as an economic association and has focused on the economic costs and benefits of membership and expansion. The general value added of the political science analysis of enlargement consists in the improved understanding of enlargement as a political process driven by more and other factors than just economic interests (see also Gstöhl ch. 2 ; Mattli and Plümper ch. 3 this volume). For all their different theoretical perspectives, most contributions to this volume agree on this point. Rationalist institutionalism emphasizes the political economy of enlargement, including the autonomy concerns and re-election constraints of governments, asymmetrical interdependence, and the differential power of interest groups (Mattli and Plümper ch. 3, Moravcsik and Vachudova ch. 9, Bieler ch. 4, Ruano ch. 12, this volume). Constructivist institutionalism brings in ideational factors such as national identity in applicant politics (Gstöhl ch. 2 this volume), collective identity in EU macro-politics (Fierke and Wiener ch. 5, Schimmelfennig chs 7 and 8, Sedelmeier ch. 6, this volume), and policy paradigms that provide the glue for sectoral policy communities in substantive policies (Sedelmeier ch. 11, Ruano ch. 12, this volume). Obviously, both rationalist and constructivist factors play a role in enlargement decision-making. The stronger emphasis on rationalist factors in the analysis of EFTA enlargement, and on constructivist factors in eastern enlargement, is to a large extent explicable by the different characteristics of both enlargement rounds and by what researchers regard as unproblematic and puzzling. In the case of EFTA enlargement, neither the democratic credentials nor the economic capacities of the candidates were an issue; the puzzle was the timing of applications and the variance in referendum outcomes. In the case of eastern enlargement, it was the other way round (but see Moravcsik and Vachudova ch. 9, Skålnes ch. 10, this volume). At the same time, the specific foci and puzzles guiding the research on each enlargement round limit the comparability of results and cast doubt on their generalizability. For instance, if applicant states are indeed motivated mainly by

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material self-interest, how far ‘down’ into their own societies and how far ‘up’ on the EU level do material factors ‘travel’ and affect enlargement outcomes? Moreover, if EU macro-decisions do indeed reflect collective identity, membership norms, and legitimacy concerns, is it ‘ideas all the way down’ to member-state politics and substantive policies? Finally, does the impact of enlargement on the EU, its member states, and the applicants result in a (constructivist) process of social learning and internalization or in a (rationalist) process creating new behavioural opportunities and constraints at the domestic and EU levels? In sum, the state of research on enlargement demonstrates the limits of single-case studies (even if they are theory-oriented) and the need for a widening of enlargement research – to more comparative analysis and to the integration of underresearched dimensions such as member-state politics, substantive policies, and enlargement impact.

Notes 1 This chapter adapts an article that was originally published in Journal of European Public Policy, 9(4) (2004): 500–28. 2 For simplicity, we use the term EU throughout. 3 To be sure, we do not suggest that only large-n studies are useful. Qualitative studies of single cases can be just as valuable for comparative insights if they are able to test generalizable propositions. 4 This table does not give a comprehensive bibliography of the enlargement literature. We focus on recent theory-oriented work and its general distribution across various research foci. Bold print denotes contributions to this volume. 5 On the different conceptions of institutions, see, e.g., Scott (1995). 6 Moravcsik (1998: 62) defines a state’s bargaining power as ‘inversely proportional to the relative value that it places on an agreement compared to the outcome of its best alternative policy’. 7 However, the EP is usually not seen as a major player in enlargement politics. Garrett and Tsebelis concede that, under the assent procedure, it is ‘reasonable to conceive of decision making in terms of the Luxembourg compromise period’ (1996: 283). According to Bailer and Schneider (2000), the EP is constrained in the use of its veto against accession agreements because of its integrationist stance.

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26 Frank Schimmelfennig and Ulrich Sedelmeier Baldwin, D. A. (ed.) (1993) Neorealism and Neoliberalism: The Contemporary Debate. New York: Columbia University Press. Baldwin, R. E. (1995) ‘A Domino Theory of Regionalism’, in R. E. Baldwin, P. Haaparanta and J. Kiander (eds), Expanding Membership of the European Union. Cambridge: Cambridge University Press, 25–48. Barnett, M. N., and Finnemore, M. (1999) ‘The Politics, Power, and Pathologies of International Organizations’, International Organization, 53: 699–732. Bieler, A. (2000) Globalization and Enlargement of the European Union: Austrian and Swedish Social Forces in the Struggle over Membership. London: Routledge. Börzel, T. (1999) ‘Towards Convergence in Europe? Institutional Adaptation to Europeanization in Germany and Spain’, Journal of Common Market Studies, 37: 573–96. Buchanan, J. M. (1965) ‘An Economic Theory of Clubs’, Economica, 32: 1–14. Checkel, J. T. (1999) ‘Norms, Institutions, and National Identity in Contemporary Europe’, International Studies Quarterly, 43: 83–114. Christiansen, T., Jørgensen, K. E., and Wiener, A. (1999) ‘The Social Construction of Europe’, Journal of European Public Policy, 6: 528–44. Collins, S. (2002) German Policy-Making and Eastern Enlargement of the European Union During the Kohl Era: Managing the Agenda? Manchester: Manchester University Press. Cortell, A. P., and Davis, J. W. (2000) ‘Understanding the Domestic Impact of International Norms: A Research Agenda’, International Studies Review, 2: 65–87. Croft, S., Redmond, J., Rees, W., and Webber, M. (1999) The Enlargement of Europe. Manchester: Manchester University Press. Deutsch, K. W. (1970) Political Community at the International Level: Problems of Definition and Measurement. Garden City, NY: Archon Books. Dupont, C., Sciarini, P., and Lutterbeck, D. (1999) ‘Catching the EC Train: Austria and Switzerland in Comparative Perspective’, European Journal of International Relations, 5: 189–224. Falkner, G. (2000) ‘How Pervasive are Euro-Politics? Effects of EU Membership on a New Member State’, Journal of Common Market Studies, 38: 223–50. Finnemore, M. (1996) National Interests in International Society. Ithaca, NY: Cornell University Press. Fioretos, K. O. (1997) ‘The Anatomy of Autonomy: Interdependence, Domestic Balances of Power, and European Integration’, Review of International Studies, 23: 293–320. Friis, L. (1998a) ‘And Then They Were 15: The EU’s EFTA-Enlargement Negotiations’, Cooperation and Conflict, 33: 81–107. Friis, L. (1998b) ‘“The End of the Beginning” of Eastern Enlargement – Luxembourg Summit and Agenda-setting’, European Integration Online Papers, 2(7). Friis, L. (1998c) ‘Approaching the “Third Half” of EU Grand Bargaining – the Postnegotiation Phase of the “Europe Agreement” Game’, Journal of European Public Policy, 5: 322–38. Friis, L., and Murphy, A. (1999) ‘The European Union and Central and Eastern Europe: Governance and Boundaries’, Journal of Common Market Studies, 37: 211–32. Friis, L., and Murphy, A. (2000) ‘“Turbo-Charged Negotiations”: The EU and the Stability Pact for South-Eastern Europe’, Journal of European Public Policy, 7: 767–86. Garrett, G., and Tsebelis, G. (1996) ‘An Institutional Critique of Intergovernmentalism’, International Organization, 50: 269–99. Goetz, K. (2001) ‘Making Sense of Post Communist Central Administration: Modernization, Europeanization or Latinization?’, Journal of European Public Policy, 8: 1032–51.

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Grabbe, H. (2001) ‘How Does Europeanization Affect CEE Governance? Conditionality, Diffusion and Diversity’, Journal of European Public Policy, 8: 1013–31. Grabbe, H., and Hughes, K. (1998) Enlarging the EU Eastwards. London: Pinter. Haas, E. B. (1968) The Uniting of Europe: Political, Social, and Economic Forces 1950–1957, 2nd edn. Stanford, CA: Stanford University Press. Haggard, S., Levy, M. A., Moravcsik, A., and Nicolaidis, K. (1993) ‘Integrating the Two Halves of Europe: Theories of Interests, Bargaining, and Institutions’, in R. O. Keohane, J. S. Nye and S. Hoffmann (eds), After the Cold War: International Institutions and State Strategies in Europe, 1989–1991, Cambridge, MA: Harvard University Press, 173–95. Hasenclever, A., Mayer, P., and Rittberger, V. (1997) Theories of International Regimes. Cambridge: Cambridge University Press. Hyde-Price, A. (2000) Germany and European Order: Enlarging NATO and the EU. Manchester: Manchester University Press. Ingebritsen, C. (1997) ‘Pulling in Different Directions: The Europeanization of Scandinavian Political Economies’, in P. J. Katzenstein (ed.), Tamed Power: Germany in Europe. Ithaca, NY: Cornell University Press, 167–94. Ingebritsen, C. (1998) The Nordic States and European Unity. Ithaca, NY: Cornell University Press. Jacoby, W. (2004) Ordering from the Menu in Central Europe: The Enlargement of the EU and NATO. Cambridge: Cambridge University Press. Jileva, E. (2004) ‘Do Norms Matter? The Principle of Solidarity and the EU’s Eastern Enlargement’, Journal of International Relations and Development, 7: 3–23. Jupille, J., Caporaso, J., and Checkel, J. T. (2003) ‘Integrating Institutions: Rationalism, Constructivism and the Study of the European Union’, Comparative Political Studies, 36: 7–41. Katzenstein, P. J. (1997a) ‘United Germany in an Integrating Europe’, in P. J. Katzenstein (ed.) Tamed Power: Germany in Europe, Ithaca, NY: Cornell University Press, 1–48. Katzenstein, P. J. (1997b) ‘The Smaller European States, Germany and Europe’, in P. J. Katzenstein (ed.), Tamed Power: Germany in Europe. Ithaca, NY: Cornell University Press, 251–304. Katzenstein, P. J., Keohane, R. O., and Krasner, S. D. (eds) (1999) Exploration and Contestation in the Study of World Politics. Cambridge, MA: MIT Press. Kelley, J. (2004) Ethnic Politics in Europe: The Power of Norms and Incentives. Princeton, NJ: Princeton University Press. Kerremans, B. (1998) ‘The Political and Institutional Consequences of Widening: Capacity and Control in an Enlarged Council’, in P. H. Laurent and M. Maresceau (eds), The State of the European Union, vol. 4: Deepening and Widening. Boulder, CO: Lynne Rienner, 87–109. Kolankiewicz, G. (1993) ‘The Other Europe: Different Roads to Modernity in Eastern and Central Europe’, in S. García (ed.), European Identity and the Search for Legitimacy. London: Pinter, 106–30. Lippert, B., Hughes, K., Grabbe, H., and Becker, P. (2001) Britain, Germany and EU Enlargement: Partners or Competitors? London: RIIA. McNeely, C. L. (1995) Constructing the Nation-State: International Organization and Prescriptive Action. Westport, CT: Greenwood Press. March, J. G., and Olsen, J. P. (1989) Rediscovering Institutions: The Organizational Basis of Politics. New York: Free Press. Martin, L. L. (1993) ‘The Rational State Choice of Multilateralism’, in J. G. Ruggie (ed.), Multilateralism Matters: The Theory and Practice of an International Form. New York: Columbia University Press, 91–121.

28 Frank Schimmelfennig and Ulrich Sedelmeier Mattli, W. (1999) The Logic of Regional Integration. Europe and Beyond. Cambridge: Cambridge University Press. Mattli, W. (2000) ‘Sovereignty Bargains in Regional Integration’, International Studies Review, 2: 149–80. Moravcsik, A. (1998) The Choice for Europe: Social Purpose and State Power from Messina to Maastricht. Ithaca, NY: Cornell University Press. Moses, J. W., and Jenssen, A. T. (1998) ‘Nordic Accession: An Analysis of the EU Referendums’, in B. Eichengreen and J. Frieden (eds), Forging an Integrated Europe. Ann Arbor, MI: University of Michigan Press, 211–46. Neumann, I. B. (1993) ‘Russia as Central Europe’s Constituting Other’, East European Politics and Societies, 7: 349–69. Padoan, P. P. (1997) ‘Regional Arrangements as Clubs: The European Case’, in E. D. Mansfield and H. V. Milner (eds), The Political Economy of Regionalism. New York: Columbia University Press, 107–33. Papadimitriou, D. (2002) Negotiating the New Europe: The European Union and Eastern Europe. Aldershot: Ashgate. Phelan, W. (2004) ‘What the Politics of NAFTA Tell Us About the European Union’. Paper presented at the annual meeting of APSA, 2–5 September. Preston, C. (1997) Enlargement and Integration in the European Union. London: Routledge. Risse, T. (2000) ‘“Let’s Argue!” Communicative Action in World Politics’, International Organization, 54: 1–39. Sandler, T. M., and Tschirhart, J. T. (1980) ‘The Economic Theory of Clubs: An Evaluative Survey’, Journal of Economic Literature, 18: 1481–521. Sandler, T. M., Loehr, W., and Cauley, J. T. (1978) The Political Economy of Public Goods and International Cooperation. Denver, CO: University of Denver Press. Schimmelfennig, F. (1998) ‘Liberal Norms and the Eastern Enlargement of the European Union: A Case for Sociological Institutionalism’, Österreichische Zeitschrift für Politikwissenschaft, 27: 459–72. Schimmelfennig, F. (2003) The EU, NATO and the Integration of Europe: Rules and Rhetoric. Cambridge: Cambridge University Press. Schimmelfennig, F., and Sedelmeier, U. (eds) (2005) The Europeanization of Central and Eastern Europe. Ithaca, NY: Cornell University Press. Schmitter, P. C. (1969) ‘Three Neo-Functional Hypotheses about International Integration’, International Organization, 23: 161–6. Scott, W. R. (1995) Institutions and Organizations, Thousand Oaks, CA: Sage. Sedelmeier, U. (1994) ‘The European Union’s Association Policy Towards Central Eastern Europe: Political and Economic Rationales in Conflict’, Sussex European Institute Working Paper, No. 7. Sedelmeier, U. (1998) ‘The European Union’s Association Policy towards the Countries of Central and Eastern Europe: Collective EU Identity and Policy Paradigms in a Composite Policy’. PhD dissertation, University of Sussex. Sedelmeier, U. (2001) ‘Accommodation Beyond Self-Interest? Identity, Policy Paradigms, and the Limits of a Rationalist Approach to EU Policy towards Central Europe’, Politique Européenne, no. 3: 13–37. Sedelmeier, U. (forthcoming) Constructing the Path to Eastern Enlargement. Manchester: Manchester University Press. Sjursen, H. (2002) ‘Why Expand? The Question of Legitimacy and Justification in the EU’s Enlargement Policy’, Journal of Common Market Studies, 40: 491–513.

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Smith, E. (1999) ‘Re-regulation and Integration: The Nordic States and the European Economic Area’. PhD dissertation, University of Sussex. Smith, K. E. (1998) The Making of EU Foreign Policy: The Case of Eastern Europe. London: Macmillan. Smith, M. A., and Timmins, G. (2000) Building a Bigger Europe: EU and NATO Enlargement in Comparative Perspective. Aldershot: Ashgate. Sperling, J. (ed.) (1999) Two Tiers or Two Speeds? The European Security Order and the Enlargement of the European Union and NATO. Manchester: Manchester University Press. Steunenberg, B. (ed.) (2002) Widening the European Union. The Politics of Institutional Change and Reform. London: Routledge. Tewes, H. (1998) ‘Between Deepening and Widening: Role Conflict in Germany’s Enlargement Policy’, West European Politics, 21: 117–33. Torreblanca, J. I. (2001) The Reuniting of Europe: Promises, Negotiations and Compromise. Aldershot: Ashgate. Vachudova, M. A. (2001) ‘The Leverage of International Institutions on Democratizing States: Eastern Europe and the European Union’, European University Institute Working Paper, RSC 2001/33. Vachudova, M. A. (2005) Europe Undivided: Democracy, Leverage and Integration after Communism. Oxford: Oxford University Press. Vaubel, R. (1986) ‘A Public Choice Approach to International Organization’, Public Choice, 51: 39–57. Wallace, H. (2000) ‘EU Enlargement: A Neglected Subject’, in M. G. Cowles and M. Smith (eds), The State of the European Union, vol. 5: Risk, Reforms, Resistance, and Revival. Oxford: Oxford University Press, 149–63. Walt, S. M. (1987) The Origins of Alliances. Ithaca, NY: Cornell University Press. Waltz, K. N. (1979) Theory of International Politics. New York: Random House. Weber, S. (1994) ‘Origins of the European Bank for Reconstruction and Development’, International Organization, 48: 1–38. Wennerlund, K. (2000) ‘International Bargaining amid Institutions: Institutional Attributes and the Distributive Consequences of Europeans Joining Europe’. Paper presented at the workshop ‘Governance by Enlargement’, Darmstadt University of Technology. Wolf, K. D. (1999) ‘The New Raison d’Etat as a Problem for Democracy in World Society’, European Journal of International Relations, 5: 333–63.

Part II

The politics of accession in applicant countries

2

Scandinavia and Switzerland Small, successful and stubborn towards the EU Sieglinde Gstöhl

Introduction The European Union (EU) has steadily enlarged over the last thirty years. Yet the demand for membership varies across countries as a result of different combinations of incentives for and impediments to integration. Many Mediterranean and Central and Eastern European states, which needed support for their young democracies and weak economies, have been eager to accede as soon as they felt remotely able to do so. Other countries, such as most members of the European Free Trade Association (EFTA), have been hesitant. Except for Portugal, they would have been able to join the European Communities (EC) early on: as European democratic market economies, they fulfilled the eligibility criteria and (apart from the two smallest members, Iceland and Liechtenstein) had important economic reasons for EC membership. However, for a long time these EFTA countries were not willing to join because political constraints outweighed the expected benefits of accession. Norway, Sweden and Switzerland provide the most puzzling cases since their typical aggregate balance sheet has been characterized by (net) economic incentives for and political impediments to integration. Their policies ranged from the OECD-wide free-trade area to EFTA, association or bilateral free trade agreements with the EC, the European Economic Area (EEA) and EU membership applications. They have thus over time been aiming at various levels of integration, expressing different degrees of stubbornness which are also reflected in their current positions: whereas Sweden finally joined the Union in 1995, Norway remains in the EEA, and Switzerland, which in 1992 failed to ratify the EEA Agreement, in 1999 concluded bilateral sectoral agreements with the EU. This chapter attempts to lay open the roots of the long-standing Swiss, Norwegian and Swedish reluctance. In other words, why have these small, economically successful states for such a long time remained so stubborn towards supranational integration? The chapter proceeds in three steps. First, I argue that these countries’ reluctance to join the EU presents a puzzle for theories of international economics. Given the expected benefits of membership, these theories fail to explain the lack of demand for integration. Second, I look at alternative explanations offered in the international relations literature. Some recent political

34 Sieglinde Gstöhl economy approaches fare better than international economics, but still do not provide a full explanation. Constructivism draws attention to the role of identities as a potential source of political impediments to integration. Third, I therefore examine the political constraints to integration emanating from Norwegian, Swedish and Swiss national identities. I argue that neither material interests nor identities alone are sufficient to explain stubborn integration policies, but that rationalist and ideational factors complement each other. A country turns out to be more stubborn, the lower the expected economic benefits and the stronger the domestic and geo-historical identity constraints.1 This line of argument helps to understand national integration policies as well as the current different positions of Sweden, Norway and Switzerland.

The puzzle: reluctance despite potential economic benefits Varying stubbornness of (former) EFTA members British reluctance is rooted in the country’s historical legacy, that is, ‘the continuity of institutions since the English Civil War; former world-power status; the successful avoidance, as an island, of full-scale invasion; the position of having “stood alone” in 1940 together with the prestige gained as a victor; the myth of parliamentary sovereignty’ (Bulmer 1992: 9). However, as the only large EFTA state, the United Kingdom in the 1960s increasingly faced not only economic but political incentives for accession that ruled out these identity-related obstacles. Prime Minister Macmillan’s statement speaks for itself: In the past, as a great maritime Empire, we might give way to insular feelings of superiority over foreign breeds and suspicion of our neighbours across the Channel. . . . Are we now to isolate ourselves from Europe at a time when our own strength is no longer self-sufficient . . .? . . . By joining this vigorous and expanding community and becoming one of its leading members, as I am convinced we would, this country would not only gain a new stature in Europe, but also increase its standing and influence in the councils of the world. (The Times 1962: 8) By contrast, Denmark – like Ireland – simply followed its major export market, Britain, and the lure of the Common Agricultural Policy. Agriculture has played a central role in the Danish economy and in national myths. Even though the ‘traditional amorphous peasant feelings of community and solidarity’ were successfully transformed into modern times (Østergård 1992: 23), the Danish welfare model has been less institutionalized than its Swedish or Norwegian counterparts (Esping-Andersen and Korpi 1987). Danish politicians had a longstanding propensity to present the EC as advantageous from a strictly economic point of view (von Dosenrode-Lynge 1993: 298–9). In light of the Danish conflation of nation and state, political integration is perceived predominantly as a loss

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of sovereignty. Denmark is a very old, homogeneous nation-state that gradually lost its empire and was reduced to a small size. It suffered German occupation in World War II and thereafter decided to give up neutrality and join NATO, while still pursuing an active internationalism. Denmark knows a tradition of binding referendums and of ‘cooperative democracy’ which assures a close parliamentary control of the government and often limits its bargaining space in European affairs (Petersen 1996). Unlike Denmark and the United Kingdom, Austria and Finland are not genuine ‘reluctant Europeans’ because external constraints had kept them from joining. The East–West conflict had imposed neutrality on Austria and Finland and the collapse of the bipolar system four decades later created a ‘window’ of economic and political opportunities for them to join the EU (Luif 1995). In fact, the Austrian government had already considered membership of the European Coal and Steel Community in 1956. Finland’s foreign policy has following its independence in 1918 been dominated by security concerns. Since becoming EU members in 1995, Austria and Finland have pursued rather integration-friendly policies. Liechtenstein and Iceland have so far never had persuasive economic incentives to join the EU. While Liechtenstein’s economy rests on a liberal financial services sector alongside highly specialized export industries, the Icelandic economy is very dependent on fisheries, whose management is not considered compatible with the EU’s Common Fisheries Policy. These two small states have been ‘stubborn’ because they faced not only political but also economic impediments to membership. As I will now discuss in more detail, Sweden, Norway and Switzerland provide particularly puzzling cases among the (former) EFTA members, since their typical aggregate balance sheet has been characterized by (net) economic incentives for and political impediments to integration. Economic incentives to join Economic theory of integration expects that small and highly industrialized states are more likely to join a common market than larger or less advanced countries. Integration allows small states to obtain advantages similar to large countries, that is, (1) the opportunity to specialize in accord with comparative advantages, (2) the ability to exploit economies of scale, and (3) the stimulating effects of increased competition (cf. van Mourik 1997; Robinson 1963). First, trade diversion generally threatens to reduce the welfare of non-members. From an EFTA point of view, not participating in the gradual reduction of intraEC barriers meant that the sales of EFTA-based firms in the single market might be displaced without any offsetting increase in exports. Moreover, the likelihood of integration actually increasing welfare rises with the inherent regionalism of the members. Geographically close countries have strong economic incentives to join, especially if the Community is their main customer and if, because of their smallness, they cannot individually affect the terms of trade. Second, customs unions permit better exploitation of economies of scale which cannot be reaped in small domestic markets. Low unit-cost production is especially

36 Sieglinde Gstöhl important for highly industrialized, specialized and export-oriented market economies such as the EFTA states. For the latecomers, the larger the market they join the better, since it implies a greater potential scope for division of labour and scale economies. At the same time, watching the union grow from the outside is becoming more and more costly in terms of foregone economic benefits and increasing discrimination. Third, the benefits of more competition are greater for countries with similar production such as the intra-industry trade in manufactures typical for Western Europe. An upturn in competition reduces monopoly distortions and increases efficiency and consumers’ choice, which is expected to benefit small economies in particular. Membership also avoids the problem of investment diversion. As Sweden experienced in the late 1980s, the danger of capital flight is particularly high for economies dominated by multinational corporations. Table 2.1 shows the Swedish, Norwegian and Swiss exports to the Community as share of total exports, the main sector exports to the EC, and the estimated trade barriers which they encountered in 1958 (founding of the EC), 1973 (first EC enlargement and EC–EFTA agreements on industrial free trade) and 1992 (EC membership applications). The export dependence of all three countries on the Community has steadily increased, while the latter has deepened integration from a customs union to an internal market and economic and monetary union. Instead of joining the EU, the three small EFTA states have made every effort to improve access without having to become full members. Between 1973 and 1984, the bilateral free-trade agreements gradually eliminated tariffs on industrial goods, and in 1994 the EEA agreement abolished non-tariff barriers (NTB) for Sweden and Norway.2 Given that economic explanations alone cannot account for the three countries’ stubborn policies, I now turn to alternative explanations that introduce political factors into the analysis.

Alternative explanations Political economy explanations Mattli (1999: 80–3) maintains that a country applies for EU membership after one or more years of growth rates below the average of the member states.3 Hence, a country is reluctant to become a member if its economy grows faster than that of the Community does. The candidates that were significantly poorer than the least wealthy member states but enjoyed higher growth rates, such as Portugal or certain Central and Eastern European countries, are exempted from this claim (ibid.: 94–9). Based on opinion polls, however, Anderson and Kaltenthaler (1996: 188–9) found that, in contrast to unemployment and inflation, GDP growth has no significant effects on public support for EU membership. Integration is only one of many policy instruments that a government may use to enhance economic performance in view of its goal of re-election. Moreover, Norway, Sweden and Switzerland have either applied when their performance was above EC average,

55.7% of exports to EC non-electrical machinery (17%) – / medium paper manufactures (15%) – / low transport equipment (13%) – / medium

1992

Source: Gstöhl (2002).

50.4% of exports to EC non-electrical machinery (13%) 5% transport equipment (12%) 7% paper manufactures (12%) 11%

1973

Tariff/NTB 3% 3% 11%

31% of exports to EC metalliferous ores (19%) pulp and waste paper (19%) wood and cork (13%)

1958

Sweden

66.4% of exports to EC petroleum (49%) gas (11%) non-ferrous metals (8%)

47.4% of exports to EC non-ferrous metals (19%) transport equipment (13%) iron and steel (8%)

27.3% of exports to EC base metals (28%) pulp and waste paper (10%) paper manufactures (9%)

Norway

Table 2.1 Export shares of the internal market and estimated trade barriers

– / low – / low – / low

6% 7% 6%

Tariff/NTB 10% 3% 17%

58.9% of exports to EC non-electrical machinery (19%) electrical machinery (10%) professional instruments (9%)

45.4% of exports to EC non-electric machinery (22%) professional instruments (9%) electrical machinery (9%)

39.2% of exports to EC non-electrical machinery (25%) textile manufactures (11%) professional instruments (8%)

Switzerland

– / medium – / high – / low

5% 8% 7%

Tariff/NTB 14% 18% 16%

38 Sieglinde Gstöhl failed to apply in spite of persistently low growth vis-à-vis the Community, or applied but did not join. According to Mattli (1999: 85–94), these ‘anomalies’ are accounted for by Norwegian oil revenues and the Cold War restraint on Swedish and Swiss neutrality. This ad hoc explanation is not convincing, since Norway lacked petroleum-generated profits in 1972, and only Sweden but not Switzerland joined the EU in the 1990s. Ingebritsen (1998: 115) argues with regard to the Nordic countries that their ‘divergent paths to Europe conformed to the specificities of sectoral politics, not to the structure of the state, to membership in international institutions, or to class divisions within the society.’ From her point of view, the end of the Cold War finally allowed the hesitant EFTA countries seriously to consider EU membership, while the different outcomes are explained by the leading economic sectors and their respective political influence (ibid.: 10).4 Therefore, Sweden joined the European Union in 1995 because its highly export-dependent and capital-intensive manufacturing sector was lobbying for membership, and Norway stayed out because fishing and farming was threatened and oil revenues made non-membership economically feasible. This claim seems questionable. Table 2.1 shows that the Swedish and Swiss economies were quite diversified in the early 1990s, lacking a clearly dominating sector. Besides, the outcome of the 1994 referendum in Sweden was uncertain to the date of the vote, despite heavily pro-EU leading sectors, and the result of the 1992 Swiss referendum on the EEA was negative even though the leading sectors were highly export-dependent and strongly in favour of joining. In Norway, which was never constrained by the East–West conflict, the interests tied to the most important industry, oil and gas, were inconsequential in the membership issue, while marginal sectors such as fishing and farming mattered. Even if one concedes that the petroleum sector did not actively lobby for membership, but rather provided the revenues that allowed the state to dole out subsidies to agriculture and fisheries, which in turn enabled them to campaign against accession, the question remains why in 1972 those two sectors contributed to a ‘no’ vote without the existence of oil-generated subsidies (Neumann 2001: 91). Moravcsik (1998: 7) argues that commercial interests sufficiently explain national integration preferences but that ‘where economic interests were weak, diffuse, or indeterminate national politicians could indulge the temptation to consider geopolitical goals’ (such as the position of Germany, the Soviet threat, and concern about colonies, global prestige or European federalist ideology). According to his liberal intergovernmentalism, a country is reluctant if it is subject to no significant economic incentives in favour of but to security concerns against membership. Yet, as set out in the preceding section, the EFTA countries’ economic interests in integration have generally been strong and specific. That is why they persistently sought for alternative forms of participation short of full EU membership. In a footnote, Moravcsik (ibid.: 479) admits that, at least in the case of traditional neutrals, geopolitical factors might have played an important role regarding national support for integration. This article maintains that there are relevant political aspects beyond security externalities and that they are not a foil against which to argue but help explain integration preferences.

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The contributions by Mattli, Ingebritsen and Moravcsik add insights to international economics, with which they share a rationalist nature, but they do not offer a satisfactory account. Obviously, reluctance may originate in factors other than weak economic interests, import-competing influential economic sectors or growth rate differentials. Neumann (2001: 92), for instance, argues that one of the key reasons why Norwegians rejected EU membership in 1972 as well as in 1994 was that the peasants and fishermen were able to present themselves as the embodiment of the nation. Such ‘hidden’ impacts of national identities on integration policies are neglected by rationalist approaches, but they are essential for explaining a long-term and persistent pattern of disinclination against supranational integration. Hence, I now turn to the constructivist debate about collective identities. Constructivist insights Moderate versions of constructivism generally claim that identities (that is, constructions of nation- and statehood) shape interests and thus also integration policies (Wendt 1994: 385). Constructivist analyses have so far focused mainly on the transformative impact of EU institutions on member states’ identities and on the formation of a European identity (cf. Christiansen et al. 1999). To the extent that mechanisms are at work that promote collective identities (such as a European identity), ‘models that ignore them will understate the chances for international cooperation and misrepresent why it occurs’ (Wendt 1994: 391). Analogous to this reasoning, one might argue that, to the extent that mechanisms are present that uphold national identities, explanations that ignore them will understate the chances for stubbornness and misrepresent why it happens. Marcussen et al. (1999), for example, examine the variation in the degree to which nation-state identities have become European. They argue that new visions of political order need to resonate with pre-existing identities embedded in political institutions and cultures in order to constitute a legitimate political discourse and that such new ideas can most easily be promoted by political elites during ‘critical junctures’ when old identities are contested. From such a perspective, European ideas do not resonate well with Norwegian, Swedish or Swiss identities, whereas German or French identities have become ‘Europeanized’ because their elites have in crisis situations selected an identity construction that was in accordance not only with their perceived power interests but with underlying national myths and values. Since actors internalize national identity in a socialization process and embed it in domestic institutions and traditions, it tends to be sticky. In addition, national identity is ‘context bound’ in the sense that different components of it are invoked by different policy areas (Risse 2001: 201). If EU membership is perceived as a threat to essential elements of this identity, integration policies become reluctant. The importance attributed to those elements may well change over time – for instance, when the old concepts are viewed as becoming irrelevant (e.g., neutrality policy after the Cold War) or having failed (e.g., the Swedish model in the 1990s).

40 Sieglinde Gstöhl Constructivist approaches are helpful in understanding a country’s overall attitude towards integration; however, they cannot explain policy contents or timing. In fact, they run the danger of providing post hoc explanations in the sense that, if integration policy has changed, national identity must have changed first. In case of accession to the European Union, nation-state identity must have become ‘Europeanized’. Constructivists ignore that identity might be stable while stronger interests have tipped the scales in favour of membership. Without material interests, it was not plausible for Eurosceptical Britain to have joined the European Communities in 1973, if ‘statements show a remarkable continuity of British attitudes toward the EU and related identity constructions from the 1950s (and earlier) until the present time’ (Marcussen et al. 1999: 627). Have Swedish elites, in contrast to the Norwegians and Swiss, really succeeded in using the ‘critical juncture’ of 1989 to redefine national identity in an EU-friendly way or were economic imperatives more decisive? The interesting question is not whether but how identity-related institutions, societal traits, historical experiences or traditions matter for integration policies. To conclude, we lack an integration policy theory taking into account both material and ideational factors (or rationalist and constructivist insights) in order to be able to explain the individual countries’ varying willingness to integrate.5 All countries experience economic and political incentives and obstacles to joining an integration scheme. In the case of Sweden, Norway and Switzerland, the economic interests have been rather straightforward and increasing over time (cf. table 2.1), while the impediments to EU membership have typically been of a political, ideational nature. The following section investigates the identity-related factors that are important for the three small, successful and stubborn states.

Political impediments to joining Actors internalize national identity and embed it in domestic institutions, political culture and traditions. It is thus closely linked to ideas about sovereignty and statehood. The importance of political impediments to EU membership depends on whether the required loss of sovereignty touches on national identity.6 Identity includes both an internal dimension of shared norms (e.g., about the political and social order) that bind the nation together and an external dimension with regard to the state’s self-placement within international contexts (e.g., foreign policy traditions and experiences of foreign rule). Hence, there are either domestic or geo-historical constraints to renouncing sovereignty in favour of supranational integration if elites, based on a broad national consensus (or intersubjective, shared understandings), perceive them to be both significant and threatened by integration. Sweden Sweden’s potential constraints to EU membership, which to a large extent accounted for its ‘third way’ between the capitalist West and the communist East,

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have been its foreign policy tradition (as a geo-historical constraint) and welfare model (as a domestic constraint). ‘Neutrality and folkhemmet [the ‘people’s home’] were . . . the pillars of Sweden’s projection of itself into the world’ (Kronsell and Svedberg 2001: 154–5). The plans of the Swedish model, originating in the Great Depression of the 1930s, were gradually put into effect after World War II by the social democratic governments (Esping-Andersen and Korpi 1987). It was committed to full employment, a centralized system of wage bargaining, policies aiming at an egalitarian distribution of income, and access to comprehensive social benefits. The Swedish folkhem has acquired qualities of a national myth as the ‘Social Democrats have captured the idea of the nation – they have successfully interpreted the national identity as one of an ever-reforming welfare state, a national social community always striving to make itself more of a community’ (Heclo and Madsen 1987: 27). Throughout the 1950s and 1960s, Swedes considered that EC membership would threaten the successful record of their welfare model and neutrality policy because the ‘reactionary’ Community was associated with the famous ‘C words’: conservatism, capitalism, Catholicism and cartels, as well as a heritage of colonialism (Olssen 1993: 228). The ‘Golden Age’ of the Nordic welfare states ended with the economic crises of the 1970s. Despite some correction measures such as deregulating financial markets, partially privatizing state enterprises and introducing a tax reform, the folkhem has until the late 1980s actively been maintained (Andersson and Mjøset 1987). Sweden’s integration policy was still characterized by ‘an almost religious belief . . . in the necessity of neutrality and in the . . . superiority of the Swedish welfare model’ (Viklund 1989: 256). In the early 1990s, however, a commission of independent experts concluded that the Swedish model ‘resulted in institutions and structures that today constitute an obstacle to economic efficiency and economic growth because of their lack of flexibility and their one-sided concerns for income safety and distribution, with limited concern for economic incentives’ (Lindbeck et al. 1994: 17). Contrary to earlier years, the government was now of the opinion that the traditional goals of Swedish economic policy, such as high employment, a reliable welfare system, growth, low inflation, regional levellingout and a healthy environment, were considerably easier to achieve if Sweden joined the EU than if it stayed outside (Sweden 1994a: 47). By the early 1990s the importance attached to the second pillar of Swedish identity, neutrality, had dwindled as well. Sweden’s era of great power politics had ended in the eighteenth century. In 1814, the kingdom was forced to cede Finland to Russia, but acquired Norway from Denmark. Since then, Sweden has enjoyed peace and pursued a policy of neutrality. Constitutional reforms and the rapid growth of the liberals and social democrats increased domestic pressure against any military adventures. During the two world wars, Sweden defended its neutrality. When Norway and Denmark joined the Atlantic Alliance in 1949, the Swedish foreign minister declared that ‘whatever the explanation may be for our avoidance of war, our people cannot easily be convinced that their security now requires the abandonment of neutrality as an ineffective and out-of-date policy’

42 Sieglinde Gstöhl (Wahlbäck 1986: 80). Sweden’s policy of ‘non-alignment in peace aiming at neutrality in war’ (alliansfrihet) is not based upon an international treaty but selfproclaimed and ‘a statement of Swedish identity and the determination to uphold that identity come what may’ (Huldt 1994: 133). Its commitment to a just and equitable world order was often defended with missionary enthusiasm, and its internationalism came close to functioning as ‘surrogate nationalism’ or a ‘thirdway identity’ between East and West (Wæver 1992: 84). In 1961, Prime Minister Erlander defined the Swedish stance on integration for the next thirty years by declaring that neutrality policy must be supplemented by a persistent effort to avoid any commitment, even outside the sphere of military policy, which would make it difficult or impossible for Sweden, in the event of a conflict, to choose a neutral course and which would make the world around us no longer confident that Sweden really wanted to choose such a course.7 (1961: 119) In light of the end of the Cold War, Prime Minister Bildt announced in late 1991 that differences in historical experience were only one of the reasons why Sweden belonged to the circle of reluctant Europeans for so many years. Another reason was Sweden’s continued economic and social success.. . . Although there was no direct connection, there tended to be a mental correlation of the policy of neutrality in the field of security and the economic and social policies of the ‘Swedish middle way’ . . . between East and West . . .. It goes without saying that there is no longer any room for this sort of policies. No one wants to be a compromise between a system which has turned out to be a success and another that has turned out to be a historic catastrophe. (Bildt 1991: 96) In contrast to earlier statements, the government expected EU membership to increase the ‘possibilities to work for goals and interests that traditionally were important in Swedish foreign policy . . . without risking that the national identity would be wiped out’ (Sweden 1994b: 5–6). In fact, such identity-related political constraints that have grown over centuries are hard to ‘socialize away’. In spite of EU membership since 1995, ‘the strong ties between the policy of neutrality and Swedish national identity may explain why, in the debate on Sweden’s future security arrangement, the idea of Sweden as a neutral power in world affairs still occupies an important position’ (Kronsell and Svedberg 2001: 155). Norway Norway’s reluctance towards supranational integration may be accounted for by the association of Norwegian identity with a constant struggle for political

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independence (geo-historical constraints) in connection with the cleavages in its society and a highly subsidized welfare model (domestic constraints). The social democrats had in the Great Depression formed a political alliance with the Agrarian Party, and in 1945 all political parties agreed on a common welfare programme, the Folketrygd programme (Esping-Andersen and Korpi 1987: 71). The Norwegian model was the one with the strongest element of economic planning and state control of money markets as well as great efforts at regional and industrial policies (Andersson and Mjøset 1987: 232). As a result, Norwegian people ‘have tied the way they see themselves to the welfare state’ (Gaarder and Christensen 1992: 148). The neo-liberal offensive that swept Western Europe in the late 1980s was rather weak in Norway on account of its affluent oil and gas revenues (Hodne et al. 1992: 70–85). Nevertheless, the government reasoned in view of its 1992 accession bid that ‘the possibility to preserve and develop the welfare system and increase the level of welfare in Norway will be greater with EU membership than if Norway stays outside’ (Norway 1994: 70). Yet, voters did not follow this assessment in the membership referendum. Valen and Rokkan (1974: 326) distinguish several cleavages in Norwegian society: a geographical division between the eastern centre and the southwestern and northern peripheries, cultural conflicts over linguistic policy, alcohol policy and the control of the church, and economic conflicts such as the struggle of the working class against owners and employers. Like Sweden, Norway does not have ethnic minorities except for a very small group of Sami. However, there are two major languages, the standard bokmål spoken in the cities and nynorsk, which was created in the 1850s by combining several oral rural dialects. Furthermore, an orthodox lay movement dating back to the eighteenth century established itself within the Lutheran state church. This pietistic fundamentalism was reinforced by a popular movement against the consumption of alcohol, which won a referendum on total prohibition in 1918 but lost a second vote in 1926, and has supported a strict public monopoly on alcohol ever since. Norwegian society has thus been influenced by three counter-cultures based on language, religion and abstinence. Western Norway has been marked by strong Lutheran orthodoxy, teetotalism and the usage of nynorsk, while the rest of the country, in particular the centre around Oslo, has been rather secularized and uses bokmål. The centre–periphery conflict represents the combined effect of these cleavages (Bjørklund 1993: 41–53). The coalitions with regard to EU membership have formed along this conflict line, while political parties have been cross-cut by the issue (Valen 1976; Bjørklund 1996). After the establishment of Norway’s dynastic union with Denmark in 1380, it was gradually incorporated as a ‘colonial’ territory under the Danish crown. In 1814, the Norwegians succeeded in adopting their own constitution and obtaining relatively favourable terms in the new Act of Union (Riksakt ) with Sweden. In the late nineteenth century, bilateral tensions began to arise over Swedish pressures for a more integrationist revision of the Riksakt. Negotiations failed in 1905 and the Norwegian parliament unilaterally declared that the union was dissolved. The Swedish government decided against a military intervention and presented

44 Sieglinde Gstöhl Norway with several conditions for the recognition of independence. In a plebiscite, the Norwegian people approved of separation almost unanimously. Norway opted for a policy of neutrality and internationalism similar to Sweden’s focus on disarmament and, later, development aid and environmental issues (Lawler 1997: 580). On 9 April 1940, however, German troops invaded Denmark and Norway. Whereas Denmark capitulated almost immediately, the Norwegians preferred to fight and organized a resistance movement. After the Norwegian army surrendered, the king and the government fled to England and the Norwegian merchant fleet sided with the Allies. Norway’s experience as the weaker part of several ‘unions’ not only led to strong opposition to any outside interference, it also taught the country that neutrality was only second-best to joining NATO. Its foreign policy has traditionally been oriented westward towards Britain and, later, the United States. The Norwegian government shadowed the membership applications of the United Kingdom, since its trade, shipping and security interests were closely related to British interests and in the hope that, with such like-minded members as Britain and Denmark, the danger of extensive supranationalism was banned. Norwegian nationalism, which was directed ‘against Swedish political dominance and against Danish cultural dominance’ (Hylland Eriksen 1993: 48), provides a good example of how nations may be ‘invented’ with the creation of their own language, the transfer of certain aspects of peasant and fisherman culture into the urban context, and the selection of national symbols and customs (Seip 1995). In the referendum campaigns of 1972 and 1994, fears of losing the traditional Norwegian way of life in terms of a romanticized image of rural traditions and nature figured prominently. Whereas a radical democratic movement in the cities defended Norwegian values against foreign influence, a strong peasant movement in the countryside guarded traditional culture against the central authorities in the city (Hodne et al. 1992: 129). Switzerland In Swiss society, a great consensus prevails that direct democracy and federalism belong to the historically grown identity of Switzerland just as much as its neutrality (Feller et al. 1992: 39; Tanner and von Burg 1996). In addition, the domestic constraints are interwoven with a fragmentation of society and neutrality is reinforced by a traditional suspicion of foreign influence. Federalism and direct democracy have been institutionalized in the federal constitution of 1848 but have older roots. Many Swiss worry that EU membership would reduce the cantons’ influence and powers and render popular initiatives and referendums impossible in the domains of Community competences. For decades, the government constantly confirmed that EU membership ‘would have repercussions on federalism and direct democracy, which both play an important role for Swiss identity’ and call the credibility of neutrality policy into question (Switzerland 1988: 121–2; Switzerland 1960: 859–60). According to the Swiss conception of neutrality, a permanently neutral state

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must aim at a policy which avoids any obligations in peacetime that might in the case of war prevent it from following the rules of neutrality law. Hence, neutrality required the abstention from military alliances but also from the loss of treatymaking power in an economic union (Schindler 1990: 91–119). The roots of Swiss neutrality date back to the sixteenth century. On the one hand, the cantons refused to give up their local autonomy for a common, centralized leadership which would have been necessary to continue their expansive foreign policies. On the other hand, Swiss participation in the religious wars would have destroyed the Confederation which was split in half between Catholics and Protestants, and without neutrality Switzerland most probably would have turned into the great powers’ theatre of war on account of its geopolitical position. At the Peace Congresses of Vienna and Paris in 1815, Switzerland’s permanent neutrality was formally recognized by the European great powers. The fact that Switzerland, like Sweden, has enjoyed peace ever since the Napoleonic wars contributed to the national myth of being a special case (Sonderfall ) in Europe. At the end of the Cold War, the government supported a more restricted interpretation of neutrality, basically reducing it to military neutrality in armed conflicts (Switzerland 1993: Annex, 82–8). Moreover, it announced that the credibility of Swiss neutrality would not suffer from EU membership and that Switzerland would not have to renounce direct democracy and federalism which could be adjusted without endangering national identity (Switzerland 1992: 23–7, 114–23). With German-, French-, Italian- and Romansh-speaking groups, Swiss society displays a high ethno-linguistic fragmentation. An analysis of the results of national referendums over more than a century revealed that language was a more important factor than religion, education, age or party membership (Kriesi et al. 1996). The religious cleavage between Protestants and Catholics and the rural– urban conflict have been relatively unsalient in integration matters (Kriesi et al. 1993: 36; Sciarini and Listhaug 1997: 413). In contrast to Norway, the linguistic, religious and regional cleavages are to a large extent cross-cutting. Not all Swiss Germans are Catholic, conservative and rural and not all French-speaking Swiss are Protestant, liberal and urban. Still, the francophone Swiss (or Romands) tend to have a cosmopolitan and integration-friendly outlook, whereas the Germanspeaking majority is oriented more towards traditional values (Ruffieux and Thurler Muller 1989). As in Norway, the Swiss voters did not follow their elites in the re-evaluation of the importance of certain aspects of national identity. In the 1992 EEA referendum, the linguistic cleavage accounted for about 70 per cent of the variance between ‘yes’ and ‘no’ (Kriesi et al. 1993: 32–42). History helps to account for the populist, anti-establishment feelings particularly in the German-speaking part of Switzerland. In the thirteenth century, some Swiss German valleys had become well-established communities of largely free peasants under the leadership of powerful families whose most important civic activity was the administration of justice in the name of the emperor. In their famous oath taken on the Rütli meadow in 1291, which came to symbolize the birth of the Swiss Confederation, these communities swore that ‘we shall accept no

46 Sieglinde Gstöhl judge nor recognise him in any way if he exercise his office for any reward or for money or if he is not one of our own and an inhabitant of the valleys’ (Steinberg 1976: 13). Later, the legend of William Tell, the hardy mountaineer who defied the Habsburgs and refused to bow down to anybody, became another symbol for Swiss liberty. Cross-country comparison Switzerland shows a unique combination of federalism and direct democracy, while Sweden and Norway have maintained particular welfare models. In contrast to the homogeneous Swedish society, Switzerland stands out as fragmented by language and Norway is characterized by a very strong centre–periphery cleavage. Swedish neutrality policy has, in the post-war period particularly, been contingent upon the East–West conflict with a distinct internationalist orientation, while Switzerland, whose neutrality has historically also fulfilled a domestic cohesion function, was more cautious. In Norway and Switzerland, resistance to foreign rule played a crucial role in nation-building and has left a mark on attitudes towards supranational integration. The profound mistrust of ‘foreign judges’ provokes similar negative reactions in Switzerland to the notion of a ‘union’ in Norway. Table 2.2 summarizes the three countries’ potential political obstacles to EU membership (in italics). The fact that Norway and Switzerland face more potential conflicts than Sweden between their national identities and EU membership helps explain the different integration outcomes in the 1990s. Sweden knows no relevant societal cleavages or experiences of foreign rule, while the success of both the welfare model and neutrality had been called into question. External events such as an increasingly interdependent economy and the end of the East–West bloc confrontation played a relatively smaller role for Norway and Switzerland, whose integration policies were still constrained by societal, institutional and historical identity factors. Table 2.2 Potential identity-related constraints to integration (in italics) Domestic and geohistorical features

Sweden

Norway

Switzerland

Welfare state model Political system Governance structure Religious cleavage

Nordic model representational centralized –

continental direct democracy federalism Catholic–Protestant

Ethno-linguistic cleavage Regional cleavage ‘Colonization’ by WWII occupation by Alignment policy

– urban–rural – – freedom from alliances

Nordic model representational centralized orthodox–liberal Lutheran nynorsk–bokmål centre–periphery Denmark and Sweden Germany NATO membership

German–Romance urban–rural Habsburg Empire – permanent neutrality

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Conclusion Surmounting stubbornness? By the time the three countries submitted their membership bids in 1991/2, the EU was already forty years old. As the outcome of the national referendums confirmed, Swedes were at that time more willing to view EU membership as a way of ‘protecting’ national identity, whereas Norwegians and Swiss stubbornly held on to the idea of separateness from the European Union, which they perceived as a threat to their national identities. In addition, economically successful Norway and Switzerland could more easily afford to stay outside the EU than crisis-ridden Sweden. The Swedish foreign minister af Ugglas (1992: 8) made clear that politicians have to take the lead in explaining to their citizens why ‘modern Europeans must be able to handle a triple identity – regional, national and European’ and that they have to ‘show the public that these three identities are not only compatible but also desirable.’ If Norwegian and Swiss elites are to convince voters in the future, they must not only confront well-organized economic interest groups such as farmers and fishermen (e.g., by means of liberalization and domestic reforms), but introduce new ideas into the national discourses. EU proponents must fight the perception that they are less Norwegian or Swiss, and they have to demonstrate that European identity is not to replace, but complements and enriches, national identity. Both countries are likely to revive their EU membership applications in the coming years. In 1999, the Swiss government initiated a public debate on the grounds of which it will decide in the legislative period 2003–7 whether the domestic support for taking up accession negotiations with the EU are given. It stated that ‘joining the EU would allow Switzerland to bring its identity and specific cultural characteristics to bear, where decisions affecting it are taken’ and that ‘European identity does not develop at the cost of national, regional or local identities’ (Switzerland 1999: 319–23). One year later, the Norwegian government issued an integration report which invited people to discuss European policy (Norway 2000). To conclude, economic interests are critical in the EU membership debate, yet images of the ‘self’ and the European ‘other’ matter as well, in that they construct the political impediments to integration. A country is likely to be less stubborn, the higher the expected economic benefits and the weaker the domestic and geohistorical identity constraints. Improved access to export markets and other economic benefits expected from membership may lose their temptation when domestic institutions, societal cleavages, foreign policy traditions and experiences of foreign rule that touch on national identity come into play. In order to be able to explain the varying willingness of states to integrate, both material and ideational factors are necessary. Further research on their interaction and on how to overcome identity-related obstacles is becoming increasingly salient as the integration process encroaches upon more sensitive issue areas and enlargement multiplies the European Union’s heterogeneity. I suspect that societal cleavages

48 Sieglinde Gstöhl and recollections of foreign rule and a struggle for independence are more arduous than institutional features such as the welfare model, neutrality, parliamentary sovereignty, direct democracy or federalism. The experience with Denmark and Britain seems to point in such a direction.

Notes 1 Elsewhere I put forward, operationalize and substantiate the following hypothesis (Gstöhl 2002): the lower the economic incentives and the higher the political impediments to integration, the more reluctant is a country’s integration policy (that is, the lower the level of integration aimed at). 2 There are important substantial and institutional differences between the EEA and EU membership (e.g., agriculture, fisheries, common commercial policy, monetary union, taxation, the budget or political cooperation). Switzerland’s bilateral agreements with the EU entering into force in 2002 fall short of the EEA, but they partly diminish NTB for Swiss exports. 3 Actually, he looks only at the average growth rate of the original EC-6. 4 Ingebritsen (1998: 36–7, 117) defines the leading sector as the largest single contributor to national revenue, but in fact presents statistics only on the principal export shares. 5 I follow the Weberian maxim that material and ideational interests, rather than ideas, directly govern behaviour, even though the world-views created by ideas often determine the tracks along which the dynamics of interests push action. Collective ideas about national identity are not mere ‘transmission belts’ for material interests but may have an exogenous impact on national preferences. For constructivists who view preferences changing as a result of persuasion and socialization (i.e., autonomous changes in ideas), this is still a rationalist claim (Checkel and Moravcsik 2001: 229). 6 According to Bloom (1990: 52), national identity ‘describes that condition in which a mass of people have made the same identification with national symbols . . . so that they may act as one psychological group when there is a threat to, or the possibility of enhancement of, these symbols of national identity’. 7 An analysis of the official reasoning confirms that the maintenance of an independent Swedish foreign policy was the decisive argument against EC membership for three decades (Ruin 1988: 37).

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Bulmer, S. (1992) ‘Britain and European Integration: Of Sovereignty, Slow Adaptation, and Semi-Detachment’, in S. George (ed.), Britain and the European Community: The Politics of Semi-Detachment. Oxford: Clarendon Press, 1–29. Checkel, J. T., and Moravcsik, A. (2001) ‘A Constructivist Research Program in EU Studies?’, European Union Politics, 2: 219–49. Christiansen, T., Jørgensen, K. E., and Wiener, A. (1999) ‘The Social Construction of Europe’, Journal of European Public Policy, 6: 528–44. Dosenrode-Lynge, S. Z. von (1993) Westeuropäische Kleinstaaten in der EG und EPZ. Chur: Rüegger. Erlander, T. (1961) ‘“Metal Speech” by Prime Minister Erlander at the Congress of the Swedish Steel and Metalworkers’ Union on 22 August 1961’, in Documents on Swedish Foreign Policy 1961. Stockholm: Royal Ministry for Foreign Affairs, 115–23. Esping-Andersen, G., and Korpi, W. (1987) ‘From Poor Relief to Institutional Welfare States: The Development of Scandinavian Social Policy’, in R. Erikson et al. (eds), The Scandinavian Model: Welfare States and Welfare Research. Armonk, NY: M.E. Sharpe, 39–74. Feller, M. et al. (1992) ‘Zusammenfassung und Versuch einer Synthese der wissenschaftlichen Diskussion’, in E. R. Weibel and M. Feller (eds), Schweizerische Identität und Europäische Integration: Elemente schweizerischer Identität: Hemmnisse oder entwicklungsfähige Grundlagen für eine Annäherung an Europa? Berne: Paul Haupt, 15–48. Gaarder, A., and Christensen, Ø. (1992) ‘Den nordiske velferdsstatsmodellen i det nye Europa’, in I. B. Neumann (ed.), Hva skjedde med norden? Fra selvbevissthet til rådvillhet. Drammen: Cappelen, 148–98. Gstöhl, S. (2002) Reluctant Europeans: Sweden, Norway and Switzerland in the Process of Integration. Boulder, CO: Lynne Rienner. Heclo, H., and Madsen, H. (1987) Policy and Politics in Sweden: Principled Pragmatism. Philadelphia, PA: Temple University Press. Hodne, T. E., et al. (1992) Norge og unionen: overnasjonalitet i det nye Europa. Oslo: Europeisk Ungdom. Huldt, B. (1994) ‘Sweden and European Community-Building 1945–92’, in S. Harden (ed.), Neutral States and the European Community. London: Brassey’s, 104–43. Hylland Eriksen, T. (1993) Typisk norsk: essays om kulturen i Norge. Oslo: C. Huitfeldt. Ingebritsen, C. (1998) The Nordic States and European Unity. Ithaca, NY: Cornell University Press. Kriesi, H., et al. (1993) Analyse de la votation fédérale du 6 décembre 1992. Berne: Institut de recherche pratique GfS; Geneva: Département de science politique de l’Université de Genève. Kriesi, H., et al. (1996) Le clivage linguistique: problèmes de compréhension entre les communautés linguistiques en Suisse. Berne: Office fédéral de la statistique. Kronsell, A., and Svedberg, E. (2001) ‘The Duty to Protect: Gender in the Swedish Practice of Conscription’, Cooperation and Conflict, 36: 153–76. Lawler, P. (1997) ‘Scandinavian Exceptionalism and European Union’, Journal of Common Market Studies, 35: 565–94. Lindbeck, A., et al. (1994) Turning Sweden Around. Cambridge, MA: MIT Press. Luif, P. (1995) On the Road to Brussels: The Political Dimension of Austria’s, Finland’s and Sweden’s Accession to the European Union. Vienna: Braumüller. Marcussen, M., et al. (1999) ‘Constructing Europe? The Evolution of French, British and German Nation State Identities’, Journal of European Public Policy, 6: 614–33. Mattli, W. (1999) The Logic of Regional Integration: Europe and Beyond. Cambridge: Cambridge University Press.

50 Sieglinde Gstöhl Moravcsik, A. (1998) The Choice for Europe: Social Purpose and State Power from Messina to Maastricht. Ithaca, NY: Cornell University Press. Mourik, A. van (1997) ‘The Economic Theory of Customs Unions and Free Trade Areas’, in M. O. Hösli and A. Saether (eds), Free Trade Agreements and Customs Unions: Experiences, Challenges and Constraints. Brussels and Maastricht: Tacis European Commission and European Institute of Public Administration, 19–34. Neumann, I. B. (2001) ‘The Nordic States and European Unity’, Cooperation and Conflict, 36: 87–94. Norway (1994) St.meld. nr. 40 (1993–94) Om medlemskap i Den europeiske union. Oslo: Ministry for Foreign Affairs, 3 June. Norway (2000) St.meld. nr. 12 (2000–2001) Om Norge og Europa ved inngangen til et nytt århundre. Oslo: Ministry for Foreign Affairs, 1 December. Olssen, U. (1993) ‘The Swedish Social Democrats’, in R. T. Griffiths (ed.), Socialist Parties and the Question of Europe in the 1950s. Leiden: E.J. Brill, 221–38. Østergård, U. (1992) ‘Peasants and Danes: The Danish National Identity and Political Culture’, Comparative Studies in Society and History, 34: 3–27. Petersen, N. (1996) ‘Denmark and the European Union 1985–96: A Two-Level Analysis’, Cooperation and Conflict, 31: 185–210. Risse, T. (2001) ‘A European Identity? Europeanization and the Evolution of Nation-State Identities’, in M. Green Cowles, J. Caporaso and T. Risse (eds), Transforming Europe: Europeanization and Domestic Change. Ithaca, NY: Cornell University Press, 198–216. Robinson, E. A. G. (ed.) (1963) Economic Consequences of the Size of Nations. London: Macmillan. Ruffieux, R., and Thurler Muller, A.-L. (1989) ‘L’opinion publique face à l’intégration européenne: que disent et ne disent pas les sondages?’, in R. Ruffieux and A. Schachtschneider Morier-Genoud (eds), La Suisse et son avenir européen: une analyse des positions suisses face à l’intégration de l’Europe. Lausanne: Payot, 237–52. Ruin, P. (1988) Svensk neutralitetspolitik: hur har den bedrivits i EG-frågan? University of Lund: Department of Political Science, Trebetygsuppsats. Schindler, D. (1990) ‘Vereinbarkeit von EG-Mitgliedschaft und Neutralität’, in O. JacotGuillarmod et al. (eds), EG-Recht und schweizerische Rechtsordnung: Föderalismus, Demokratie, Neutralität, GATT und europäische Integration. Basel: Helbing & Lichtenhahn, 81–137. Sciarini, P., and Listhaug, O. (1997) ‘Single Cases or a Unique Pair? The Swiss and Norwegian “No” to Europe’, Journal of Common Market Studies, 35: 407–38. Seip, A.-L. (1995) ‘Nation-Building within the Union: Politics, Class and Culture in the Norwegian Nation-State in the Nineteenth Century’, Scandinavian Journal of History, 20: 35–50. Steinberg, J. (1976) Why Switzerland? Cambridge: Cambridge University Press. Sweden (1994a) Regeringens proposition 1994/95:19 Del 1 om Sveriges medlemskap i den Europeiska unionen. Stockholm: Ministry for Foreign Affairs, 11 August. Sweden (1994b) Sverige och den västeuropeiska integrationen: sammanfattning av Konsekvensutredningarna. Stockholm: Utrikesdepartementets Handelsavdelning, March. Switzerland (1960) Botschaft des Bundesrates an die Bundesversammlung vom 5. Februar 1960 über die Beteiligung der Schweiz an der Europäischen Freihandels-Assoziation. Berne: Federal Council, 5 February. Switzerland (1988) Bericht des Bundesrates vom 24. August 1988 über die Stellung der Schweiz im europäischen Integrationsprozess. Berne: Federal Council, 24 August. Switzerland (1992) Bericht des Bundesrates vom 18. Mai 1992 über einen Beitritt der Schweiz zur Europäischen Gemeinschaft. Berne: Federal Council, 18 May.

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Switzerland (1993) Bericht des Bundesrates vom 29. November 1993 über die Aussenpolitik der Schweiz in den 90er Jahren. Anhang: Bericht zur Neutralität. Berne: Federal Council, 29 November. Switzerland (1999) Schweiz–Europäische Union: Integrationsbericht 1999. Berne: Federal Council, 3 February. Tanner, A., and von Burg, D. (1996) ‘Arbeitsgruppe “Politische Aspekte schweizerischer Identität”’, in W. Linder et al. (eds), Schweizer Eigenart – eigenartige Schweiz: Der Kleinstaat im Kräftefeld der europäischen Integration. Berne: Haupt, 281–9. The Times (1962) ‘Equal Footing with Great Power Groups: Full Text of Mr. Macmillan’s Case for the Common Market’, 8 October: 8. Ugglas, M. af (1992) ‘Sweden at the Heart of Europe’. Address by the Swedish minister of foreign affairs at Chatham House, London, 26 November. Valen, H. (1976) ‘National Conflict Structure and Foreign Politics: The Impact of the EEC Issue on Perceived Cleavages in Norwegian Politics’, European Journal of Political Research, 4: 47–82. Valen, H., and Rokkan, S. (1974) ‘Norway: Conflict Structure and Mass Politics in a European Periphery’, in R. Rose (ed.), Electoral Behavior: A Comparative Handbook. New York: Free Press, 315–70. Viklund, D. (1989) ‘Neutraliteten som svensk EG-hinder’, in C. B. Hamilton et al. (eds), Europa och Sverige: EF-frågan inför 90-talet. Stockholm: SNS, 253–60. Wæver, O. (1992) ‘Nordic Nostalgia: Northern Europe after the Cold War’, International Affairs, 68: 77–102. Wahlbäck, K. (1986) The Roots of Swedish Neutrality. Stockholm: Swedish Institute. Wendt, A. (1994) ‘Collective Identity Formation and the International State’, American Political Science Review, 88: 384–96.

3

The demand-side politics of EU enlargement Democracy and the application for EU membership Walter Mattli and Thomas Plümper

Introduction Shortly after the Copenhagen Summit of 1993, the German foreign minister, Klaus Kinkel, announced a comprehensive programme for a European Union (EU) Ostpolitik and pledged to promote it during Germany’s presidency of the Union, which started on 1 July 1994. Such an Ostpolitik was not confined to Hungary, Poland, Slovenia, the Czech Republic, Romania, and Bulgaria, that is, countries with which the EU had already signed cooperation agreements, but included Ukraine, Russia and other states to the east of the EU. Kinkel stressed, in particular, the importance of bringing Ukraine quickly within the European cooperation system to ease the severity of its economic crisis and to diffuse tensions between Kiev and Moscow, two developments that threatened to affect the EU adversely. Shortly thereafter, the Community took the first concrete steps towards a comprehensive Ostpolitik by signing economic cooperation agreements with countries such as Ukraine, Russia, and Belarus. This episode illustrates that the boundaries of an enlarged EU were not clearly drawn in the minds of EU leaders during the first half of the 1990s. It thus is difficult to argue that the submissions of EU membership application by some Central and Eastern European countries (CEECs) during those years were motivated primarily by a clear understanding of what countries the EU would deem acceptable. Further, even though the EU had signed various types of economic cooperation agreements with the CEECs, it was careful not to encourage these countries to push for membership.1 Indeed, a senior Commission official noted in the mid-1990s that ‘the [EU’s current] level of seriousness about enlargement is not minimal, it simply does not exist.’2 This raises a key analytical question that this chapter seeks to address: Why did some CEECs apply for EU membership while others showed no interest in doing so? A related question is: what explains the timing of application? We claim that most theoretical arguments about enlargement provide only partial answers to these questions because they focus on the supply side of

The demand-side politics of EU enlargement 53 enlargement, that is, they seek to elucidate why the Union may have an interest in accepting the CEECs. Supply-side arguments, which we review in the following section, are essential building blocks of a comprehensive account of enlargement, but they are not enough. They must be complemented by a theory that seeks to understand the politics and economics of enlargement from a demand-side perspective. It can be summarized as follows. By the early 1990s, virtually all political leaders in the CEECs had successfully implemented quick ‘first-round’ reforms, such as price liberalization and smallscale privatization, bringing economic crises under control. With the worst over, the leaders now responded quite differently to the need for implementing politically much more costly and protracted ‘second-stage’ reforms, including large-scale privatization, enterprise restructuring, and legal and administrative reforms. We argue that leaders in more democratic regimes had a greater incentive to push ahead with these costly ‘institution-building reforms’ which, in effect, aligned their countries with EU rules and institutions. The impetus for continuing pro-integration regulatory reforms came from the greater electoral accountability of these leaders. Indeed, they saw reforms establishing sound private governance supported by effective judicial and administrative institutions as the most promising way to generate and attract investments needed for vigorous economic growth. The successful launching of ‘second-stage reforms’ naturally led these leaders to contemplate EU membership application; indeed, by submitting an application, they expressed confidence in their country’s ability and willingness to hurdle remaining internal obstacles to EU membership and work towards satisfying all membership requirements. An application thus represented a very public form of commitment to continuing deep institutional reforms. Leaders in less democratic regimes, however, had less of an incentive to institute protracted welfare-enhancing regulatory reforms that were bound to alienate politically powerful special interest groups. As a result, the idea of applying for EU membership was of no appeal to them. We test the hypotheses derived from our model applying a Cox survival regression with time-varying co-variates. This method allows us empirically to model the impact of time on the application process. The results strongly confirm the dominant impact of democratic structures on the likelihood of application. Once we control for these structures, only foreign economic openness and GDP per capita influence the likelihood and timing of an EU application. The study by Frank Schimmelfennig (ch. 8 this volume) finds similarly that the more democratic a state, the more likely it is to establish institutionalized relations with the EU and apply for membership. Drawing on constructivist theory, however, he explains this finding with reference to the force of mutual attraction sensed by states sharing liberal democratic values: the higher the degree of normative or cultural match, the faster and deeper the process of horizontal institutionalization. We do not deny the power of norms and culture in the process of integration but simply propose an additional explanation for why leaders in more democratic regimes may find EU membership attractive.

54 Walter Mattli and Thomas Plümper

Review of the theoretical arguments about enlargement This section reviews the main theoretical arguments about enlargement, which we classify as supply-side arguments. Its purpose is to clear the way for the demandside theory of section three by bringing out the limitations of supply-side explanations, whose focus is on the EU members’ motives for admitting new countries located in Central and Eastern Europe (CEE). Supply-side arguments would be analytically sufficient to account for EU enlargement if the leaders in all CEECs were filled by some sort of invariant, homogeneous, and natural desire to be part of the EU. The timing of membership would then be determined entirely by EU member states. We argue, however, that such desire is a myth and thus cannot be assumed. What we need instead is a theory that clearly and fully specifies the incentives and constraints of political leaders in different types of regimes across CEE. Such a demand-side account complements extant supply-side arguments. First supply-side argument: negative externalities The first argument assumes that the leaders of a union seek to maximize economic growth and prosperity of that union; they thus are unlikely to accept as new members countries that are undesirable candidates in the sense of being unable to make a net positive contribution to the union (e.g., through net payments into the common budget, or by offering obvious commercial advantages) – unless the exclusion of such candidates is costlier to the union than accepting them. More precisely, the argument is that an incentive for accepting poor and commercially unattractive countries exists when negative externalities originating in these outsider countries threaten to disrupt the union’s stability, security, and prosperity. The sources of these externalities may reside in economic mismanagement, political instability, or social unrest. A particularly common form of negative externality is illegal immigration. Economic inclusion through integration rather than exclusion, goods rather than people, trade instead of migration may become elements of an expedient integrative formula for defusing the threat of social disruption caused by such illegal immigration – especially when a union’s labour market is saturated.3 Trade and investment may raise living standards and increase employment opportunities, thus easing the pressure to migrate (Hollifield 1992a, 1992b; Hiemenz and Schatz 1979). Events in Eastern Europe in the early 1990s suggest that the scope of negative externalities originating in the periphery of the EU did indeed shape the attitude of its members regarding enlargement to the east. The EU’s eastern periphery was moving from an era of communism and rigid command economies towards a goal of democratic pluralistic regimes with market economies. This transformation represented a gargantuan social experiment of uncertain outcome. Its failure threatened to play havoc with Western European projects for monetary and political union and seriously risked undoing most of the EU’s progress up to that point in economic integration. Above all, Western Europe feared massive migratory movements if the process of political transition and economic restructuring in

The demand-side politics of EU enlargement 55 the East went awry. Economic ‘push’ factors, such as rising unemployment, food shortages, and a decline in the already precarious standard of living, combined with ethnic tensions and mounting criminality, had already motivated hundreds of thousands to move west. In the early 1990s the United Nations high commissioner for refugees predicted as many as 25 million refugees from all over Eastern Europe if political instability and unfavourable socio-economic conditions continued (Shevtsova 1992).4 The threat of such massive migration caught Western Europe at a particularly unwelcome time. In 1991, there were 15 million unemployed workers in Western Europe, of which 12 million resided in the EU. This amounted to some 6 per cent of the population of Western Europe. The unemployment rate among those aged under twenty-five averaged 35 per cent. With the onset of the recession in the early 1990s these numbers stood to rise significantly. Immigration was rapidly becoming a core issue of electoral campaigns in many European countries. The growing number of foreigners that were competing with indigenous workers for a dwindling number of jobs fomented xenophobia and exacerbated social tensions. Clearly the problem of migration had to be tackled at source rather than through a policy of containment. The West responded to the plight in the East initially by offering technical assistance and advice in areas such as food distribution, privatization, banking, civil service reform, education, environment and energy through the PHARE and the TACIS programmes.5 Economic loans were provided by the European Investment Bank (EIB). The European Bank for Reconstruction and Development (EBRD) concentrated its lending in the nascent private sector. In addition to such traditional aid, the Community signed on 16 December 1991 far-reaching association agreements (also called ‘Europe Agreements’) with Czechoslovakia, Hungary and Poland, under which the EU promised to remove its barriers to industrial imports from the three countries within five years.6 Still, Jackie Gower notes that [u]ntil the summer of 1991 the prevailing view in Brussels was that none of the former Comecon states could realistically be regarded as candidate members of the Community until well into the next century. Indeed, it is arguable that the EU’s overriding objective at this time was to avoid the question of membership. However, this objective proved insufficient. The attempted Soviet coup of August 1991 signalled to the West that more effort was needed to avert chaos (Mortimer 1992: 21). Gower concludes that the shock of the attempted Moscow coup changed the EU’s attitude towards enlargement (Gower 1993). Avoidance was simply no longer a sensible policy option. Thus, the EU signed similar association agreements with Romania and Bulgaria in 1993. More trade agreements between the Community and former Comecon countries followed shortly thereafter. Crucially, the Copenhagen European Council of June 1993 for the first time acknowledged the membership perspective of the associated countries.

56 Walter Mattli and Thomas Plümper This remarkable flurry of initiatives notwithstanding, the political will in the EU to carry out plans for further integration cooled markedly in 1995. A reason consistent with the logic of the externality argument is that the early market concessions of the EU were successful in warding off the threat of mass migration. The Union’s share of former Comecon countries’ exports and imports rose from 20 per cent in 1988 to almost 50 per cent in 1992 and has grown continuously ever since (Eurostat, various issues). Increased trade, in turn, prompted brisk exportled economic growth that helped to re-establish a semblance of order and stability in the East. In view of this success it was not clear why the EU would have had an incentive to deepen integration with the East. In sum, the negative externalities argument holds that the waxing and waning of a union’s willingness to seek closer economic ties with outsiders depends on the extent of actual or potential crisis spillover from neighbouring countries. While this argument captures an important supply side motivation, its limitations are apparent. First, it does not account well for the resumption and intensification of accession talks in the late 1990s, especially with countries such as Hungary, Poland, and the Czech Republic, by then stable democracies with booming economies. Second, it fails to offer clear theoretical guidance as to which type of integration a union is willing to supply to the periphery to minimize negative externalities; indeed, the argument seems to be compatible with a broad range of integration types, including free-trade areas, customs unions, common markets, and economic communities. Finally, the argument is at a loss to explain the varying pace of application across the CEECs. Second supply-side argument: economic gains The second argument holds that the EU is enlarging to reap large economic gains, and that the main beneficiaries (and thus supporters) of enlargement are multinational corporations (MNCs) in the EU and firms with large export interests in CEE (Brancati 2001). Investment theories suggest that MNCs’ intangible assets (such as special managerial and marketing skills, patented or non-marketable technologies, and cheap sources of finance) provide strong incentives for expanding production into CEE, particularly if pulled by location-specific advantages, including low labour costs, skilled or non-unionized labour, low material costs, access to extractive resources, and market proximity (Caves 1996; Dunning 1989). Trade theorists argue that larger markets help firms achieve economies of scale in production; that is, an increase in production lowers the average cost of output per unit. The phenomenon of extensive intra-industry trade among industrialized countries attests to the importance of economies of scale in production. Another argument is that trade is beneficial because it permits countries to exploit their comparative advantage. A comparative advantage arises when the marginal opportunity costs of producing one good in terms of another good differ between countries. Thus a country gains from specializing in the production and export of

The demand-side politics of EU enlargement 57 those goods which it can produce at relatively low cost (i.e., goods in which it is relatively more efficient than other countries). Trade and investment are not necessarily separate activities. The existence of trade-related investment blurs the distinction. Trade-related investment is very common in international trade. One reason is that the process of specialization according to comparative advantage involves investment in increased productive capacity to service export markets. Trade-related investment can also involve vulnerable assets that are located abroad, such as transportation or storage facilities (Yarbrough and Yarbrough 1992). In short, investment generates trade, and trade attracts investment. The risks of doing business in the CEECs, however, are numerous. First, there is uncertainty: economic mismanagement and socio-political unrest may render foreign assets or trade-related domestic investment worthless. Second, host countries may act opportunistically and implement measures of ‘creeping expropriation’ through laws and regulations that deprive investors of the value of their contract. EU enlargement, however, would mitigate many of these risks; it would not only improve the overall climate of conducting business in CEE and offer new investment opportunities, it would also reduce investment transaction costs for MNCs and traders from Western Europe by extending EU rules, regulations, and policies, as well as EU monitoring and dispute resolution institutions, to CEE. Lower costs of doing business in the CEECs will encourage MNCs to rationalize production on a broader regional basis which, in turn, will help them to compete more effectively in world markets (Brancati 2001). Consistent with this argument, countries with strong business interests in CEE, such as Germany and the United Kingdom, have been the most eager to push the enlargement agenda. Also consistent with the argument, the EU favoured membership talks in the late 1990s with those countries that were the most advanced reformers politically, institutionally, and economically and thus posed the smallest risk both to MNCs and to EU governments.7 Third supply-side argument: norms Schimmelfennig has recently argued that economic gains alone cannot explain why the EU as a whole embraced enlargement and opened accession talks in March 1998 (Schimmelfennig ch. 7 this volume). Not all EU members stand to gain from enlargement, and the states that stand to lose have long been fighting for their own national economic interests. In the early 1990s, for example, Portugal blocked further liberalization of trade with CEE in textiles, France vetoed concessions on beef, and Spain blocked agreement on steel trade; such obstruction tactics continued in later years (Schimmelfennig ch. 7: 149). Schimmelfennig claims that the promoters of enlargement eventually succeeded in backing up their own selfish goals and pushing the enlargement agenda through by invoking the Community’s traditional pan-European orientation and its liberal

58 Walter Mattli and Thomas Plümper constitutive values and norms and shaming the opponents into acquiescing in enlargement. In other words, the strategic use of norm-based argumentation rendered attacks on pro-enlargement justification illegitimate and inappropriate, thus changing the bargaining power within the EU in favour of those who supported enlargement. The rhetorical entrapment of opponents worked, in part, because the promoters focused first only on those countries in CEE that had made the greatest progress in laying down a solid foundation for civil and political rights and instituting societal pluralism, the rule of law, and democratic political participation, as well as private property and a market-based economy. These states seemed to share fully the collective values of the EU. Proponents could thus effectively decry attempts by opponents to obstruct the enlargement process as acts of disloyalty to the ideational foundations of European integration. This account compellingly supplements the earlier argument based solely on economic gains. On its own, however, it inevitably raises several questions. First, was the initiation of accession talks truly the result of rhetorical entrapment rather than silent threats or side-payments by the biggest and wealthiest EU members? Also, it is not entirely clear why ‘rhetorical entrapment’ took so long to work. The demarcation line between promoters and opponents of enlargement was drawn as early as 1991; however, the many normative arguments in favour of enlargement did not seem to have much ‘entrapment power’ in earlier years. Nevertheless, Schimmelfennig’s argument is plausible and constitutes a sophisticated statement of the power of norms in the process of enlargement.

The missing link: the demand side of enlargement Each of the supply-side arguments captures an important motivation driving the enlargement process. Together they provide a comprehensive analytical picture of the forces that led the EU to open its large economy to the CEECs. Supply-side theoretical arguments, however, cover only half the story of the widening of the EU; they leave unanswered questions pertaining to the demand side of enlargement. Most notably, why have some CEECs shown great eagerness in EU membership while others have adopted decidedly reserved views on the desirability of such membership; and what explains the varying pace of application across the CEECs? Most arguments on the demand side are ad hoc, underspecified, and untested. One argument is inspired by constructivist theory and holds that the desire of CEECs to join the EU is fuelled by a strong sense of identification with liberal democratic values that are fundamental to the EU, namely rule of law, social and political pluralism, private property, and free speech (Schimmelfennig ch. 8 this volume). Further, accession is viewed as a natural act of reunion of two parts that belong to a single cultural tradition and historic heritage. The argument is attractive but possibly underspecified; it juxtaposes two factors, namely norms and desire to join the EU. What arguably is missing is a clearly and fully specified causal mechanism linking democracy and pro-integration preferences and policy outcomes.

The demand-side politics of EU enlargement 59 The second demand-side argument takes a more prosaic view of the preferences of the CEECs and holds that the appeal of membership resides in the promise of technical and financial assistance, rapid economic growth, and prosperity. Indeed, the EU has expressed its willingness to share the enormous cost of modernizing the economies of the candidate countries and of aligning their laws and infrastructures with the acquis communautaire. Further, the EU provides extensive financial and expert assistance through the PHARE programme, which has been remodelled to become an accession-targeted instrument. The programme’s budget of €1.5 billion supports the effort of candidate countries to build strong administrative and judicial apparatuses capable of effectively implementing and enforcing the acquis. EU policies towards the CEECs are also frequently supported by the lending activities of the EIB. Further, the EU dispatches technical experts from ministries, regional bodies, public agencies, and professional organizations in the member states to counsel and instruct their homologues in the candidate countries. These regular high-level contacts between representatives of ministries from the CEECs and the various directorates of the European Commission, as well as a multitude of other meetings within the framework of several partnership programmes, have established dense political and bureaucratic networks that serve to provide continuing legal guidance and technical support.8 The greatest economic benefit of EU accession, however, is the flow of transnational capital into the region (Mattli 1999: 44–50, 105–8; Baldwin et al. 1997; Lankes and Venables 1996; Economist Intelligence Unit 1999; European Round Table of Industrialists 1999). Foreign direct investment (FDI) grew from $3.6 billion in 1992 to $5 billion in 1994 and $11.3 billion in 1997.9 The EU countries have been the most important source of foreign direct investment in the CEECs. In 1997, for example, the EU accounted for 61 per cent of the FDI stock in the Czech Republic, 63 per cent in Hungary, and about 55 per cent in Poland (United Nations 1998). Several recent studies predict that the influx of capital into the region will double or triple once the CEECs attain the status of full members of the EU. Full membership will offer other attractive advantages: the CEECs will have unrestricted access to the single European market and will no longer have to fear reversals of free trade in sensitive areas. Agriculture, a large segment of the CEECs’ economies, is likely to see its exports boosted with accession. In sum, the economic benefits of enlargement unquestionably constitute a powerful force driving the demand of membership. However, as with the normbased demand-side argument, the economic argument is underspecified. As a result, it cannot explain the resistance of some political leaders in CEE to enlargement and the cross-country variation in the timing of application. We seek to explain these puzzles within a political economy framework.

The model Frank Schimmelfennig and Ulrich Sedelmeier (ch. 1 this volume) aptly define enlargement as gradual horizontal institutionalization, that is, a process by which

60 Walter Mattli and Thomas Plümper the gap in rules and institutional arrangements between insiders of a union and the outsiders progressively becomes narrower. This narrowing is the result of successive rounds of pro-integration regulatory reforms and institutional adjustments to EU norms and practices undertaken by outsiders. The task for the formerly communist countries in CEE is gargantuan and fraught with difficulties. Building on this process-related understanding of enlargement, we view the submission of an application for membership by a CEEC as an expression at an advanced stage of reforms of that country’s ability to overcome remaining internal obstacles to EU membership and work towards satisfying all membership requirements. The confidence underlying a request for membership is rooted in the applicant’s successful domestic effort to launch and maintain a drive towards farreaching pro-integration regulatory and institutional reforms in the wake of the transition crisis. In other words, an application can be interpreted as a very public act of commitment to continuing deep institutional reforms that fully align outsiders to EU norms and rules. During the transition crisis, virtually all CEECs implemented so-called firstround reforms, including widespread liberalization of prices, external trade and currency arrangements, and small-scale privatization. These market-building measures involved few new institutional developments and thus were adopted relatively quickly. Indeed, by the early 1990s, market liberalizing reforms were in place in almost all countries in the region, bringing economic crises under control. With the worst over, the leaders in the various CEECs now faced the considerably more daunting challenges of institution-building associated with large-scale privatization, financial sector reform, enterprise restructuring, legal and administrative reforms, and other protracted reforms (see table 3.1). These reforms generally aimed at reducing the historically close ties between the political and the economic spheres. They would be neither quick nor easy since formidable vested interests were certain to resist change to keep privilege and wealth. The willingness of political leaders to take on vested interests and push ahead with far-reaching institution-building reforms aimed at aligning their countries with EU rules and institutions varied considerably. Generally, the more democratic a regime, the greater the political will, and thus the more successful the process of implementing pro-integration regulatory reforms (table 3.1). The impetus for continuing pro-integration regulatory reforms came from the greater electoral accountability of political leaders in more democratic countries. Indeed, these leaders saw reforms establishing sound private governance supported by effective judicial and administrative institutions as the most promising way to generate and attract investments needed for vigorous economic growth. The successful launching of ‘second-stage reforms’ naturally led these leaders to contemplate EU membership application. Indeed, these leaders saw reforms establishing sound private governance supported by effective judicial and administrative institutions as the most promising way to generate and attract investments needed for vigorous economic growth. They expressed confidence in their country’s ability and willingness to overcome remaining internal obstacles to EU membership and work towards satisfying all membership requirements.

The demand-side politics of EU enlargement 61 Table 3.1 The impact of democracy on ‘institution-building’ market reforms across Central and Eastern European countries

Large-scale privatization Enterprise restructuring Competition policy Banking reform Securities market liberalization Legal rules on investment

Autocracies polity < 0

Moderate democracies polity 0–7

Full democracies polity 8–10

2.25 1.75 1.50 2.25 1.75 2.00

2.83 2.33 2.17 2.50 2.33 2.50

3.00 2.57 2.43 2.86 2.43 3.00

Source: Authors’ calculations based on rankings given in the European Bank for Reconstruction and Development, Transition Report 1995 (London: EBRD, 1995), and the polity database. Note The numbers range from 1 (no or little progress) to 4 (standard of performance typical of advanced industrial economies).

By contrast, leaders in less democratic regimes were concerned that, by embracing sweeping pro-integration regulatory reform programmes, they would alienate powerful interest groups whose support they needed for political survival. As a result, they were not venturing down the road of EU membership in the wake of their more democratic homologues. To explain the level and pace of regulatory reforms leading up to EU application, we build on a standard model of political economy that considers the interaction between an opportunistic government, voters, and interest groups (Rodrik 1995). However, we go beyond this model and show how political participation relates to the degree of market distortions. In CEE, the use of market distortions as a means of increasing political support can be associated with the maintenance of old-regime-style regulations that serve primarily rent-seeking purposes. Our model predicts that in less democratic regimes the process of regulatory reforms does not move much beyond relatively easy market-building steps that minimally threaten vested interests. In our model, individual policy preferences are determined by the impact of a government’s special interest policies on individual welfare. Each individual favours such policies if and only if they affect his or her individual utility in a positive way. In the aggregate, however, special interest policies reduce the welfare of the population.10 The more prevalent such policies, the slower the pace of implementation of ‘institution-building’ regulatory reforms, and thus the smaller the likelihood that the country will apply for EU membership. An accessible formulation of this idea relates an individual’s j utility to three sources of income, his or her labour endowment, his or her income from capital ownership, and government spending which can be divided between the gains from the government’s provision of public goods g and the degree of market distortions d. It follows

I j = s Lj wL + ∑ s kj π k + σ j (g – d ) k

(1)

62 Walter Mattli and Thomas Plümper where s Lj , s kj and σ j is j’s individual shares in labour endowment (0 ≤ s Lj ≤ 1), industry profits (0 ≤ s kj ≤ 1) and net taxation (0 ≤ σ j ≤ 1), where w denotes wages and

g – d = ∑ ( pk – pk* ) mk

(2)

k

represents the sum of sectoral market distortions (expressed as an increase in the price of goods in sector k relative to the free market price),where m are the sectors indexed k and pk – pk* > 0 is the market distortion in sector k, while pk – pk* < 0 suggests that the government implements policies that include positive externalities to sector k. We assume the following resource balance constraints

mk = –

∂p ∂π Vp–1 ∑ I j – k , ᭙i, ∂pk ∂pk j

(3)

where p describes the vector of domestic prices p. Note that the model explains only relative prices so that the price of each good may serve as a denominator. The aggregate welfare of the country is maximized if

map x W * ≡ p ∑ I j.

(4)

j

Accordingly, market distortions are not only redistributive measures, they also tend to reduce the country’s aggregate welfare. A subsidy to one sector increases the net returns on capital and labour in that sector only at the expense of all other sectors

∂πk > 0. ∂pk

(5)

According to the model a social planner (that is, a government seeking to maximize aggregate welfare) intervenes in the market only to provide public goods. This raises the question of why the degree of market intervention in many transition countries remains high (high level of ‘d ’) while few ‘institution-building’ regulatory efforts are undertaken that would increase positive externalities (low level of ‘g’). Our answer is straightforward: the political survival of a government hinges not only on the support of the broader public but also on the approval by powerful interest groups. Individuals can gain influence on government activities basically by two means: they can vote and they can form interest groups l k engaging in lobbying activities in the political arena. However, the creation of interest groups may not be successful in all sectors (Olson 1965). Therefore, the actual number of interest groups n falls short of the number of sectors m. This is important because the existence of no interest groups and the existence of one interest group in each sector leads to the same efficient outcome. It can easily be obtained from equation (1) that it is the goal of each interest group to increase the price of the good in that sector, from which the members of the interest group receive their income.

The demand-side politics of EU enlargement 63 Governments in transition countries may stick to inefficient regulations to drive a wedge between actual prices and equilibrium prices (prices without intervention, such as the world market price), because in doing so they redistribute welfare to politically more powerful actors at the expense of less powerful actors. Thus, governments redistribute income in order to maximize political support. For the sake of simplicity, we assume that the government’s income from holding power is maximized if the government maximizes the time it stays in office. The government is ousted when support falls below a critical level. The incumbent would clearly prefer to hold office for an infinite time; to achieve this goal he or she may implement regulations that increase the domestic price of goods pk, k ∈m, thereby shifting income to individuals that derive income from the regulated sector k. In this case, the interest group provides political contributions that increase the incumbent’s political support, thereby ensuring his or her political survival. However, the market distortion reduces the utility which, in turn, reduces the government’s approval by the voters. The government therefore has to maximize (or satisfy) a political support function of the following kind

[ ]   

Sg (g, d ) =

n



∑C  l =1

l

α

β

+ λ [W(P )] , 0 < α, β < 1

(6)

where Cl is the political support derived from an interest group’s campaign contribution, W (P ) is the aggregate well-being of the constituency and λ ≥ 0 is a weight that takes low values in less democratic countries and high values in genuine democratic regimes.11 The incumbent faces a change in political support according to the following function   

∆Sg = ∂

n



∑C  + λ ∂W(P ). l =1

l

(7)

Hence, small deviations from the actors’ optimal point reduce their utility slightly, while larger deviations reduce their utility more rapidly. Figure 3.1 shows how an opportunistic government chooses a level of market distortions d. It depicts the voters’ and interest groups’ support of the government as a function of the degree of market disturbances. All actors, voters as well as lobby groups, are assumed to have a quadratic utility function, where small deviations from the optimum cause little loss to an individual’s utility; the marginal loss of utility rises, however, with a growing distance from an actor’s preferred point. For any given value of g voters prefer d = 0, which is the efficient regulation, lobby groups prefer d = 1. Both react elastically to changes in government policy: while the interest groups increase their support, the voter’s support gradually declines. For expositional convenience, we have multiplied the decrease in voters’ support by –1. Hence, as market disturbances increase, the support function of the voters is upward sloping but nevertheless exhibits a loss, while the aggregate support functions of lobby groups registers a gain. This allows us to identify the degree of market distortion that maximizes the government’s political support. The net effect is positive, if and only if gains in support from the interest group exceed total losses from the implementation of inefficient regulatory policies. In Figure 3.1, this

64 Walter Mattli and Thomas Plümper Change in the likelihood of the incumbent’s political survival (+/–)

Figure 3.1 Political support and government’s choice of inefficient policies.

is the case for a wide range of policies. An opportunistic government’s maximization problem can be stated as follows:12

Ug (d ) =

[

  

∂

L

]



∑C l =1

l

λ ∂[W(P )]

(8)

We relate the benevolence of a government, λ, to its responsiveness to voters’ preferences. For simplicity’s sake, we assume that interest groups provide the same absolute level of political support regardless of a country’s degree of democracy. The relative importance of the voters crucially depends on the extent to which free and fair elections take place. This is expressed by the λ, with higher lambdas indicating the larger impact of voters in more democratic political systems. Hence, interest groups in less democratic regimes tend to be more influential than those in true democracies, and, as a result, the former regimes tend to implement less efficient regulatory and economic policies than the latter (Wintrobe 1998: 341; Plümper and Martin 2001). This idea is expressed in figure 3.2. Figure 3.2 extends the logic of Figure 3.1 to two different lambdas (λ > λ′). The steeper slope of the voters’ support function –1⋅ λW (P ) indicates a more democratic country. In comparison –1⋅ λ′W (P ) depicts the effect of distortionary policies in less democratic regimes. Both types of government choose a support maximizing policy. In the democracy, this distance is maximized in d, giving a net increase in political

The demand-side politics of EU enlargement 65 Change in the likelihood of the incumbent’s political survival

Figure 3.2 The impact of regime type on the support maximizing market distortion.

support of AB. Less democratic regimes choose d ′, leading not only to a much higher net gain in support CD but also to a higher equilibrium market distortion (d ′ > d ). The model thus predicts that less democratic regimes choose more distortionary economic and regulatory policies (d ′) which put them off the path of EU membership, whereas fully democratic regimes select ‘institution-building’ regulatory reforms and thus are more likely to apply for membership in the EU. Figures 3.3a and 3.3b illustrate the varying responses of different types of regimes to economic crises and introduce an additional hypothesis according to which the severity of a crisis acts as powerful spur for reforms. They show that governments in democratic countries react more elastically to economic crises than less democratic regimes, that is, the distance between d ″ and d is larger in countries with more political participation. An economic crisis is modelled as a reduction in the political support of voters. Since we again multiply the reaction function of voters by –1, we have to move this function to the top of the diagram. This illustrates that the support of voters declines if economic performance worsens, reducing the level of market distortions in both types of regime. However, a comparison of Figures 3.3a and 3.3b reveals that less democratic governments tend to reduce the market distortions to a lesser extent. This explains why democratic governments are more likely to respond vigorously to economic crises, and may also explain why the transition difficulties under more accountable and democratic regimes were less severe and ended earlier.

66 Walter Mattli and Thomas Plümper Change in the likelihood of the incumbent’s political survival

Figure 3.3a Economic crisis and the reduction of market distortion in genuine democracies.

Change in the likelihood of the incumbent’s political survival

Figure 3.3b Economic crisis and the reduction of market distortion in less democratic countries.

The demand-side politics of EU enlargement 67

A Cox survival analysis of application The objective of this section is to test empirically the asserted causal impact of democracy and crisis severity on institution-building regulatory reforms and EU application in CEE. We use a Cox survival model with time-varying co-variates. This estimation technique allows us to control for changes in the economic and constitutional environment of policy-making that occurs as these countries move from central planning to market economies. Importantly, continuous-time models apply partial likelihood estimation and yield the flexibility that one can assume time dependency without being forced to specify the functional form (Yamaguchi 1991: 101). The sample consists of nineteen CEECs for which reliable data are available.13 The maximum time period spans the years 1991 to 1998. We consider 1991 the first year in which application is at risk, simply because most transition countries lacked a stable political authority before that date. In addition, we selected an even shorter observed period of time for countries such as Czechoslovakia (Czech Republic and Slovakia) experiencing further political instability. Application is coded 1 in the year the country applies for EU membership, and 0 otherwise. The variables of principal interest are proxies for the existence of democratic institutions, the time since the end of the transition crisis, and the severity of the transition crisis. The most prominent source for democracy is the polity dataset. The polity dataset includes three composite indicators, DEMOC, AUTOC and POLITY. While DEMOC and AUTOC can take values on an additive 11 point scale (0 to 10), POLITY is computed by subtracting the AUTOC score from the DEMOC score. This unified score ranges from –10 (strong autocracy) to +10 (strong democracy). We use the POLITY score as a first proxy of the political decision-making institutions and the political incentives. However, since the weights used to calculate DEMOC and AUTOC appear to be arbitrarily chosen, we also employ a principal component analysis to compute a composite measure for democracy (REGIME). This proxy is based on the original Polity IV indicators ‘Regulation of Executive Recruitment’ (XRREG), ‘Competitiveness of Executive Recruitment’ (XRCOMP), ‘Executive Constraints’ (XCONST), and ‘Competitiveness of Participation’ (PARCOMP). This procedure suggests that democracy is unidimensional, with the first principal component already capturing more than 78 per cent of the original Polity variables. The correlation (Kendall’s Tau) between POLITY and REGIME is 0.86. Nevertheless, the following differences between the two variables are worth noting: POLITY gives Latvia and Poland the same score and considers both countries more democratic than Russia; REGIME, however, ranks Poland first, followed by Russia and Latvia. The relatively high score for Russia in REGIME results from the lesser importance of ‘Executive Constraints’ in the principal component analysis. POLITY, however, is biased against presidential systems, which explains the lower democracy score of Russia. If the results for POLITY and REGIME differ, we can make some bold but conceptually grounded speculations about the impact of a presidential system on

68 Walter Mattli and Thomas Plümper the likelihood of EU application. We test this by adding a categorical variable measuring the power of the president relative to that of the parliament (PRESID). To control for the lengthy period of ‘institution-building’ regulatory reforms in the wake of the transition crisis, we include variable PASTCRIS.14 In addition, we control for a number of intervening factors. We include per capita income (GDPC) without formulating an expectation about the expected effect. On the one hand, one might expect a positive impact (a hazard rate above 1), since richer societies may find it less burdensome to implement the reforms required for an application; on the other hand, poorer countries may find it relatively more attractive to join the EU. We also control for the export dependence of transition countries (XOPEN) and expect that more trade-dependent countries are more likely to apply. Table 3.2 gives an overview of the countries in our sample, the final year of the transition crisis, the severity of the crisis, and the country’s POLITY score. In addition, we include the month and the year of the formal application for EU membership and our predicted year of application. Despite its simplicity, our account makes only one clearly wrong prediction. It was thought that Macedonia would apply in 1996. The fact that it failed to do so may be the result of its close ties to the former Yugoslavia or may have to do with its conflict with Greece about the country’s name. Table 3.3 reports the results of six models: model 1 is the baseline model, while the others are variations to assess the robustness of our key findings. Model 2 adds a EURO variable to examine whether being labelled a ‘European’ country Table 3.2 A summary Country

Last year of transition crisis

Decline in per capita income (%)

POLITY score

Predicted year of application

Date of application

AZE BUL CRO CZR EST HUN KAZ LAT LIT MAC MOL POL ROM RUS SLA SLV UKR UZB YUG

95 93 93 92 93 92 95 93 94 93 – 91 92 – 93 92 97 95 93

67 17 35 35 15 32 43 42 37 12 51 33 35 30 35 33 47 25 45

–6 38 –3 10 36 10 –4 38 10 36 37 38 35 34 37 10 37 –9 –7

– 95/6 – 94/5 95/6 94/5 – 95/6 96/7 95/6 – 93/4 94/5 – 95/6 94/5 – – –

– 12.95 – 01.96 11.95 03.94 – 12.95 12.95 – – 04.94 06.95 – 06.95 06.96 – – –

The demand-side politics of EU enlargement 69 Table 3.3 Determinants of EU application: results from a Cox survival regression with time-varying co-variates Model 1 BASELINE

Model 2 EURO

Model 3 –3 countries

Model 4 POLITY

Model 5

Model 6

Democracy REGIME

5.117 (1.633) [4.002]**

4.751 (1.558) [3.471]*

4.830 (1.575) [3.552]*

POLITY

1.580 (0.457) [2.241]

1.587 (0.462) [3.028]* 2.083 (0.734) [0.981]

5.698 (1.740) [4.715]**

6.255 (1.833) [5.691]**

22.916 (3.132) [4.834]**

PRESID

Time since transition crisis PASTCRIS

7.035 (1.952) [6.952]***

6.601 (1.887) [6.115]**

6.766 (1.912) [6.500]**

Country specifica GDPC

0.999 (–0.001) [4.203]**

EURO

XOPEN

1.048 (0.047) [3.377]*

0.999 (–0.001) [3.746]* 0.000 (–9.077) [0.001] 1.046 (0.045) [3.059]*

0.999 (–0.001) [3.930]**

0.999 (–0.001) [2.925]*

0.999 (–0.001) [5.691]**

1.000 (0.000) [2.952]*

1.047 (0.046) [3.230]*

1.034 (0.033) [1.917]

1.045 (0.044) [2.481]

1.102 (0.097) [4.451]** 0.973 (–0.027) [0.735] 0.618 (–0.482) [0.874] 0.903 (–0.027) [0.696] 0.797 (–0.227) [1.153]

[53.560] 34.594 18.966** 105

[48.820] 34.636 14.184*** 81

[53.560] 34.871 18.690*** 105

[53.560] 33.881 19.680*** 105

[50.535] 27.677 22.858*** 77

DCPI

BBALa

UNEM

G

Initial –2 LL [53.560] –2 LL 34.757 Chi² 18.803*** N 105

Notes The table reports the exp^betas, beta coefficients in round brackets, and the results of a Wald-test in square brackets. * significant on the 10 per cent level, ** significant on the 5 per cent level, *** significant on the 1 per cent level.

70 Walter Mattli and Thomas Plümper increases the likelihood of application.15 Model 3 is identical to model 1 except that we drop Azerbaijan, Kazakhstan, and Uzbekistan. Model 4 replaces the REGIME variable by the more widely used POLITY variable. Finally, we compare our model with a ‘state of the economy’ model (model 6) that includes all variables that we found significant excluding REGIME, and adds consumer price inflation (DCPI), budget deficit (BBAL), government spending (G), and reported unemployment. We speculate that increases in these new variables reduce the likelihood of EU application. The key results of our baseline Cox regression model are that democratic institutions (REGIME) and time since crisis recovery (PASTCRIS) increase the likelihood of a country’s EU application.16 Per capita income (GDPC) ceteris paribus reduces the odds of an EU application.17 Neither including the EURO variable (model 2) nor dropping the three countries from the sample (model 3) changes our key results. We interpret this as meaning that, even if Azerbaijan, Kazakhstan and Uzbekistan were geographically located much further westwards, they would not have applied. The results of model 4 show that a change in the operationalization of democracy (replacing the widely used POLITY data by REGIME) changes neither the results of the control variables nor the sign of the democracy variable. However, compared to REGIME, POLITY is statistically insignificant. We interpret this result as suggesting that presidential systems are less likely to seek EU membership. Model 5 controls for this hypothesis by the inclusion of a dummy variable (PRESIDENT). Surprisingly, presidential systems seem to be more likely to apply for EU membership, though the result is statistically not significant. More interestingly, however, once we control for presidential systems, POLITY becomes significant. There thus is little doubt that democracy increases the likelihood of market-driven policy reforms and also the odds of an EU application. Finally, as expected, model 6 (which substitutes a number of ‘state of the economy’ variables for democracy) has low explanatory power and no indicator turns out significant, though they all have the expected effect. In sum, these results provide strong support for our theory, since they highlight the importance of democratic institutions. In addition, the period following the transition crisis (PASTCR) seems to be of greater explanatory importance than the severity of the crisis itself. The duration of the transition crisis in less democratic regimes tends to be twice as long and its effects more severe than is the case in true democracies. True democracy therefore has a threefold positive impact on the likelihood of application: it tends to improve the economic stability of transition countries, it increases the willingness of governments to implement ‘institutionbuilding’ regulatory reforms, and it accelerates the speed of the transition process.18

Conclusion Most students of EU enlargement seem to believe that, given the enormous welfare gains of EU membership, all CEECs naturally desire to become full members. This belief is based on the erroneous assumption that governments are concerned

The demand-side politics of EU enlargement 71 solely with maximizing aggregate welfare. This is not necessarily so. We have argued in this study that, in order to understand why some CEECs have been eager to apply for EU membership while others have shown no such interest, we need a theory that clearly and fully specifies the incentives and constraints of political leaders in different types of regimes. We have shown that in the wake of the economic transition crises of the early 1990s, leaders in more democratic countries had a strong incentive to implement politically costly and protracted ‘institution-building’ reforms that constituted a natural stepping stone towards EU application. Leaders in less democratic regimes, who were not overly concerned with the general well-being of the population, felt less pressure to contemplate deep reforms. Their survival depended largely on the support of a few powerful interest groups that derived great economic and social benefits from the politicoinstitutional status quo. EU membership was decidedly unappealing to these leaders. More generally, the aim of this study has been to complement extant supply-side theories of enlargement, which have examined the EU’s motivation for accepting new members, with a demand-side theory of the political economy of enlargement. We thus hope to contribute to the building of a more comprehensive analytical picture of a historically highly significant process and to offer a coherent theoretical framework to guide future comparative research and case studies on enlargement.

Notes 1 See Baun (2000), especially pp. 32, 46, 53–4 and 61. 2 Quoted in Lionel Barber, ‘Brussels Keeps Shut the Gates to the East’, Financial Times (16 November 1995), 17. 3 The ‘push’ factor of migration, namely marked differences in the marginal productivities of labour and capital from one economy to another, will disappear (according to the factor–price equalization theorem) even in the absence of capital flows when free trade is allowed (Stolper and Samuelson 1941; Samuelson 1948). Perfect factor–price equalization, however, is not a necessary condition for migration to cease, for migration is costly. It involves separation from family and friends, acclimatization to a new cultural and linguistic environment, and sometimes even payment to smugglers. Rational expectations about improved domestic opportunities may thus suffice to dampen emigration pressures. 4 Baudoin Bollaert, ‘L’Occident face à la misère de l’autre Europe’, Le Figaro (22 November 1990), 4. See also Norbert Kostede, ‘Igor Ante Portas’, Die Zeit (14 December 1990), 13; Kuno Kruse and Brigit Schwarz, ‘Neue Freiheit, neue Grenzen’, Die Zeit, Dossier (15 February 1991), 13–15; J. Dempsey, ‘Seven Million May Leave the Soviet Union’, Financial Times (26 January 1991); ‘Poor Men at the Gate’, The Economist (16 March 1991), 11–12; Manfrass (1992: 389). The crisis proportion of such an influx becomes clear when this predicted number of refugees is compared with past averages. The yearly average net migration into the twelve EC countries was 161,400 for 1980–4 and 533,000 for 1985–9. This latter number is higher than usual due to a rise in asylum applicants and mass migration of ethnic Germans into Germany (Coleman 1992: 449). 5 PHARE is the acronym for ‘Pologne, Hongrie: Activité pour la Restructuration Economique’. TACIS stands for Technical Assistance to the Commonwealth of Independent States. For more details, see, e.g., Kramer (1993: 221–6).

72 Walter Mattli and Thomas Plümper 6 For details on the Europe Agreements, see, e.g., Kramer (1993: 229–30). After the dissolution of Czechoslovakia, separate negotiations were conducted between the EU and the Czech and Slovak Republics. 7 Countries with more mature economies and stable polities are less likely to be a burden on the EU budget than poorer countries with fledgling political institutions. 8 Some observers question the partnership aspect of the relationship between the Community and the applicant states. Fritz Scharpf, for example, recently wrote: My concern . . . is with the Commission’s role in imposing the acquis on new Member States that had no voice in its definition and whose economic and social conditions differ fundamentally from those of the Member States from whose selfinterested bargains these rules had emerged. If they are enforced with all legalistic determination of which the Commission and Court are capable, the fragile economies of new Member States will be destroyed just as the East German economy was destroyed when the acquis of the West German legal order was imposed and enforced without modification. (Scharpf 2001)

9 10 11

12

Friction and accidents are bound to occur in the process of adoption of the acquis, but we see little general evidence supporting the view that this process has hurt the applicants more than it has benefited them. See also Elster et al. (1998: 188) and Fischer and Sahay (2001). The numbers measure FDI in Bulgaria, the Czech Republic, Hungary, Poland, Romania, Slovakia, Slovenia, Latvia, Lithuania, and Estonia. The underlying game between individuals can therefore be described as prisoners’ dilemma. ‘Truthful strategies’, strategies which are pareto-efficient for the government as well as for all lobby groups, can be derived by maximizing the net welfare of all organized lobby groups and the support function of the government. This procedure suggests an outcome where wealth is redistributed from unorganized to organized parts of the population. The lower the degree of government benevolence, the more redistributive and the less welfare-enhancing is a government’s preferred policy. It is surprising that the ‘benevolence’ of governments, λ, has never been endogenized in the political economic literature. Grossman and Helpman, for example, apply a similar model to trade policy and write: The incumbent government cares about the total level of political contributions and about aggregate well-being. The government values contributions, because they can be used to finance campaign spending and . . . they may provide other direct benefits to the officeholder. Social welfare will be of concern to the incumbent government if voters are more likely to reelect a government that has delivered a high standard of living. (Grossman and Helpman 1994: 838)

13 The economic data are from the Economist Intelligence Unit database and the political information is taken from Polity IV. The event data ‘application to EU membership’ was kindly provided by Frank Schimmelfennig. 14 We postulate this period leading up to application to be two to three years. A related theoretical justifiction for the insertion of such a variable in the context of policy reforms can be found in Alesina and Drazen (1991). 15 We borrow this variable from Schimmelfennig (ch. 8 this volume). 16 In a Cox regression analysis, a variable increases the likelihood that the event at issue happens if the beta-exponent is larger than 1. 17 Since the EU applicants are the relatively rich Eastern European countries, and since

The demand-side politics of EU enlargement 73 democracy and wealth go hand in hand in Eastern Europe, one might be tempted to conclude that the effect is caused by multicolinearity. However, removing POLITY and REGIME from the empirical model does not alter the results in favour of GDPC’s significance (results not reported here). 18 It will be interesting to see how long it takes Yugoslavia to apply for EU membership now that a genuinely democratic regime is in place.

References Alesina, A., and Drazen, A. (1991) ‘Why are Stabilizations Delayed?’, American Economic Review, 81: 1170–88. Baldwin, R., François, J., and Portes, R. (1997) ‘The Costs and Benefits of EU Enlargement: The Impact on the EU and Central Europe’, Economic Policy, 12: 125–76. Baun, M. (2000) The Process and Politics of European Union Enlargement. New York: Rowman & Littlefield. Brancati, D. (2001) The Wisdom of Widening: The Enlargement of the EU to Central and Eastern Europe. Working paper, New York: Columbia University, Department of Political Science. Caves, R. (1996) Multinational Enterprise and Economic Analysis. Cambridge: Cambridge University Press. Coleman, D. (1992) ‘Does Europe Need Immigrants? Population and Work Force Projections’, International Migration Review, 26: 413–61. Dunning, J. (1989) Explaining International Production. London: Unwin Hyman. Economist Intelligence Unit (1999) EIU Views Wire, 28 June, http://www.viewswire.com/. Elster, J., Offe, K., and Preuss, O. (1998) Institutional Design in Post-Communist Societies: Rebuilding the Ship at Sea. Cambridge: Cambridge University Press. European Round Table of Industrialists (1999) ‘The East–West Win–Win Business Experience’, 12 December, http://www.ert.be/. Eurostat, Balance of Payments, Monthly Statistics, various issues. Fischer, S., and Sahay, R. (2001) ‘The Transition Economies After Ten Years’, working paper 7664 (http://www/nber.org/papers/w7664). Cambridge: National Bureau of Economic Research. Gower, J. (1993) ‘EC Relations with Central and Eastern Europe’, in J. Lodge (ed.), The European Community and the Challenge of the Future. 2nd edn, New York: St Martin’s Press, 289–90. Grossman, G. M., and Helpman, E. (1994) ‘Protection for Sale’, American Economic Review, 84: 833–50. Hiemenz, U., and Schatz, K. W. (1979) Trade in Place of Migration. Geneva: International Labour Office. Hollifield, J. (1992a) ‘Migration and International Relations: Cooperation and Control in the European Community’, International Migration Review, 26: 568–95. Hollifield, J. (1992b) Immigration, Markets and States: The Political Economy of Postwar Europe. Cambridge, MA: Harvard University Press. Kramer, H. (1993) ‘The European Community’s Response to the New Eastern Europe’, Journal of Common Market Studies, 31: 213–44. Lankes, H.-P., and Venables, A. (1996) ‘Foreign Investment in Economic Transition: The Changing Pattern of Investments’, Economics of Transition, 4: 331–47. Manfrass, K. (1992) ‘Europe: South–North or East–West Migration?’, International Migration Review, 26(2): 389.

74 Walter Mattli and Thomas Plümper Mattli, W. (1999) The Logic of Regional Integration: Europe and Beyond. Cambridge: Cambridge University Press. Mortimer, E. (1992) European Security after the Cold War, Adelphi paper no. 271. London: International Institute for Strategic Studies. Olson, M. (1965) The Logic of Collective Action: Public Goods and the Theory of Groups. Cambridge, MA: Harvard University Press. Plümper, T., and Martin, C. W. (2001) ‘Political Participation, Government Spending, and Economic Growth’. Paper presented at the American Political Science Association annual conference in San Francisco, http://pro.harvard.edu/. Rodrik, D. (1995) ‘Political Economy of Trade Policy’, in G. Grossman and K. Rogoff (eds), Handbook of International Economics. Amsterdam: Elsevier, 1457–94. Samuelson, P. (1948) ‘International Trade and the Equalization of Factor Prices’, Economic Journal, 58: 163–84. Scharpf, F. (2001) European Governance: Common Concerns Versus the Challenge of Diversity. Working paper, New York: New York Law School. Shevtsova, L. (1992) ‘Post-Soviet Emigration Today and Tomorrow’, International Migration Review, 26: 241–57. Stolper, W., and Samuelson, P. (1941) ‘Protection and Real Wages’, Review of Economic Studies, 9: 58–73. United Nations (1998) World Investment Report 1998: Trends and Determinants. New York: United Nations. Wintrobe, R. (1998) The Political Economy of Dictatorship. Cambridge: Cambridge University Press. Yamaguchi, K. (1991) Event History Analysis. Newbury Park, CA: Sage. Yarbrough, B., and Yarbrough, R. (1992) Cooperation and Governance in International Trade. Princeton, NJ: Princeton University Press.

4

The struggle over EU enlargement A historical materialist analysis of European integration Andreas Bieler

Introduction After successfully deepening European integration from the mid-1980s onwards around the Internal Market programme, institutionalized in the Single European Act (SEA) in 1987, and Economic and Monetary Union (EMU), part of the Treaty of Maastricht in 1991, the agenda of the European Union (EU) in the 1990s was then dominated by the issue of enlargement. In 1993 and 1994, negotiations were conducted with the four European Free Trade Area (EFTA) countries Austria, Sweden, Finland and Norway, leading to the accession of the first three to the EU on 1 January 1995. Already during these negotiations, it became apparent that the Central and Eastern European countries (CEECs), suddenly able to conduct their own foreign policy after the end of the Cold War, also wanted to become EU members. In May 2004, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia and Slovenia, as well as the Mediterranean countries Cyprus and Malta, joined the EU. Currently, the Union is negotiating only with Bulgaria and Romania. Croatia and Turkey are waiting to open accession negotiations . The goal of this chapter is to analyse the underlying rationale of this continuing enlargement process. Austria and Sweden are chosen here of the EFTA enlargement round for a most-similar comparative study. In contrast to the North Atlantic Treaty Organization (NATO) member Norway, they are both neutral countries. In contrast to Finland, their neutrality was not tied to a special relationship with the Soviet Union during the Cold War. Historically, membership had been rejected in both countries, firstly, for being incompatible with their neutral status and, secondly, because governments led by social democrats feared that the EU, dominated by big capital and Christian democratic parties, would undermine their achievements of full employment and social equality. Hence, it is a paradox that Austria and Sweden joined the EU at a moment when it had moved towards positions that contributed to these dangers even further. The Internal Market focused on the deregulation and liberalization of national economies leading towards the free flow of goods, capital, services and people. Employment is assumed to be the result of tougher competition, not of state intervention. EMU further intensified the neo-liberal economic direction by entrusting an independent European Central Bank with a monetary policy focusing on low inflation and

76 Andreas Bieler price stability and committing states to a restrictive fiscal policy by obliging them to remain within the neo-liberal convergence criteria. In short, the revival of European integration revolved around neo-liberalism and therefore endangered even more the Austrian and Swedish economic-political model. Moreover, the Treaty of Maastricht established the Common Foreign and Security Policy, including the possibility of a common defence policy, which clearly threatens Austria’s and Sweden’s neutral status (Bieler 2000: 1–2). In the case of eastern enlargement, it must similarly be asked, what was the underlying rationale of these countries’ application to a EU dominated by neoliberalism? Nevertheless, the additional puzzle here is the question of what was the social purpose driving the EU’s readiness for further enlargement despite the relative economic backwardness of the applicants? Unlike the EFTA countries, which are net contributors to the budget, the CEEC applicants were less developed countries in need of significant financial assistance (Holman 2001: 182). It is argued that EU enlargement has to be studied against the background of globalization. At the material level globalization is defined as consisting of the transnationalization of production, expressed in the increasing importance in size and number of transnational corporations (TNCs), and the transnationalization of finance, which has led to the emergence of a global financial market as a result of the successive deregulation of national financial markets and the increasing importance of off-shore markets since the early 1970s. At the ideological level, a shift from a Keynesian to a neo-liberal economic policy rationale can be identified, involving the abandonment of a full employment policy in favour of price stability and low inflation levels (Cox 1993: 259–60, 266–7). European integration has been part and parcel of this process of transnational restructuring. The free movement of capital was institutionalized by the Internal Market programme and the programme itself led to a wave of mergers within the EU, increasing drastically the significance of European TNCs (Laffan 1992: 89; Marginson and Sisson 1994: 18– 23). At the ideological level, neo-liberal economics was the underlying driving force of the revival of European integration. Established approaches of European integration are problematic on two accounts in respect of analysing EU enlargement against the background of globalization. Firstly, neo-functionalist and intergovernmentalist approaches alike are unable to account for structural change, because they take existing social and power structures as given. Neo-functionalist analyses incorrectly assume an automaticity of integration through the concept of spillover, based on an objective economic rationale, and neglect the wider world within which integration takes place. Intergovernmentalist approaches, including the most developed liberal intergovernmentalist variant, consider states to be the most important actors at the international level and, consequently, overlook the importance of supranational institutions, transnational actors and the independent role of ideas. Moreover, they incorrectly concentrate on interstate negotiations as the most important instances of integration. Secondly, established approaches concentrate on the institutional development of the EU, i.e., the form of the EU, but not the content. The social purpose underlying European integration is overlooked (van Apeldoorn

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2001: 71; for a criticism of established integration theories, see Bieler and Morton 2001b). In contrast to established European integration theories, this chapter is based on the assumption that European politics/integration is an open-ended process, the outcome of which is the result of class struggle. The dominance of neoliberalism, referred to above, is not set in stone. Class struggle continues around the question of the exact shape of the future economic-political model of the EU. The terms and conditions of both the 1995 EFTA enlargement and the 2004 eastern enlargements are part and parcel of this struggle. After an initial consideration of rationalist political economy approaches, which attempt to incorporate recent developments within the international political economy in their analysis, the next section will develop a historical materialist approach of European integration based on neo-Gramscian perspectives. The third section looks then in more detail at the underlying rationale of Austria’s and Sweden’s accession to the EU. The fourth section turns to eastern enlargement and examines the social purpose of integrating the CEECs in the EU. The conclusion summarizes the results of the article and assesses whether and to what extent these enlargement rounds have supported neo-liberalism within the EU.

Aspects of a historical materialist analysis of European integration Political economy approaches In response to the failure of established integration theories, several rationalist political economy approaches have also emerged specifically in relation to EU enlargement. For example, Fioretos (1997) rejects the intergovernmentalist assumption that governments had supported further integration since the mid1980s in order to strengthen their position vis-à-vis domestic interest groups. Focusing on the domestic balance of power between governments and business and considering that increasing levels of international economic interdependence resulted in new domestic coalitions dominated by export-oriented companies, he argues that revived European integration was the result of a politics from below, in which economic interest groups constrained and pushed governments towards further integration (Fioretos 1997: 295–7). In relation to Swedish accession to the EU, he concludes that EU membership ‘was not designed to increase the government’s domestic autonomy, but rather was a policy directed at satisfying the demands of Swedish companies’ (ibid.: 311). The importance of Swedish TNCs for the domestic economy made it simply impossible for the government not to follow the TNCs’ wish to join the EU. Ingebritsen (1998: 26–47) similarly concentrates on the importance of leading industrial sectors, i.e., those sectors which contribute the most to national welfare, in her explanation of why some Nordic states such as Sweden decided in favour of membership, while others such as Norway remained outside the EU. Norway’s economy relies very much on petroleum. However, since the determination of the oil price is international and therefore not affected by EU membership, little pressure to join the EU emanated

78 Andreas Bieler from this sector. At the same time, the state-supported agricultural and fisheries sectors openly opposed membership and its liberalizing implications. On the other hand, in order to guarantee access to its export markets, Swedish TNCs in the leading manufacturing sector had started in the second half of the 1980s to transfer production units to the EU as part of a political strategy for closer integration, resulting in accession to the EU. In sum, ‘the political influence of leading sectors defined the capacity of governments in each state to pursue political integration’ (ibid.: 152). There are, however, three main problems with these attempts to incorporate global structural change in the analysis of EU enlargement. Firstly, despite acknowledging the increasing levels of TNCs’ structural power resulting from the possibility of moving production units from one country to another, rationalist political economy approaches still treat TNCs as domestic actors. Nevertheless, globalization as a new phenomenon is characterized first and foremost by the transnationalization of production, not merely by increasing levels of economic interdependence. TNCs are transnational actors, not domestic actors, and therefore clearly differ from export-oriented companies, the production facilities of which are still located at the national level. The analysis below of Austria’s and Sweden’s accession to the EU will demonstrate the significant difference in the two countries’ road to membership resulting from the transnational Swedish production structure and the export-oriented Austrian production structure. Secondly, both Fioretos and Ingebritsen neglect the continuing importance of labour in the process of further integration. Labour is regarded either as being constrained in a similar fashion to governments by the changes in the international economy (Fioretos 1997: 302) or as a monolithic domestic actor, which became part of the pro-EU alliance in Sweden in view of the structural power of manufacturing (Ingebritsen 1998: 147–9). As will be shown below, this overlooks the rift in Sweden between transnational sector unions and national sector unions over membership. Moreover, the importance of transnational labour in the successful pro-EU referendum campaign is not acknowledged. Finally, phrasing their analysis in terms of governments being constrained by business, rationalist political economy approaches fall into the trap of taking the separation of states and markets, historically specific of the capitalist mode of production, as their ahistoric starting-point of analysis. As a result, the inner connection between the political and the economic cannot be problematized by these approaches. ‘Instead the “state” is fetishised whilst “the market” is dehistoricised and viewed as a technical arena in which the “external” state “intervenes”’ (Burnham 1995: 136). Neo-Gramscian perspectives A set of different, yet related (see Morton 2001) historical materialist approaches to European integration emerged recently from neo-Gramscian perspectives (e.g., van Apeldoorn 2002; Bieler 2000; Bieler and Morton 2001a; Bieling and Steinhilber 2000).1 Drawing on the work of the Italian communist Antonio Gramsci (1971) as interpreted by Robert Cox (1981, 1983), these perspectives

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conceptualize the historical specificity of capitalism by taking the sphere of production as the starting-point of their analysis. The social relations of production are considered to engender social forces as the most important actors. Importantly, production is to be understood in a wide sense, including the production and reproduction of knowledge, institutions and the social relations involved in the production of physical goods (Cox 1987: 1, 1989: 39). The relations that organize material production are, thus, considered to be crucial for the wider institutional reproduction of social orders on both a national and an international level, which allows us to perceive entities such as ‘state’ and ‘market’ as different forms of the very same capitalist social relations of production. Moreover, a neo-Gramscian analysis is open-ended through an emphasis on class struggle. It ‘rejects the notion of objective laws of history and focuses upon class struggle [be it intra-class or inter-class] as the heuristic model for the understanding of structural change’ (Cox with Sinclair 1996: 57–8). The essence of class struggle is exploitation and resistance to it, and this confrontation of opposed social forces in concrete historical situations implies the potential for alternative forms of development. Class can be identified by relating social forces to their place in the production process. This makes structural changes such as globalization accessible. The capitalist mode of production is organized around wage labour and private property. This leads to the opposition between the bourgeoisie, the owners of the means of production, on the one hand, and workers, who can only sell their labour power, on the other. The partial transnationalization of national production systems due to globalization, however, implies that there is class struggle not only between capital and labour at the national level, but also between national capital and labour and transnational forces of capital and labour. The former can further be subdivided in nationally oriented social forces, engendered by production processes organized at the national level producing predominantly for domestic consumption, and internationally oriented social forces, stemming from national production, which is geared towards export markets. Hence, in contrast to the rationalist political economy approaches, the partial transnationalization of national production systems is conceptualized. Globalization has not only strengthened social forces of export-oriented sectors. It has also engendered new, transnational social forces. Importantly, while the position within the sphere of production shapes the behaviour of social forces, it does not determine it. How social forces operate in a particular situation has to be established in an empirical investigation. Moreover, class membership does not automatically imply class consciousness and common class identity and interests (Ste Croix 1981: 44). Rather, class consciousness is the result of class struggle around exploitation and resistance to it in a particular historical context. It is not determined by a particular location in the production process (Thompson 1978). This focus on exploitation and resistance allows us further to extend the notion of class struggle beyond the immediate sphere of production and the workplace. As van der Pijl has argued, neo-liberal capitalism is characterized by the fact that capitalist discipline has now also been extended to the entire process of social reproduction, involving the exploitation of the social and natural substratum. In response to the commodification of social

80 Andreas Bieler services and the intensified destruction of the biosphere as well as the disruption of traditional life, a whole range of new, progressive green but also nationalist rightwing social movements have emerged to defend the environment and personality (van der Pijl 1998: 46–8). This has to be analysed as class struggle as much as exploitation and resistance to it in the workplace. The resistance in Austria by the Green Party and the right-wing Freedom Party is a good example for both forms of this type of class struggle against neo-liberal restructuring (see below). The focus on social forces and the sphere of production, however, does not imply that the state is overlooked. Neo-Gramscian perspectives distinguish several forms of states, which are defined in terms of the apparatus of administration and of the historical bloc or class configuration that defines the raison d’état for that form (Cox 1989: 41). Importantly, for Gramsci the form of state consists of ‘political society’, i.e., the coercive apparatus of the state more narrowly understood, including ministries and other state institutions, and ‘civil society’, made up of political parties, unions, employers’ associations, churches, etc. (Gramsci 1971: 257–63, 271). In sum, the form of state is regarded as a structure within which and through which social forces operate. The neo-Gramscian concepts of historical bloc and hegemony are crucial for the understanding of class struggle. Various social forces may attempt to form a historical bloc to establish preferable forms of governance at the national and/or international level. It is, however, more than simply a political alliance between social forces represented by classes or class fractions. It indicates the integration of a variety of different class interests that are propagated throughout society, ‘bringing about not only a unison of economic and political aims, but also intellectual and moral unity . . . on a “universal” plane’ (Gramsci 1971: 181–2). It forms a complex, politically contestable and dynamic ensemble of social relations which includes economic, political and cultural aspects. Hegemony describes a type of rule, which relies predominantly on consent, not on coercion. It ‘is based on a coherent conjunction or fit between a configuration of material power, the prevalent collective image of world order . . . and a set of institutions which administer the order with a certain semblance of universality’ (Cox 1981: 139). A fundamental class exercises a hegemonic function when it transcends particular economic-corporate interests and is capable of binding and cohering diverse aspirations, interests and identities into a historical bloc. ‘Organic intellectuals’, the representatives of a class or class fraction, play a crucial role in achieving hegemony. They do not simply produce ideas, but it is their task to organize the social forces from which they stem and to develop a ‘hegemonic project’ which is able to transcend the particular interests of this group so that other social forces are able to give their consent. Such a hegemonic project must be based on ‘organic’ ideas, which arise from the economic sphere. It must, however, also go beyond economics into the political and social sphere, incorporating ideas related to issues such as social reform, moral regeneration and national security, to result in a stable hegemonic political system. It ‘brings the interests of the leading class into harmony with those of subordinate classes and incorporates these other interests

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into an ideology expressed in universal terms’ (Cox 1983: 168). In other words, neo-Gramscian perspectives avoid economic reductionism through a focus on political aspects as part of a hegemonic project. It is especially in times of crisis resulting from contradictions in the production process that hegemonic projects may result in the formation of a historical bloc and obtain a hegemonic position at the form of state and/or world-order level leading towards structural change. In the next section, a neo-Gramscian perspective is applied to Austria’s and Sweden’s accession to the EU. In relation to enlargement, it is important to note that a neo-Gramscian perspective, rejecting economic determinism, does not argue that globalization caused Austrian and Swedish membership. Rather, the analysis first has to investigate the way production is organized in both countries in order to identify the relevant social forces. Then, it has to be examined which social forces were in favour of membership, who developed which hegemonic project on their behalf, and whether this led towards the formation of a pro-EU historical bloc. A related question is who were the opposing social forces and why did they fail to develop a successful counter-hegemonic project. Finally, as a ‘critical theory’, a neo-Gramscian perspective also focuses on the underlying rationale driving the pro-EU projects in order to establish the social purpose of enlargement.

The 1995 enlargement: Austria’s and Sweden’s accession to the EU From a neo-Gramscian perspective, an analysis starts by identifying social forces as the main actors through an examination of the two countries’ production structure. Austria’s post-war production structure has been characterized predominantly by small-scale industry and the absence of significant TNCs (Breit and Rössl 1992: 191). Importantly, about 50 per cent of Austrian domestic production was completely sheltered against international competition with regulated supply and production quotas (Luif 1994: 26). As a consequence, the main line of division is likely to be between nationally oriented capital and labour and internationally oriented capital and labour. While the former may reject EU membership, since this implies the end of their protection against international competition, the latter most likely support accession to the EU, since this guarantees access to their export markets. Their actual position, of course, has to be asserted in an empirical investigation. Unlike Austria, Sweden’s production structure has always been characterized by TNCs (Andersson et al. 1996: 27–47; Braunerhjelm et al. 1996: 2). The degree of transnationalization, however, increased dramatically in the second half of the 1980s, when there was a drastic upturn in outward FDI. While inward FDI had only risen from US$396 million in 1985 to US$2,328 million in 1990, outward FDI increased from US$1,783 million to US$14,136 million during the same period (Luif 1996: 208). As a result, the main line of division in Sweden is likely to be between national capital and labour on the one hand, and transnational capital and labour on the other.

82 Andreas Bieler Austria: the formation of a pro-EU historical bloc The main actor to start the debate was the Austrian Federation of Industrialists (VÖI). Representing the export sector of the Austrian economy, it was deeply concerned about the possible barriers implied by the EU Internal Market project. After careful consideration, it published a statement on 14 May 1987 and asked the government ‘to do everything possible for Austria to become a full member of the EU as soon as possible’ (VÖI 1987: 42 [author’s translation]). The argument went along neo-liberal economic lines. Only membership would guarantee full participation in the dynamic process of European integration, and the required dismantling of Austria’s sheltered sector would bring about restructuring and increased competitiveness. In short, the neo-liberal restructuring of Austria’s production system was the social purpose behind EU membership. Nevertheless, the VÖI realized that the main obstacle to membership could be Austria’s neutrality. It, consequently, commissioned a study by two experts of international law, which concluded that membership was compatible with neutrality (Hummer and Schweitzer 1987). Two more publications dealing with the economic and constitutional aspects of membership followed soon afterwards (Breuss and Stankovsky 1988; Öhlinger 1988). The goal of these publications was to establish a basis for discussion on membership which had not previously existed (Interview no. 2). In sum, it becomes clear that the officials of the VÖI can be regarded as ‘organic intellectuals’ of internationally oriented capital. Stemming from the same industrial sector, they used the VÖI as an institutional platform in order to formulate for their social group a pro-membership ‘hegemonic project’, which went beyond mere economic issues by including neutrality and constitutional problems. The VÖI’s strategy did not lead directly to membership. Nonetheless, it provided a coherent project around which various fractions of social forces could rally. It was, firstly, supported by internationally oriented capital. In particular the textile industry declared membership a vital issue for its economic survival. Some textile employers even threatened to transfer production units to the EU in case of non-membership (Interview no. 4). They gained the upper hand in the Chamber of Commerce, which demanded membership at its annual general conference on 9 December 1987 (BWK 1987). The trade unions found it more difficult to support accession to the EU. Eventually, labour of the internationally oriented sectors determined the support for application by the Chamber of Labour and the Austrian Federation of Trade Unions. In talks with the employer associations, high-ranking trade union officials had realized that they were unable to suggest an alternative to membership, which would offer the same kind of economic benefits (Interview no. 1). Internationally oriented capital and labour had a similar success in the two main parties, the SPÖ and the Austrian People’s Party (ÖVP), which formed a coalition government from January 1987 onwards. The latter decided in January 1988 to push for membership (ÖVP 1988). It had already adopted a neo-liberal strategy in 1982, when it demanded budgetary cuts, tax reform, flexibility, deregulation and privatization (Meth-Cohn and Müller 1994: 162–3). Membership appeared to be a

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logical step along these lines. Although slightly later than the ÖVP, the SPÖ also accepted neo-liberal ideas against the background of economic recession. In the government’s economic report to parliament in 1985, the chancellor, Fred Sinowatz (SPÖ), indicated a departure from the budget deficit spending of the 1970s, which could only be a short-term measure (Seidel 1993: 146). From early 1988 onwards, the economic wing around the then chancellor, Franz Vranitzky, and the finance minister, Lacina, was convinced that membership was necessary to ensure full participation in the Internal Market, and some even followed the argument that this would bring about the urgent restructuring of the sheltered sector (Interview no. 6). Once a report by the international law office in the Foreign Ministry in November 1988 had declared that membership and neutrality were compatible (Völkerrechtsbüro 1988), the road was clear for a pro-EU course on the part of the SPÖ. What is clear from both internal party struggles is that international forces of capital and labour successfully rallied the parties around a strategy towards membership, which was based on the neo-liberal rationale of opening up the sheltered sectors to international competition in order to overcome economic recession. Both labour and capital related to the sheltered production sectors opposed membership. This included mainly the food processing industry, customs’ officials, transport companies and the agricultural sector. Some of the employers and employees in these sectors worked together in individual instances and tried to influence their respective chamber. They raised their voices of opposition whenever they could, but were eventually outnumbered (Interview no. 3). It was in 1988 that publications first appeared criticizing the argument that membership was a natural necessity and outlining alternative strategies. Althaler et al. (1988: 44–5), for example, pointed to a range of different options, such as a further development of the 1972 free-trade agreements between Austria and the EU or association with the EU instead of membership, which would promise similar economic gains. Such criticism was supported by the Austrian Green Party (GA), which vehemently opposed membership. The Internal Market programme was accused of merely aiming at economic-industrial expansion at the expense of high environmental and social standards. Additionally, the GA criticized the EU’s democratic deficit and perceived military component (GA 1989). Overall, however, neither the criticism of the neo-liberal economics of EU membership nor the alternatives to accession were accepted by a wider audience. They seemed to lack ‘common sense’ in an ideological environment, in which neo-liberalism had become part of the overall structure. Conversely, the neo-liberal rationale of the pro-EU project fitted with the overall structure and could easily be sold as a ‘common sense’ solution to domestic economic problems.2 Finally, the Austrian Freedom Party (FPÖ), under Jörg Haider, had surprisingly changed course and started opposing membership from 1992 onwards. Most importantly, the surrender of national sovereignty and the idea of a multicultural European society were rejected (FPÖ 1993: 2–3). Nevertheless, while the turn of the FPÖ strengthened the ‘no’ side quantitatively, in practice it undermined the opposition. Progressive forces such as the GA constantly had to distance

84 Andreas Bieler themselves from the extreme-right, xenophobic rhetoric of the FPÖ instead of concentrating on the campaign itself (Interview no. 5). In the end, the ‘yes’ group won in the referendum on EU membership on 12 June 1994 with a clear majority of 66.6 per cent to 33.4 per cent. Sweden: the structural power of transnational capital It was the Swedish Social Democratic Party’s (SAP) original decision that membership was incompatible with neutrality that prevented any debate on membership between 1987 and 1990 (Bieler 2000: 75–7). Although capital did not pursue a political strategy towards membership, it did not remain inactive either. Swedish TNCs realized that they must be part of the Internal Market on account of possible trade discrimination. As outlined above, there had been a drastic increase in outward FDI between 1985 and 1990. This increase went predominantly to the EU. ‘Whereas in 1985, only 21.4 percent of all Swedish direct investments abroad went to the [EU] countries, in 1989 the share was 50.1 percent and in 1990 it even attained 70.4 percent’ (Luif 1996: 209). While there were other factors for the increased Swedish FDI in the EU, there is a strong indication that ‘a major cause for this shift was uncertainty about a future Swedish Union membership and a fear of Fortress Europe’ (Braunerhjelm and Oxelheim 1996: 114). The transfer of production units had a significant impact on the SAP government. The exact timing of the announcement in parliament on 26 October 1996 was due to renewed pressure on the Swedish krona and the rumours about an imminent currency devaluation in mid-October (Interview no. 12). The longerterm reasons for application were, however, the ongoing capital flight of Swedish TNCs to the EU, rising unemployment and the government’s concomitant loss of economic credibility (Interview no. 8). The idea of application emerged as a joint effort of the Ministry of Finance and the Prime Minister’s Office, both closely linked to the global economy, and was regarded as a way of regaining economic credibility, stability and budgetary discipline (Interview no. 14). Hence, application cannot be explained solely by referring to the structural power of Swedish manufacturing to which the government was forced to succumb, as is attempted by rationalist political economy approaches. Rather, the push for membership by the Finance Ministry and Prime Minister’s Office signifies that neo-liberal restructuring had become to some extent internalized within the Swedish form of state in view of domestic economic recession. Nevertheless, the SAP as a party was not united on the question of EU membership. While transnational social forces supported the government’s position, national social forces continued to regard the EU as a threat to social democratic achievements and aligned themselves with national labour (see below) in the ‘no’ camp during the referendum campaign. Trade unions had generally been surprised by the SAP decision. After the announcement in parliament, a union internal discussion started. Against the background of globalization, the peak organizations the Swedish Trade Union Confederation (LO), the blue-collar workers’ union, and the Swedish Confederation of Professional Employees, the white-collar workers’ union, supported the

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quest for membership. They argued that, because of globalization, Sweden had to deregulate its economy in any case. Cooperation at the European level offered a way to regain some control over capital lost at the national level (Interview no. 7; Interview no. 10). Within the unions, however, there was a split between transnational industrial unions and unions in export-oriented sectors in favour of membership on the one hand, and national unions opposing it on the other. In particular the transnational sector Paper Workers’ Union and the Metal Workers’ Union, affiliates of the LO, supported EU membership. Considering that the Swedish TNCs had already established themselves in the Internal Market, they argued that it was economically impossible to remain outside the EU (Interview no. 13). On the other hand, national sector unions such as the Municipal Workers’ Union and the Commercial Workers’ Union, also LO-affiliates, spoke out against membership. The jobs, in particular in the public sector, did not depend on exports or transnational production and the pressures of globalization hardly played a role. Rather, it was feared that future decisions taken by a neo-liberal EU would undermine the Swedish system with its generous welfare provisions and policy of full employment (Interview no. 11). The referendum result on 13 November 1994 was very close: 52.7 per cent voted ‘yes’ versus 47.3 per cent ‘no’ (Luif 1996: 214). The main problem of the ‘no’ forces was the lack of a hegemonic project which went beyond the rejection of membership and provided a clear economic and political alternative (Bieler 2000: 118–20). Historical bloc versus strong alliance of social forces In sum, in Austria, a historical bloc in favour of membership was firmly established by June 1989. The ‘hegemonic project’, devised by ‘organic intellectuals’ of internationally oriented capital located in the VÖI, was based on economic neoliberalism and the idea that neutrality was compatible with membership. It provided the basis for an alliance of internationally oriented capital and labour, which gained control of the two governing parties and the corporatist interest associations. Similarly, in Sweden, transnational capital demanded EU membership. Nevertheless, unlike in Austria, there was no institution of transnational capital which provided the platform for ‘organic intellectuals’ to form a promembership project. The reason can at least partly be found in the two countries’ different production structure. Swedish TNCs simply did not have to bother with mounting a political challenge to the SAP’s initial anti-membership course. They had the structural option to transfer investment and production units to the EU and, thereby, counter possible threats of exclusion. Austrian internationally oriented capital, on the other hand, did not have this option at its disposal on account of its domestic production structure. A carefully prepared and carried out political strategy was, therefore, the only possible way of achieving participation in the Internal Market. The lack of a pro-EU project points to a further difference. While internationally oriented capital and labour formed a historical bloc in Austria based on a common hegemonic project, transnational Swedish capital and labour had a

86 Andreas Bieler completely different rationale for their support of EU membership. Transnational labour formed its own pro-EU campaign group including the pro-EU wing of the SAP and transnational unions. This was done partly in order to attract workers, something the pro-EU group of transnational capital was unable to do. The different group structure was, however, also due to a different economic rationale. While transnational capital regarded membership as a safeguard against future Swedish experiments different from the neo-liberal course of other countries (Interview no. 9), transnational labour regarded it as a way of regaining control over capital lost at the national level. In short, EU membership was in both countries regarded as a way of securing the implementation of a neo-liberal economicpolitical model which allowed the continuation of capitalist accumulation after the post-war Keynesian arrangements had run out of steam at the national level. This was supported by a historical bloc of internationally oriented capital and labour in Austria. The different rationale behind Swedish transnational labour’s support for membership indicates, however, that there was only a strong alliance in favour of EU membership, not a historical bloc. The struggle over the future Swedish form of state has not been solved but postponed and transferred to the European level. By overlooking the new transnational production dimension as a part of globalization, the rationalist political economy approaches cannot identify these differences between Austria’s and Sweden’s road to EU membership. Austria’s and Sweden’s membership is frequently explained as a result of the change in Soviet foreign policy under Gorbachev and the end of the Cold War in 1989 rather than as a consequence of economic factors. However, a detailed analysis shows that, while the end of the Cold War facilitated the redefinition of neutrality to make it compatible with membership and, thereby, incorporate it into a hegemonic project, as in Austria, it did not push the two countries towards the EU (Bieler 2000: 122–37). A hegemonic project cannot consist solely of an economic rationale. Pro-EU social forces in both countries knew very well that it also needed to include a security component taking into account both countries’ neutral status in order to have a chance with the population in the referendums on membership. In the end, the people in both countries accepted that the continuation of neutrality was guaranteed and security policy did not become a prominent aspect in the referendum campaigns. The next section will turn to eastern enlargements. Only a brief overview can be attempted here. The task is to establish the general social purpose of these countries’ accession to the EU for a comparison with Austria’s and Sweden’s entry.

The restructuring of the CEECs and the question of EU eastern enlargement After the end of the Cold War in 1989–90, the social relations of production in Central and Eastern Europe (CEE) were restructured with the goal of integrating them into the global economy. In what Holman (1998) describes as ‘double transformation’, liberal democracies were established in tandem with the introduction of market economies through the transnational restructuring of CEE economies.

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In the transnationalization of finance, CEE financial markets were incrementally liberalized and deregulated and national banks made available for foreign takeovers.3 Moreover, based on aggressive privatization programmes, national production was opened up to foreign investors and became, thus, transnationalized. The social consequences of restructuring were dramatic. In the case of Poland, the Czech Republic and Hungary, three of the more developed CEECs and front-runners among the CEECs in relation to EU membership, transformation led initially to a drastic economic downturn. In 1991, GDP levels declined in Poland, the Czech Republic and Hungary by 7, 11.5 and 11.9 per cent respectively. While economic growth had recovered by 1998, unemployment rates remained high, at 10.4, 7.5 and 9.1 per cent respectively (Bieler 2000: 140–48). The result has been social hardship for large parts of the population (Pollert 1999: 76–80), which can potentially lead to political instability. The decision on membership in the CEECs was taken by elite cadres within state institutions. Membership was perceived as the historical ‘return to Europe’, thereby fulfilling the psychological need to break with the communist past and to belong once again to Europe. Unsurprisingly, although to a different extent in different countries, at least initially popular support for EU membership has been high in the CEECs (Grabbe and Hughes 1998: 82). Additionally, however, ‘across central and eastern Europe there has been enthusiasm for joining international organizations to facilitate and consolidate re-integration into the world economy and a departure from the Soviet sphere of influence’ (ibid.: 6). NATO was considered to be the most important institution to join for security reasons, while the EU was regarded as the best solution in respect of economic restructuring on account of its geographical proximity and its promises of wealth. Neo-liberal restructuring had created groups of winners and losers in the CEECs, which threatened to undermine both democracy and the market economy. ‘The risk is either that the winners will force adaptations that are unnecessary or detrimental to society as a whole, or that the losers will block adaptations that are necessary and beneficial’ (Cecchini et al. 2001: 157). The CEECs were characterized by relative economic backwardness and the lack of an established civil society with consolidated structures of party systems and interest groups. In Poland, for example, it was not until the 1997 elections that a more solid party system emerged (Król 1999). And even this is questionable, considering that the Solidarity Electoral Action, which won the 1997 elections, not only lost the most recent elections in September 2001, but even failed to re-enter parliament (BBC Monitoring Service, 26 September 2001; http://globalarchive.ft.com/global/, 11/01/2002). CEE forms of state, in short, are still not consolidated enough to accommodate these political risks to democracy and a neo-liberal market economy (Cecchini et al. 2001: 157–9). Transnational economic restructuring could not be based on a firmly established alliance of social forces or historical bloc around a hegemonic project at the national level. Instead, cadre elites within state institutions had to secure their neo-liberal project externally through EU membership. According to Bohle, this strategy can be explained by what Gramsci labelled a ‘passive revolution’ (Bohle 2000: 318). In a ‘passive revolution’, ‘the important thing is to

88 Andreas Bieler analyse more profoundly the significance of … the fact that a state replaces the local social groups in leading a struggle of renewal’ (Gramsci 1971: 105–6; see also Cox 1983: 165–7). Structural change is not the result of domestic economic development. Rather, domestic social relations of production are restructured through the incorporation of international ideas and adoption of foreign production methods by national cadre elites (Bohle 2000: 318–19). In Poland, neoliberal restructuring was initially secured externally through links with the global economy. Shields illustrates well how the post-communist elite in Poland around Balcerowicz, the architect of Poland’s rapid neo-liberal restructuring plan in 1990, was integrated into a network of international academics and worked closely together with the International Monetary Fund, rather than relying on support by national forces (Shields 2001). EU membership can be seen as a further attempt to secure restructuring more firmly at the external level. EU membership and the expected economic benefits deriving from it make it easier to cope with the social hardship resulting from neo-liberal restructuring. This explains the social purpose underlying the CEECs’ applications. What remains is the question of why the EU was prepared even to consider accession of countries as poor as the CEEC applicants. It is for this reason that the analysis turns here to the EU. EU pre-accession strategies not only secured but clearly intensified the neoliberal restructuring of CEE economies. Initially, this was not done in a systematic way. The EU’s PHARE programme, for example, financed foreign consultants, which had the task of advising the CEECs’ governments on economic restructuring in general and privatization in particular (Bohle 2000: 310–11). Moreover, the Europe Agreements firmly redirected CEE trade to the EU. Through alignment of the applicants’ laws with EU norms, in particular in the areas of competition and state aid rules, ‘they can tie the CEE countries into trade liberalization and counter domestic pressure for protection’ (Grabbe and Hughes 1998: 33). It was, however, the promise of membership, made at the 1993 European Council summit in Copenhagen, which systematically pushed CEE countries towards adopting the neo-liberal economic-political model of the EU (Holman 2001: 178). It was stated that potential new members had to achieve a stable democracy, a functioning market economy, the ability to withstand competition within the EU, and to take on the full acquis communautaire, including the aims of political and economic and monetary union (Gower 1999: 7). Thus, the elements of the enlargement strategy of the EU clearly demanded adaptation to EU rules and thus measures of liberalization and deregulation. In June 1995, the Cannes European Council passed the Internal Market White Paper, which extended the alignment process to the free movement of services and capital. It identified the key areas of legislation and the necessary administrative and technical structures for its implementation (Preston 1997: 202–3). Applicant countries were left with the task of drawing up programmes and timetables for implementation of the respective legislation. Adaptation to the EU was further intensified after December 1997, when the Commission was given the task by the European Council to publish regular reports on the progress made by the applicant countries in relation to the fulfilment of the Copenhagen criteria (Holman 2001: 180).

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At the political level, this pre-accession strategy was devised by the Commission with the support of the European Round Table of Industrialists (ERT). The latter consists of the chief executives of European TNCs and represents the interests of transnational capital. While the Commission relies on the structural power of the ERT, which is able to address several national governments at the same time, the ERT needs the Commission and its power to initiate legislative proposals within the EU. The ERT intensified its lobbying from 1997 onwards, urging the EU to reform its institutional structure to facilitate enlargement and to work closely together with the governments of applicant countries towards meeting the EU conditions for membership. Additionally, the ERT worked towards the establishment of so-called business enlargement councils (BECs) in CEE countries. The Hungarian BEC, for example, brings together representatives from the head offices of ERT companies with senior management officials of local companies, as well as government and Commission officials, and had the task of facilitating accession. At the level of social relations of production, this political strategy was supported through an increasing transnationalization of CEE countries’ production structure as a result of foreign investment by TNCs (Holman 2001: 174–7; Cecchini et al. 2001: 161–2). Overall, the promise of membership ensured a restructuring of CEE in line with the EU’s own development and satisfied the need of European transnational capital for further expansion of capitalist accumulation. As a result, EU enlargement with the social purpose of securing and intensifying neo-liberal restructuring in CEE fulfilled the objectives both of the CEECs’ elites, who wanted to secure restructuring externally, and of the EU and European transnational capital, who wanted to expand capitalist accumulation to the CEECs. Importantly, this does not signify that transnational restructuring was enforced on the CEECs from the outside. According to Holman (2001: 169), ‘the state forms the political framework within which internationally operating concepts of control can be synthesized with particular national political cultures, attitudes, constitutional arrangements and so on, or, conversely, the very medium through which hegemonic concepts of control can transcend national frontiers.’ Transnational forces of capital have become internalized within the CEE forms of state through their cooperation with state elites and their participation in the transnationalization of these countries’ production structures via FDI. The transnationalization of the CEECs’ production structure differs, however, from country to country, as does the way neo-liberal restructuring is internalized in the various forms of state. It is the task of future research to analyse more precisely which production sectors have become transnationalized in the individual countries and which political alliances have been forged between transnational capital and national state elites as well as the emerging national bourgeoisie. The role of the ERT as highlighted by Holman is clearly important. Future research, however, needs to ask additionally whether there had been similar strategies by transnational capital before the ERT’s pro-enlargement drive in 1997 and whether there are additional strategies parallel to the ERT’s current involvement. In other words, much more research is needed to establish how exactly transnational class formation takes place across national borders in

90 Andreas Bieler Europe in order to explain the specificities of each CEEC’s road towards EU membership.

Conclusion The neo-Gramscian analysis of the 1995 and 2004 enlargements against the background of globalization clearly identifies the neo-liberal restructuring of the new members’ and applicant countries’ economic-political systems as the underlying social purpose of enlargement. The way of how these processes of restructuring have been brought about differs, however, in the two instances. As Cox points out, the formation of a historical bloc and the establishment of hegemony is a national phenomenon (Cox 1983: 168, 174). The case of Austria’s and Sweden’s accession confirms this. Class struggle took place predominantly at the national level between nationally oriented, internationally oriented and transnational social forces. Only once the dominance of internationally oriented social forces had become internalized in the constitution of its form of state could Austria accede to the EU. In Sweden, the pro-EU project was based only on a strong alliance of transnational capital and labour and did not include a common social purpose. The fact that transnational capital favoured membership for its neo-liberal restructuring, while transnational labour hoped to regain control over capital at a higher level indicated that neo-liberal restructuring had not yet been fully internalized in the Swedish form of state. Unlike in Austria and Sweden, in CEE it was not alliances of social forces but state elites who initiated the process towards EU membership. Due to the lack of a well-entrenched capitalist market economy, a liberal democracy and a developed civil society, the process of neo-liberal economic restructuring after the end of the Cold War could not be grounded in the support of an alliance of social forces at the national level. Instead, the restructuring project had to be secured externally in a ‘passive revolution’. EU membership offered the best way forward in this respect. This coincided with the objective of European transnational capital, which had heavily invested in CEE and was interested in maintaining the extension of capitalist accumulation to CEE. It was strongly involved in a political strategy via the ERT, working closely together with the Commission on the EU’s pre-accession strategy. Rationalist political economy approaches, which fail to detect the difference between the Austrian and Swedish accession to the EU, are even less suitable in the case of future enlargements. Their sole focus on domestic politics and the competition between leading sectors over governmental policy does not allow them to conceptualize this type of transnational class formation. Through neo-liberal restructuring as underlying rationale, enlargement clearly reinforces the hegemony of neo-liberalism within the EU. As mentioned in the introduction, however, hegemony is always contested by rival social forces and their projects, indicating possible alternative developments in the future. In this respect, Austrian and Swedish national forces of labour and, to a lesser extent, capital continue to be potential members of a counter neo-liberal hegemonic project, as are those social forces organized by the Green parties in both countries.

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Moreover, Swedish transnational labour, owing to the counter neo-liberal rationale underlying its support for EU membership may also be a potential force for a counter neo-liberal movement. In the CEECs, the more the accession negotiations proceeded and illustrated who were to be the winners and losers of membership, the more intensive became the discussion about the EU. Stronger alliances of social forces are the likely result. As Bohle (2000: 322–3) points out, the transnationalization of the CEECs’ production structure does not lead to their general peripheralization, reducing them to the supply of cheap labour for labourintensive production processes. Rather, there is a dualization of production, in which the CEECs are selectively integrated into a transnational production regime. The so-called diamonds of the former state sectors, such as telecommunications companies and banks, are sold off to foreign investors, while the CEECs are left to cope with the problems of unproductive industrial sectors, such as mining and the steel industry, themselves. Forces engendered by the former sectors are likely to favour membership. Future research has to investigate the projects in the various applicant countries around which support for the EU was rallied in view of the referendums on membership. Neo-liberal economics is likely to have been a part of such projects, but they needed to go beyond economics, including issues of identity – as, for example, the notion of the ‘natural return to Europe after the Communist aberration’. Forces engendered by the latter sectors, which had to be further restructured in view of membership, are most likely to have formed an opposition. This included agriculture, the mining and steel sectors and also the public sector in the case of Poland (Szczerbiak 2001: 108, 114). The danger here was that resistance to globalization and EU membership rallied around a nationalist, traditionalist and/or xenophobic agenda. The election of two nationalist anti-EU parties, Samoobrona (Self-Defence) and the League of Polish Families, to the Polish parliament in the elections in September 2001 did not bode well in this respect (Financial Times, 25 September 2001). It is the task of future research to identify more clearly those social forces and projects within the enlarged EU which may be part of a progressive alternative project to neo-liberalism.

Notes 1 For alternative historical materialist approaches to European integration, see the contributions in Bonefeld (2001), and, for a critical engagement with them, see Bieler and Morton (2001c). 2 For a neo-Gramscian conceptualization of the role of ideas, see Bieler (2001). 3 Due to the financing of economic reform in the 1970s and 1980s via foreign debts, Poland and Hungary had already been integrated into the global financial market before the collapse of the Eastern bloc. This locked them even more into a course of neo-liberal economic restructuring (Holman 1998: 18).

Interviews 1 Section for National Economy, Austrian Federation of Trade Unions; Vienna, 12 May 1995.

92 Andreas Bieler 2 Director of the Europe Information Service, Federation of Austrian Industrialists (VÖI); Vienna, 22 May 1995. 3 Director of the Economic-Political Section of the Chamber of Labour (1985–93); Vienna, 23 May 1995. 4 Section International Trade and Environment, Association of the Austrian Textile Industry; Vienna, 24 April 1996. 5 Political Advisor on Europe in the Green Alternative Party (GA) fraction of the Nationalrat/Europe Coordinator of the GA; Vienna, 2 May 1996. 6 State Secretary for Integration and Development Cooperation in the Chancellor’s Office, responsible together with Dr Mock for the accession negotiations (1993–4), State Secretary for European Affairs in the Chancellor’s Office (1994–5), Managing Director of the SPÖ (since 1995); Vienna, 8 May 1996. 7 International Secretary, Swedish Confederation of Professional Employees (TCO); Stockholm, 11 November 1996. 8 Europe Coordinator, Swedish Social Democratic Party (SAP); Stockholm, 12 November 1996. 9 Political Coordinator European Affairs, Moderate Party, Political Advisor to Prime Minister Bildt responsible for coordination of coalition partners in the areas of foreign affairs, defence, labour and trade (1991–4); Stockholm, 15 November 1996. 10 Political Advisor, International Department, Swedish Trade Union Confederation (LO); Stockholm, 21 November 1996. 11 International Secretary, Municipal Workers’ Union (LO affiliate), member of the LO Committee on the EU; Stockholm, 26 November 1996. 12 President of the Swedish Trade Council, high civil servant under SAP government (1987–91), Chief Negotiator of EEA (1989–92), Chief Negotiator of EU accession treaty (1993–4), Minister for Trade and European Affairs (1991–4); Stockholm, 26 November 1996. 13 EU Coordinator, Research Department, Metal Workers’ Union (LO affiliate); Stockholm, 29 November 1996. 14 State Secretary, Ministry for Foreign Affairs, Chief Negotiator in the 1996 IGC; Head of Foreign Affairs Department, Ministry of Finance (1982–8), State Secretary, Ministry of Finance (1988–91); Stockholm, 2 December 1996.

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94 Andreas Bieler Fioretos, K.-O. (1997) ‘The Anatomy of Autonomy: Interdependence, Domestic Balances of Power, and European Integration’, Review of International Studies, 23: 293–320. FPÖ (1993) ‘Österreich Zuerst – Unser Weg nach Europa: für ein Europa der Bürger und Völker, für ein Europa als Freiheits-, Friedens- und Wohlstandsordnung’. 8 May 1993. GA (1989) ‘Europamanifest der Grünen Alternative, beschlossen auf dem EuropaKongress in Innsbruck vom 17.-19.02.1989’, in G. Kunnert (ed.) (1992) Spurensicherung auf dem Österreichischen Weg nach Brüssel. Vienna: Verlag der Österreichischen Staatsdruckerei, 348–52. Gower, J. (1999) ‘EU Policy to Central and Eastern Europe’, in K. Henderson (ed.), Back to Europe: Central and Eastern Europe and the European Union. London: UCL Press, 3–19. Grabbe, H., and Hughes, K. (1998) Enlarging the EU Eastwards. London: Royal Institute of International Affairs. Gramsci, A. (1971) Selections from the Prison Notebooks, ed. and trans. Q. Hoare and G. Nowell Smith. London: Lawrence & Wishart. Holman, O. (1998) ‘Integrating Eastern Europe: EU Expansion and the Double Transformation in Poland, the Czech Republic, and Hungary’, International Journal of Political Economy, 28: 12–43. Holman, O. (2001) ‘The Enlargement of the European Union towards Central and Eastern Europe: The Role of Supranational and Transnational Actors’, in A. Bieler and A. D. Morton (eds), Social Forces in the Making of the New Europe: The Restructuring of European Social Relations in the Global Political Economy. Basingstoke: Palgrave, 161–84. Hummer, W., and Schweitzer, M. (1987) Österreich und die EWG: neutralitätsrechtliche Beurteilung der Möglichkeiten der Dynamisierung des Verhältnisses zur EWG. Vienna: Signum. Ingebritsen, C. (1998) The Nordic States and European Unity. Ithaca, NY: Cornell University Press. Król, M. (1999) ‘Democracy in Poland’, in M. Kaldor and I. Vejvoda (eds) Democatization in Central and Eastern Europe. London: Pinter, 67–77. Laffan, B. (1992) Integration and Co-operation in Europe. London: Routledge. Luif, P. (1994) ‘Die Beitrittswerber: Grundlegendes zu den Verhandlungen der EFTAStaaten um Mitgliedschaft bei der EG/EU’, Österreichische Zeitschrift für Politikwissenschaft, 23: 21–36. Luif, P. (1996) On the Road to Brussels: The Political Dimension of Austria’s, Finland’s and Sweden’s Accession to the European Union. Vienna: Braumüller. Marginson, P., and Sisson, K. (1994) ‘The Structure of Transnational Capital in Europe: The Emerging Euro-Company and its Implications for Industrial Relations’, in R. Hyman and A. Ferner (eds), New Frontiers in European Industrial Relations. Oxford: Blackwell, 15–51. Meth-Cohn, D., and Müller, W. C. (1994) ‘Looking Reality in the Eye: The Politics of Privatization in Austria’, in V. Wright (ed.), Privatization in Western Europe: Pressures, Problems and Paradoxes. London: Pinter, 160–79. Morton, A. D. (2001) ‘The Sociology of Theorising and Neo-Gramscian Perspectives: The Problems of “School” Formation in IPE’, in A. Bieler and A. D. Morton (eds), Social Forces in the Making of the New Europe: The Restructuring of European Social Relations in the Global Political Economy. Basingstoke: Palgrave, 25–43. Öhlinger, H. (1988) Verfassungsrechtliche Aspekte eines Beitritt Österreichs zu den EG. Vienna: Signum. ÖVP (1988) ‘Maria Plainer Beschluss des erweiterten ÖVP-Bundesparteivorstandes vom 08.01.1988 zur Österreichischen Europapolitik’, in G. Kunnert (ed.) (1992), Spuren-

The struggle over EU enlargement

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sicherung auf dem Österreichischen Weg nach Brüssel. Vienna: Verlag der Österreichischen Staatsdruckerei, 245. van der Pijl, K. (1998) Transnational Classes and International Relations. London: Routledge. Pollert, A. (1999) Transformation at Work in the New Market Economies of Central Eastern Europe. London: Sage. Preston, C. (1997) Enlargement and Integration in the European Union. London: Routledge. Ste Croix, G. E. M. de (1981) The Class Struggle in the Ancient Greek World from the Archaic Age to the Arab Conquests. London: Duckworth. Seidel, H. (1993) ‘Austro-Keynesianismus – Revisited’, in F. Weber and T. Venus (eds), Austro-Keynesianismus in Theorie und Praxis. Vienna: Dachs Verlag, 145–9. Shields, S. (2001) ‘Transnational Social Forces and the Configuration of Polish Transition: Neoliberalism Revisited’, Irish Studies in International Affairs, 12: 21–37. Szczerbiak, A. (2001) ‘Polish Public Opinion: Explaining Declining Support for EU Membership’, Journal of Common Market Studies, 39: 105–22. Thompson, E. P. (1978) ‘Eighteenth-Century English Society: Class Struggle Without Class?’, Social History, 3: 133–65. VÖI (1987) Europa – unsere Zukunft: eine Stellungnahme der Vereinigung Österreichischer Industrieller zur Europäischen Integration. Vienna: Schreiftenreihe der Vereinigung Österreichischer Industrieller. Völkerrechtsbüro (1988) ‘Mitgliedschaft Österreichs in den Europäischen Gemeinschaften und immerwährende Neutralität (22.11.1988)’, in G. Kunnert (ed.) (1992), Spurensicherung auf dem Österreichischen Weg nach Brüssel. Vienna: Verlag der Österreichischen Staatsdruckerei, 34–40.

Part III

The macro-politics of enlargement

5

Constructing institutional interests EU and NATO enlargement1 Karin M. Fierke and Antje Wiener

Introduction The eastward enlargement, or expansion of the European Union (EU) and the North Atlantic Treaty Organization (NATO), respectively, is likely to transform the political and economic landscape of Europe. Yet there has been little analysis of the relationship between the two parallel processes. Instead, two separate literatures approach eastward enlargement from different angles. The literature on accession to the EU focuses primarily on more institutional, formal agreements and procedures, and less on the politics of the accession process (see Avery and Cameron 1998; Grabbe and Hughes 1998; Mayhew 1998; for conceptual work, see Schimmelfennig 1998; Sedelmeier 1998). Indeed, there has been little attention to the politics of European enlargement, that is, how it came about (for an exception, see Sedelmeier 1998). The question is important because neither EU enlargement nor NATO expansion was clearly envisioned in the immediate aftermath of the Cold War. The EU had taken steps, with the Single European Act, the common market project of ‘Europe 92’ and the Maastricht Treaty, to deepen European integration; many saw the potential of widening to a group of ‘fragile democracies’ in the East as undesirable if not destabilizing. The somewhat more lively political and academic debate over NATO expansion tended to revolve around the question of whether this move eastward would re-create the division of Europe or bring greater peace and stability to a fragmented region (see Brown 1995; MccGwire 1998; Mandelbaum 1996; Asmus et al. 1995; Glaser 1993; Sloan 1995). In the immediate aftermath of the Cold War, Western publics were questioning why NATO, as a defensive alliance set up to contain the Soviet Union, was even necessary or relevant in the absence of its Cold War enemy. Many, at the time, assumed that the more comprehensive Conference on Security and Cooperation in Europe (CSCE) would provide the framework for future security cooperation in a larger Europe, including Russia (Havel 1991: 35). As a result, one can question how and why the expansion of both institutions has proceeded despite questions about the material interest in doing so and in the face of increasingly negative public opinion.2 In other words, why does it appear to have become ‘inevitable’ to the actors involved in enlargement politics? The empirical question relates to a larger theoretical issue about how organizations know their interests and how these interests are transformed.

100 Karin M. Fierke and Antje Wiener Based on the observation that the existence of the Union’s acquis communautaire provides a normative basis for expansion eastward,3 constructivists have argued that enlargement of one of the institutions, the EU, can more readily be explained by normative considerations than in terms of objective interests (Schimmelfennig 1998). In this respect, a difference between the two institutions is apparent. Enlargement has been at the heart of the European Community’s identity from the start, and there have been a range of accessions since it began with the original six in 1957. In the process the EU has defined itself as a ‘widening’ organization in so far as any ‘democratic nation’ of Europe was a potential member. The acquis provides an important normative basis for enlargement, although the current potential is qualitatively different in scope than past accessions, which have involved only a few countries at a time. Eastern expansion has incorporated ten new countries and is likely to transform the institutions of the community dramatically. NATO, by contrast, lacks any formal equivalent of the acquis. While the idea of adding new members is not by definition in conflict with alliance formation, the expansion of NATO, as a Cold War alliance, had been largely unthinkable. In contrast to the classical European balance of power, characterized by states continually joining or leaving alliances, the nuclear stand-off between the two superpowers froze a particular pattern of allegiance in place; in that context, a request by Poland to join NATO could have provided the impetus for nuclear war. Since the end of the Cold War and the disappearance of the Soviet Union, this concern has faded. The key issue for the alliance is less one of adding new members than whether it is possible to do so without drawing clear boundaries between those ‘inside’ and those ‘outside’ the alliance. The central task of NATO, as an alliance defined in defensive terms – and that of alliances historically – has been one of protecting the sovereignty of individual states. Subsequently security practice has involved the drawing of clear boundaries, specifying who was protected by the American security guarantee and who was outside. The purpose of the organization is now being defined less in terms of defence than providing an anchor of stability. This raises fundamental questions about the meaning of security and NATO’s identity as a security organization. The difference between the two organizations only highlights the question of how the parallel processes of expansion became possible. Our argument relates both processes of expansion to the social construction of European identity during the Cold War. We seek to demonstrate that, in that context, both organizations developed a specific Western identity that was embedded in the construction of shared democratic norms. Crucially, these norms were the result both of social practices and of the definition of the democratic Western political order as different from the communist Eastern political order. The East was therefore an important reference point for the social construction of Western Europe. As this chapter will demonstrate, the post-Cold War context poses a dramatic challenge to this identity that is most clearly demonstrated by the respective enlargement processes. Now the Eastern Europeans, previously the West’s Other, seek membership in Western organizations. In this respect, the empirical question

Constructing institutional interests 101 relates to a larger theoretical issue about how institutional identities and interests are transformed. The chapter is divided into three sections. Section 1 explores the theoretical question at the core of the rationalist-constructivist debate as it relates to NATO and EU expansion. Section 2 builds a theoretical argument about the relationship between speech acts, norm construction and institutional interests. Section 3 develops a research agenda for comparing the expansion of the EU and NATO within this framework.

The theoretical question A rationalist approach to interests or preferences might proceed as follows. If we assume that the preferences or interests of actor A are X, that is, if we take these preferences as given, we can expect a particular outcome. For instance, if the EU, in the late 1980s, had had an interest in deepening, as opposed to widening, we could have expected an outcome that would have contributed to the realization of this interest. Rationalists make an argument that, given a set of preferences or interests, we can anticipate certain rational outcomes. The problem, in this case, is not to explain outcomes given a set of stable preferences; rather it is to gain some insight into the changing identity and interests of NATO and the EU. We therefore approach the problem from a slightly different angle than the rationalists. Rationalists take the context as given; we want to problematize the context. Rather than taking the rules of any particular game for granted, and focusing on the rationality of decisions within an assumed context, we want to elaborate on the context itself within which the changing identities and interests of both organizations were invested with social and political meaning. To do so, we suggest elaborating on a Wittgensteinian constructivist approach. Constructivists have challenged the rationalist assumption of exogenously given interests, arguing that interests are constructed in historically specific circumstances, that is, a context of social and cultural norms shapes actor identity and behaviour.4 Consistent with this assumption we explore interest formation and change in the process of eastern enlargement. We ask how and why Eastern expansion became part of the policy agenda despite serious doubts, in the early aftermath of the Cold War, that expansion was in the interest of either organization. Sociological constructivists such as, for example, Adler (1997) and Wendt (1992) have explored the nature of changing games, and of the reconstitution of identities and interests; however, in these constructivist accounts, meanings are instrumentally deployed by rational actors or rationality appears to be prior to the development of any shared context of meaning.5 For instance, Wendt’s analysis of the first encounter between alter and ego emphasizes the rational cost–benefit calculations of the two players. Alter and ego begin without a common language or history but possess a desire to survive and certain material capabilities. Through a process of signalling and interpreting, alter infers the costs and probabilities that ego’s intent is malign or friendly. Wendt focuses on an originary situation prior to the development of any kind of relationship; his theory is therefore not easily

102 Karin M. Fierke and Antje Wiener adapted to a situation where alter and ego have a past and are already embedded in a context of social interactions. Doty (1997: 387), by contrast, points out that encounters ‘always take place in a context wherein traces of prior meanings and representations are already in place and become interwoven in new experiences.’ She argues that a priori meanings constrain reasoning about the other, not an a priori rationality. We argue that a sociological constructivist approach provides only limited understanding of the current enlargement process. For instance, EU enlargement can in part be explained by the commitment to widen to other democratic states in Europe. This commitment is embodied in the acquis, that is, the legal provisions, procedures and rules of the Treaty of European Union. Enlargement fits within the shared norms of the Union, and these norms have a stronger pull than ‘objective’ interests. There are two problems with this argument, however. First, the institutionalist argument begs the question of why the rules and norms of the acquis would override other interests. Second, if NATO, as an institution that lacks the formal equivalent of the acquis, is also expanding, the explanation must in part lie elsewhere. Given the parallel processes of expansion, we raise a question about the role of another level of norms, shared by the two organizations, which may be propelling the expansion process. To provide an explanation for both processes of enlargement, our argument draws on a Wittgensteinian constructivism where meaning and language are central to the constitution of identity and interest (Fierke 1998; Kratochwil 1989; Onuf 1989; Zehfuss 1998). Wittgensteinian constructivism provides an important point of departure for the analysis that follows. In contrast to sociological constructivists, who often treat norms as causes (for a critique, see also Checkel 1999), scholars in this tradition have argued that once one enters the realm of social action and language, norms cannot be reduced to causes. Thus, Kratochwil argues, for example: our conventional understanding of social action and of the norms governing them is defective because of a fundamental misunderstanding of the function of language in social interaction, and because of a positivist epistemology that treats norms as ‘causes’. Communication is therefore reduced to issues of describing ‘facts’ properly, i.e. to the ‘match’ of concepts and objects, and to the ascertainment of nomological regularities. Important aspects of social action such as advising, demanding, apologizing, promising etc., cannot be adequately understood thereby. Although the philosophy of ordinary language has abandoned the ‘mirror’ image of language since the later Wittgenstein, the research programs developed within the confines of logical positivism are, nevertheless, still indebted to the old conception. (1989: 5–6, original emphasis) Building on this opening towards language, our theoretical argument seeks to push the constructivist argument further, by examining the process of norm construction in the dialectical relationship between context, speech acts and

Constructing institutional interests 103 institutional transformation. While the rationalist asks what outcome, given a set of preferences, can be expected, we instead ask in what kind of context the expansion of NATO and the EU would be meaningful and rational. In other words, we are not looking for a unidirectional relationship between preferences and outcomes, but rather at a changing context within which identities and interests are mutually constituted through a process of interaction. If the meaning of a speech act is dependent on a context, it follows logically that, if the context changes, so will the meaning of an act. The purpose of this analysis is to reflect on how, given the dramatic change of context resulting with the end of the Cold War, the meaning of the Cold War ‘promise’ of Helsinki was transformed into a threat. We have chosen to focus on Helsinki because it is a promise that transcended both organizations yet, given its three ‘baskets’, was related to the mandates of each.

Speech acts, contextual change and institutional interests This section outlines the contours of a more extensive empirical research programme. Three concepts – speech acts, contextual change and institutional interest – are developed against the background of the Cold War and post-Cold War transformations. We use these alternative categories to reconstitute the relationship between identity, norms and practices, reinforcing the constructivist point regarding the inseparability of identity and interests, and how their mutual transformation was constituted out of the dialectical relationship between the three concepts. The empirical examples illustrate that the rationality of both decisions has to be situated in a context of a priori and changing meanings in regard to the identity and norms of the West. While the EU and NATO are usually studied as separate phenomena, there is a historical relationship between the development of their respective roles and practices. The creation of Western institutions such as the EC and NATO in the late 1940s and early 1950s was inspired by a notion of security that was both economic and military. The European Coal and Steel Community, the first institution of the EC, was set up in the hope of binding the economic fate of Germany and France such that they would have a common interest in avoiding war. NATO was established for the purpose of protecting Western Europe from the Soviet Union. The security provided by one organization faced inwards; the security provided by the other faced outwards. Both notions of security formation stress the importance of a border of order provided by the two, which ran through the centre of Europe. Kratochwil (1994) argues that within a political community the discourse of citizenship creates a ‘border of order’ by defining who is inside and who is outside. This perspective on political community formation includes the observation that a community is more than the sum of its parts. That is, the discourse of citizenship reaches beyond the definition of rights. It also creates a notion of belonging which is constructed through practice.6 The ‘iron curtain’ represented a border of order for the EU and NATO, in so far as it played a crucial role in the process of identity formation for both

104 Karin M. Fierke and Antje Wiener organizations. States became members of each and, akin to the political rights of citizenship, acquired – qua membership – the right to vote within the order of each respective organization. Through political practice, NATO and EU member states have created a notion of belonging to a community within a particular order. This order was built on liberal democratic principles that were to a large extent established and sustained by negative definition in relation to the other side of the iron curtain, the communist East. The specific institutional identities were profoundly challenged by the post-Cold War situation. Enlargement is not simply a means to extend membership to a new member state; it also involves incorporating what was previously the Other, i.e., including members from another type of order. Enlargement in the post-Cold War context hence not only poses the challenge of a missing Other; both organizations also face a second challenge of having to incorporate members whose notion of belonging developed in a different context. Transgressing the Cold War border of order, therefore, raises the question of belonging anew. In the context of the Cold War, aside from early talk about the ‘rollback’ of communism, Eastern Europe became the largely forgotten half of Europe, invisible against the background of the Soviet Union’s dominating presence. The containment policy of NATO, which necessarily involved the USA, was defined primarily in relation to the Soviet Union. Until the period of détente, EU policy was largely inward-looking, preoccupied with the re-emergence of Western European economies. The self-definitions and normative ideals of both NATO and the EU were defined in opposition to the East. Western societies, with their openness, democracy and freedom, were contrasted with their closed totalitarian neighbours. The articulation of the West’s normative ideals served primarily to reinforce its own identity vis-à-vis the Other. Before détente, there was some hope that the two Germanies would be reunified and this was reflected in the failure to recognize the new GDR. This hope of obliterating the division of Europe subsided with détente. Eastern and Western European states created a framework of peaceful coexistence. The common principles which would guide their relationship were embodied in the three baskets of the Helsinki Final Act, which was signed by states in both East and West in 1975. Expansion was a non-issue; détente cemented the division of Europe, granting communist regimes in the East a legitimacy they had not previously enjoyed. Nonetheless, the Helsinki process was highly politicized from the start, as states in each bloc interpreted the document selectively (Bloed 1990: 283). Western states emphasized Western values, and in particular the primacy of human rights, while Eastern states emphasized disarmament provisions, non-interference in their affairs and the hope of economic aid. For the West, Helsinki represented the embodiment of Western ideals of the free flow of information, people and goods across the division of Europe, as well as the possibility of greater respect for human rights. The ‘promise’ articulated in the human rights basket of the Final Act came back to haunt first the Eastern European communist regimes, during the last part of the Cold War, and later, after its end, Western institutions. In what follows, we

Constructing institutional interests 105 articulate the theoretical relationship between speech acts, contextual change and the challenge to institutional identity by reflecting on the ‘promise’ of Helsinki. Speech acts: the promise of Helsinki An article in NATO Review, titled ‘Implementation of the Final Act of the CSCE’ (1976), referred to the significance of the document as follows (emphasis added; see also Luns 1979): The ultimate significance of the Final Act of the Conference on Security and Cooperation in Europe, signed in Helsinki on 1 August 1975, depends on the degree to which all its provisions are implemented by all the participants. Although the Final Act does not, in Western eyes, have the force of law and its implementation is voluntary, there is nevertheless a strong moral obligation on signatories to translate its promises into reality. The significance of the Final Act lay less in the force of law than in constructing a moral obligation. The goal was to translate the promise of Helsinki into reality. This promise is an example of a speech act. There is a long tradition of speech act theory, which has recently begun to seep into the international relations literature (see Austin 1962; Searle 1969; Levinson 1983; Duffy et al. 1998; Kratochwil 1989; Buzan et al. 1998). Several ideas at the core of this theory are relevant to our analysis. First, certain categories of speech are not simply descriptive or conveying information, but are acts in and of themselves. Acts of this kind are referred to as ‘performatives’. Saying something is doing something (Kratochwil 1989: 8). For instance, when someone says ‘I do’ in the context of marriage, they undertake an act which has a range of moral and legal consequences; the act constitutes the marriage, or brings it into being. The second point, which flows from this, is that speech acts are dependent on a context for their meaning. The meaning of a promise in the context of a marriage is quite different from a promise to pick up clothes at the cleaner or the promise of Helsinki. It is by virtue of the context that acts, such as promises or threats, have illocutionary force and perlocutionary effects. The two can be distinguished by the force of variously promising, ordering or threatening, and the meaning attached to these actions, as opposed to the effect of promising, forcing or frightening the addressee, or the bringing about of effects on an audience (Levinson 1983: 236). Both the illocutionary force and the perlocutionary effects are dependent on context. The third point, which is somewhat less obvious, is that speech acts do not necessarily presuppose any face-to-face communication between communicants. All that matters is that the content of the speech act is conveyed from one party to another. If state X targets its missiles on state Y, for instance, a threat may be communicated, even if the threat was not spoken.7 The propositional content of a promise or threat may also be conveyed through public discourse towards an Other, rather than in a direct face-to-face exchange. In this light, it is perfectly reasonable to understand the commitment of

106 Karin M. Fierke and Antje Wiener states, in the context of the Helsinki Final Act, as the expression of a speech act of ‘promising’ to undertake a range of activities. This promise was communicated both to other states involved in the process and to their respective publics. The human rights example is particularly interesting for examining the relationship between speech act and context. The illocutionary force and perlocutionary effect of the Eastern promise to respect human rights manifested itself on two levels, that is, towards the initiatives of Eastern European citizens, who pointed out the discrepancy between the promise and corresponding acts by Eastern governments, and Western countries, who, given the priority attached to human rights, encouraged the dissident Eastern Europeans. By 1976 and 1977 the Workers’ Defence Committee (KOR) in Poland and the Charter 77 in Czechoslovakia were pointing out the discrepancy between the promise of Eastern governments to respect human rights and the abusive treatment they were receiving for exposing violations. In this respect, Eastern citizens’ initiatives magnified the moral obligation which the promise entailed. Western countries reinforced this breach of promise by referring back to Helsinki. For instance, in response to the declaration of martial law in Poland in December 1981, the Special Ministerial Session of the North Atlantic Council stated that: The process of renewal and reform which began in Poland in August 1980 was watched with sympathy and hope by all who believe in freedom and selfdetermination; it resulted from a genuine effort by the overwhelming majority of the Polish people to achieve a more open society in accordance with the principles of the Final Act of Helsinki.8 The West recognized not only the role of the Helsinki Principles in encouraging this dissidence, but also the commitment to respect the right of individuals to help in ensuring full implementation (see Solesby 1978; Luns 1979; Nimetz 1980; de Carmoy 1982) and the responsibility of the West towards those attempting to uphold ‘Western’ ideals. As Lord Carrington stated: We must face squarely the complex moral and political dilemmas which developments in Eastern Europe pose for the West. Whatever we do, the Soviet Union will accuse us of subverting these countries. They are bound to say this because they cannot contemplate the enormity of their own failure in the area. Free societies have a power of attraction of which it would be perverse to be ashamed, and we should not be afraid to subvert by example. Our prime concern must be for the peoples of these countries themselves. We have a historical duty, and a political and moral responsibility to uphold their right to freedom and self-determination. (1983, emphasis added) In making this statement, Carrington emphasized that the West should encourage not revolution in the East, but rather reform. Consistent with détente,

Constructing institutional interests 107 the goal was not to overturn the Eastern order (and therefore the Western border of order) but to open it up so that the people there might live under freer conditions. The recognition of a moral obligation towards the Eastern dissidents, who were exposing the Eastern failure to abide by its promise of human rights, manifests a further illocutionary force in this context. The praise of Eastern human rights dissidents was situated again and again within a larger argument about the need for Western activists, who were questioning their own government’s policies in the area of disarmament, to recognize what precisely NATO, in particular, was defending, i.e., Western ideals of democracy and human rights (Levi 1982, de Carmoy 1982, Carrington 1983; Defois 1984). In both of these respects, the promise of Helsinki, articulated in the context of the Cold War, served primarily to reinforce the border of order separating East and West. Changing contexts, changing meaning From 1989 to 1991, the political landscape of Europe was transformed with the dismantling of the Berlin Wall and the collapse of the Warsaw Pact and the Soviet Union. Both the EU and NATO were forced to redefine their identities as a result. For the European Union, the dramatic changes accompanying the end of the Cold War created pressures to expand the community at a time when it had been preparing to ‘deepen’ further the integration of existing members. For NATO, as a military alliance, designed for the defence of the West within the Cold War, the key issue in the immediate aftermath was less whether NATO would expand than whether the alliance was necessary in the absence of its former antagonist (Lubkemeier 1991; Ando 1993). Against the background of a series of unanticipated changes that raised questions about the future identity of both organizations, past promises became one of the stable features in an otherwise uncertain situation. These promises were reinforced by the conceptualization of the end of the Cold War as a ‘victory’ for liberal democracy, capitalism and Western values. Dissidents had acted in the name of liberal democratic principles. Western leaders had recognized their responsibility to those upholding their ideals. With the collapse of communism, the West declared a victory. Each of these factors contributed to a transformation – once the context had changed – of promises from the past into threats. At this point we emphasize the Eastern European context; in the next section, we return to an analysis of the two Western organizations. With the end of the Cold War, the Central and Eastern European countries (CEECs) referred to their liberation from communism as a return to an original state, for instance, a return to the natural geographical and historical boundaries of Europe (Melescanu 1993), or a return to democracy after a historical detour, and a return to capitalism and to history (Jeszenszky 1992). This ideal healthy state was not primarily a geographical or physical category, however; it was normative. As the Romanian foreign minister Melescanu stated: ‘today’s Europe is to be found where its democratic, liberal and humanist values and practices succeed in shutting the door on the nightmare of authoritarian regimes, command economies, and a disregard for human rights and fundamental freedoms’ (Melescanu 1993:

108 Karin M. Fierke and Antje Wiener 13). The model for this ideal healthy state was a set of shared Western values going back to the Enlightenment and the democratic revolutions of the eighteenth century. The problem in the years following the collapse was that Western Europe wasn’t doing enough to contribute to this outcome. The Cold War victor, who had challenged Eastern bloc leaders to tear down the walls that kept Eastern Europeans in, appeared, in the immediate aftermath of the Cold War, to be constructing barriers to keep them out. The Western effort to reconstruct a new border of order flew in the face of everything the central and Eastern Europeans had expected from the West. Vaclav Havel, speaking before NATO in the early 1990s, presented this expectation and, like Lord Carrington earlier, the responsibility that flowed from it: The democratic West . . . was for years offering sympathies to the democratic forces in the countries of the Soviet bloc. . . . The protection of democracy and human liberty to which it has been committed has given encouragement and inspiration to citizens of our countries, too. . . . The determination to resist evil has been a source of hope for millions of people who had to live under a yoke. Because of that, the West bears a tremendous responsibility. . . . To the West, whose civilisation is based on universal values, the fate of the East cannot be a matter of indifference for reasons of principle, and for practical reasons either. Instability, poverty, misfortune and disorder in the countries that have rid themselves of despotic rule could threaten the West just as the arms arsenals of the former despotic governments did. (1991: 35, emphasis added) The West, and its institutions, represented a normative ideal. The CEECs were encouraged to act in accordance with these ideals in resisting totalitarianism. Now that ‘containment’ of the Soviet Union was no longer necessary, the West had a responsibility to assist the CEECs in the recovery, to assist them in upholding these values. Havel’s appeal to Western responsibility mirrored Carrington’s recognition of this responsibility a decade earlier. In the aftermath of the Cold War, democracy was presented as a cure for Eastern ailments, but, given the painful nature of the reforms, and the unhealed wounds reopened by the spirit of freedom, democracy would potentially give rise – and by 1993 had given rise – to social unrest and national conflict, most notably in former Yugoslavia where war had broken out (Gazdag 1992). The West had encouraged the adoption of ideals, had celebrated the hope and possibility of prosperity and democracy, but the prescribed cure, rather than contributing to recovery, was exacerbating tensions. The EU was accused of only a lukewarm response to Eastern problems, and NATO of isolating itself behind a new cordon sanitaire from the problems confronted by the CEECs since the fall of communism (Suchocka 1993: 6). The existence of norms supporting eastward enlargement was dramatized by Central and Eastern Europeans who pointed to the discrepancy between Western promises and actions. The Cold War promise to Eastern Europe became, in a new context, a threat of instability should the West fail to act. But the threat went even

Constructing institutional interests 109 deeper. As we will argue in the next section, a failure to act on the promise became a threat to the identity of both institutions. Redefining interests: the challenge to institutional identity The point of the last section was to illustrate how actors used the past promises of states to hold up a mirror to current practices. The mirror was first held up to the Eastern European regimes, who, in signing the Helsinki Final Act, promised to respect human rights and then proceeded to abuse the rights of dissidents who – morally supported by Western governments – pointed out the discrepancy. In the immediate aftermath of the Cold War, these same dissidents, many of whom had become state leaders, held a mirror up to Western governments, arguing that they, as the embodiment of the victory of liberal ideals in the Cold War, had a responsibility to those they had encouraged to adopt those ideals. These processes of mirroring provide a point of departure for rethinking the role of norms in processes of interest transformation. These acts of exposing a discrepancy cannot be accounted for by rationalist theories. Given the emphasis on individuals or states as purely self-regarding egoists, it is assumed that promises will not be respected if they are in conflict with one’s self-interest, regardless of others. However, if one’s identity and ability to act are understood to be fundamentally social and, therefore, dependent on the recognition of others, promise-keeping becomes extremely important. It is at the point that others recognize the violation of normative expectations, or the failure to live up to previously stated ideals, that shame or disrespect are experienced. As Honneth (1995: 259) shows, it is not in the positive affirmation of norms that one’s constitutive dependence on recognition from others is evident, but in the inability to continue with action once confronted with the discrepancy. The ability of states or alliances to act is as dependent on the positive recognition of identity as it is for individuals. Both rely on some measure of acceptance of an alignment between ideals or moral argument and practice. In the aftermath of the Cold War the CEECs were seeking recognition from the West. But Western identity was also dependent on recognition. Too great an inconsistency between the normative ideals which the West represented and its practices towards the CEECs would be damaging to the identity of the EU and NATO, not to mention those elites in the CEECs who were attempting to provide a democratic carrot rather than a nationalist stick (Allin 1995). The institutional challenge took a somewhat different form for the two organizations, however. In the case of the EU, the prospect of inclusion by way of enlargement was offered to all European states that shared its goals (Preamble to Single European Act, 1987). The responsibility of Europe as a whole, to speak increasingly with one voice, and the necessity for all democratic European states to be represented by and through the European Parliament, became constitutionally entrenched in 1991 with the Maastricht Treaty on European Union (TEU), which states: ‘Any European State may apply to become a member of the Union’ (Article O, TEU). The promise was enhanced at the Copenhagen Summit in June 1993 in the

110 Karin M. Fierke and Antje Wiener Conclusions of the Presidency, which stipulated that ‘membership requires that the candidate country has achieved stability of institutions guaranteeing democracy, the rule of law, human rights and respect for protection of minorities.’9 The Amsterdam Treaty restates the intention of enlargement and explicitly the democratic condition, stipulating: ‘Any European State which respects the principles set out in Article 6(1) may apply to become a member of the Union’ (Article 49, TEU). The promise of enlargement is hence firmly expressed in the treaty, on the condition that the candidates are European states, governed democratically, and based on the principle of law. The key issue in the context of recent EU enlargement is less the uniqueness of adding new members than the changing context in which it has taken place. While the sheer number of new members played a role in the complexity of this process, to be sure, we argue that the absence of the Cold War border of order influenced this process.10 Candidate states have historically been required to accept the acquis in joining. The same was true in the most recent membership negotiations. However, an accession of this size and scope posed a challenge to the institutional capacities of the EU. It hence required a reshuffling of the EU’s institutional balance before accession could proceed. The 1996–7 intergovernmental conference at Amsterdam (IGC) postponed a decision in this respect, however, no later than the point when EU membership would exceed the number of twenty.11 As one observer remarked, it was not obvious why twenty members should come to an agreement that fifteen could not reach.12 At any rate, the unresolved question of institutional balance at Amsterdam did present a hurdle in the enlargement process. To postpone the decision reflected a creeping insecurity in handling the process among EU member states. Effectively, this insecurity meant a gradual move away from previous promises of enlargement uttered in the Cold War context. This new stress on the conditions for enlargement, rather than the promise that it would take place, suggested that the EU was now less ready to take on the responsibility it had assigned for itself earlier when eastern enlargement was not yet in sight. Indeed, more recent documents point to the development of a policy which involved adding conditions for enlargement. One such condition, for example, regarded a respect of minorities; candidates had to comply with this condition before joining the club. While the condition as such fits well into the shared norms of liberal democracy, it is striking that, while respect for minority rights is a condition to be accepted by the eastern candidates of the EU, it is not explicitly mentioned in the acquis to which the Western members have adhered. We can, therefore speak of hurdles being constructed for Eastern candidate countries. There is a clear tension between the promises of the past and the slow emergence of present concerns. This shift was expressed during the Austrian presidency of the Council of the EU at the beginning of accession negotiations with individual candidate countries on 10 November 1998. With the actual accession in view, worries about EU security, human rights, minority politics, and threats to EU employment security led to an increasing number of key political actors to caution against enlarging too rapidly.

Constructing institutional interests 111 For example, on 1 July 1998, the Council president, the Austrian foreign minister, Schüssel, stressed that ‘concern is now mounting that the date for the enlargement of the EU to take in countries from Eastern European and Cyprus will be put back as the countries concerned struggle to meet EU standards.’ While negotiations were formally opened under the British presidency over a whole series of policy areas, Schüssel warned that not only would the new countries have to make strenuous efforts but the EU would have to undertake major reforms before enlargement could go ahead: ‘Even the Union itself is currently not yet in any fit state to take in new members’ (EP News, July 1998: 1). And, later in the process, supporting Chancellor Klima, the Austrian MEP Swoboda stressed that ‘not only Austrians but also people in the candidate countries were anticipating this project of the century [EU enlargement] with concern. It would be irresponsible to forcefully push both EU and the candidate countries towards hastened enlargement.’ At the same time, the beginning of the accession negotiations were praised as a ‘historical day’, as an achievement that had been ‘a particular concern of the Austrian presidency’, according to the Council president, Schüssel. As the latter stressed, the accession conferences beginning in Vienna signified the ‘return to Europe of Hungary and other Eastern European partners after more than eighty years of the breakdown of the Austrian-Hungarian monarchy’ (Der Standard, 10 November 1998, translation AW). From the beginning of the German presidency of the Council in January 1999 the main obstacle to compliance with previous promises was the financial burden of enlargement. Next to the issues of institutions, minority rights and security, ‘money’ now appeared to be the major constraint in the process of enlargement. Instead of speaking with one voice seeking to include the newly democratized CEECs in the project of European integration, the EU member states appeared to be quarrelling among themselves over who should bear the financial brunt of eastern enlargement. The German ministry of state raised suspicion that other member states had high hopes for the Germans to ‘pay it all’. But, on the contrary, the ‘favourite toy of the Germans is now the calculator’ (Die Woche, 5 February 1999: 21), and it was clear that, without successful budgetary reforms, enlargement was not likely to take place in the near future. Chancellor Schröder of Germany, for example, painted a dire picture of European integration if the financial burden was not reshuffled, pointing out: ‘The century of European integration will see little success if burden-sharing is not distributed on a more equal basis’ (Die Woche, 8 January 1999: 4). Despite these financial constraints, the German presidency continued to reassure the CEECs with statements about the duty to enlargement. As the German foreign minister Fischer stated: After the Cold War the EU must not be limited to Western Europe, instead, at its core the idea of European integration is an all-European project. Geopolitical realities do not allow for a serious alternative anyhow. If this is true, then history has already decided about the ‘if’ of eastern enlargement, even though the ‘how’ and ‘when’ remain to be designed and decided. (Die Zeit, 21 January 1999: 3)

112 Karin M. Fierke and Antje Wiener The at times contradictory comments on enlargement as a historical opportunity to reintegrate the Eastern European countries, on the one hand, and a concern of the West regarding issues of security, institutions and finance, on the other, point to the conflicting interests in the context of the enlargement discussion. An EU identity that is based on Western democratic principles, and the related promise of enlargement, is at odds with emerging practical policy problems. A discursive analysis reveals that continuity in the enlargement process, despite frequently raised concerns, can be explained in terms of an EU identity that is rooted in shared norms and values. The strong emphasis on the norms structuring EU policy strategy was expressed in the European Parliament’s Oostlander Report (1996), which cautioned against ‘manoeuvring’ aimed at postponing the opening of negotiations until precise details about the cost of enlargement became available. With too much room to manoeuvre, the author maintained, ‘enlargement will never take place.’ The issues raised by the dramatic end of the Cold War were somewhat different for NATO. The key point was less whether NATO would expand than whether the alliance was necessary in the absence of its former antagonist. Since NATO lacked the institutional equivalent of the EU acquis in regard to new members, the idea that it should expand was far from apparent. While the end of the Cold War brought the relationship between widening and deepening back on the EU’s political agenda, the military security question was initially less one about expansion than one about the relationship between NATO and the larger Organization for Security and Cooperation in Europe (OSCE), which already included the CEECs. NATO had ‘won’ the Cold War, but, despite this apparent success, its continuing relevance was being called into question. The central problem was the reluctance of publics and parliaments on both sides of the Atlantic to direct resources to the organization in the absence of any apparent threat (Lubkemeier 1991; Ando 1993). Neither NATO nor the countries of Central and Eastern Europe assumed from the beginning that NATO would expand militarily to the East. Through a series of moves over several years the expansion became inevitable.13 The motor of this transformation was the conflict between two promises. In the last section, we explored how the CEECs gave meaning to their struggle for recognition by the West during this period. The CEECs argued that failure to expand would give rise to disorder. By contrast, one of NATO’s arguments against military expansion was that it would arouse fears in Russia that the West sought domination over its former enemy, exacerbate xenophobic sentiments and intensify a reluctance to proceed with cuts in defence spending on the part of the Russian population (Taylor 1991; Holst 1992). Russia had articulated its opposition to the expansion of NATO, but then made a surprise move in August 1993 in signing the Russian–Polish declaration which granted Poland leave to join the alliance. Yeltsin’s act was viewed hopefully by the CEECs, but not in Russia. Instead, ‘non-democratic’ forces interpreted the possibility of NATO expansion as a move to re-establish the Cold War and isolate Russia (Ignatenko 1994; Sturua 1994). The strong Russian reaction created some nervousness in the West, which was

Constructing institutional interests 113 reflected in NATO’s Brussels summit in January 1994. Faced with pressure from the CEECs to join the alliance, and with the prospect that a decision to expand would mobilize nationalist forces in Russia, NATO mapped a middle course by creating the Partnership for Peace (PfP). The PfP would make it possible to delay the decision about expansion but, at the same time, would allow the CEECs to prepare for such an eventuality. While the West initially sought to mollify nationalist and communist forces in Russia through the PfP, the CEECs, concerned about the same development, emphasized the promise of the partnership to prepare candidates for future membership. The Polish defence minister Kolodziejczyk, referred to the January summit and the proclamation of the PfP by the alliance: ‘We expect and would welcome NATO expansion that would reach to democratic states to our East.’ He further stated that Poland undertook the partnership as ‘the best route towards its goal of full integration in the Alliance’ (Kolodziejczyk 1994). Poland drew on the promise of the PfP to press Polish interests. At the beginning of 1994 NATO said there would be no immediate enlargement. By mid-1994, after President Clinton’s speech in Warsaw, momentum had shifted towards enlargement.14 At the December 1994 Brussels meeting of NATO foreign ministers, a decision was made to proceed with expansion. The enlargement of NATO was placed in the context of building a European security architecture which would extend to the whole of Europe. While enlargement was initially avoided out of fear that it would re-create the division of Europe, by 1996 it was said to have rendered the idea of dividing lines in Europe ‘obsolete’ (Moltke 1996). Any distinctions between countries as a result of expansion would be ‘contours’ indicating ‘degrees of difference’ rather than dividing lines. By developing a ‘true partnership’ with Russia and making a conceptual linkage between the enlargement of the EU and NATO, the expansion was to communicate the parallelism of integration and cooperation: the integration of new members and the deepening of cooperation with those nations who are not, or not yet, ready or willing to join (Voigt 1996). Like past applicants to the EU, the CEECs viewed membership in the two organizations as part of the same package. Even though the initial concern of the CEECs was an economic one, the challenge was raised to both organizations. Through a series of incremental decisions, not least of which was the creation of the PfP, the Visegrád countries (Poland, Hungary, the Czech Republic and Slovakia) emphasized those parts of the promise which would contribute to their eventual membership. Once a decision had been made to include the Visegrád countries, the threat began to focus on a more traditional security concern and the promise to avoid new ‘spheres of influence’ in Europe, as leaders of the Baltic states pointed to promises by American leaders that ‘No nation in Europe should ever again be consigned to a buffer zone between great powers or related to another nation’s “sphere of influence”’ (Christopher 1993; see also Golob 1996). Until the attacks on the USA on 11 September 2001, after which Russia’s position changed, NATO faced a conflict between its promise to expand to the Baltic states and its promise of genuine partnership with Russia, which opposed a further wave

114 Karin M. Fierke and Antje Wiener of expansion. The politics of the situation were altered following the attacks as Russia joined the USA in the War on Terrorism and became less resistant to expansion. In conclusion, it is interesting to look at the relationship between contextual changes, normative ideals and institutional expansion for each of the three players – the EU, NATO and the CEECs, respectively. This approach provides insight into the rationale for the expansion of both Western organizations by placing them in a changing intersubjective context, which has been transformed through the interaction of the different players. The changing context, while more dramatic for the CEECs than the West, constructed the possibility for the former to articulate two compatible interests, i.e., inclusion in both NATO and the EU, while creating conflicting interests for both Western organizations. The changing context disrupted the future plans of the EU and NATO, presenting an entirely new situation to which they had to respond. In order to maintain the identity of the West as victor in the Cold War, Western institutions had to act with some semblance of consistency with the normative ideals they represented. The promise of prosperity and democracy were stable and constant features against a backdrop of material disarray. The CEECs drew on these normative ideals to pressure the West to keep their promises. While failing to provide the massive assistance reminiscent of the Marshall Plan, both the EU and NATO did reinforce the promise of eventual inclusion. By making the CEECs responsible for their own readiness to join, the West also provided a carrot that would hopefully dampen the conflicting tendencies towards disintegration in the East. The promise constituted the possibility of expansion. Against the background of a dramatically changed context, the CEECs transformed the promise into a threat, making maximum use of their compatible interests in expansion by both institutions. By contrast, NATO and the EU were pulled towards expansion against the background of conflicting interests.

The challenge of eastern enlargement and the constructivist research programme The comparison of EU and NATO expansion provides insight into the expansion process in a way that an analysis of either organization, in and of itself, cannot. Based on this brief comparison of the two cases of enlargement politics we have argued that an explanation of both processes, against the odds, requires embedding these policy decisions in a normative order which does not exclude the EU’s acquis but is larger and encompasses NATO as well. When embedded in this larger normative order, moves by NATO and the EU to redefine their interests regarding expansion can be understood as emerging out of the tension between past promises and ongoing practice in a context of dramatic change, which, in the absence of the old border of order, constituted a challenge to the Cold War identities of the two institutions. To this end, we examined a process of norm construction which preceded the critical juncture of the end of the Cold War. In doing so, our analysis fits squarely within the constructivist debate but pushes

Constructing institutional interests 115 further. We elaborate the relationship between norms, practices and identity, and how interests were transformed in the dialectical relationship between the three. The constructivist emphasis on identities, norms and practices provides an important point of departure for understanding the expansion process; at the same time, we note that this literature has not sufficiently addressed issues raised by a context of dramatic change where the ‘other’ disappears or undergoes significant transformation. Building on the strengths and expanding on the weaknesses of this tradition, our argument includes the following components. First, the enlargement decisions have to be embedded in a longer process going back to the construction of norms during the Cold War. The key issue is how the meaning of speech acts embodying these norms changed with the end of the Cold War, and how this constructed the conditions for eastern enlargement. The argument rests on a dialectical relationship between context, speech acts and institutional change. The rationality of moves by either organization has to be situated in a context of past meanings. Second, we emphasize that context and speech acts are explicitly intersubjective. As a result, we assume the importance of the meanings actors bring to their own actions and the material world around them. This points to one other crucial element that has not been adequately addressed in some of the constructivist literature, that is, the role of language. The reluctance to take language seriously undoubtedly relates to a widespread acceptance of the realist assumption that the primary speech act of diplomats is the lie and that states will break promises if it is in their interest to do so. The following turns the realist argument about language on its head, analysing ‘promises’ as a specific form of action, and looking at processes by which the two institutions were held to account for their promises and normative ideals. Third, if meaning is dependent on context, it follows logically that, as a context changes, so will the meaning of acts. We argue that the promise of Western institutions, held out to the former Eastern bloc during the Cold War, was transformed into a threat, by both East and West, with the dismantling of the European division and the Soviet Union. This new threat gave rise to a conclusion that the CEECs could not be excluded, over the long term, from Western organizations. If Western acts were not consistent with past promises, the consequence would be a loss of popular support for democratic institutions and a free market economy, which would exacerbate nationalist tensions and ethnic rivalries in the region, creating a security threat for the West. The threat not only took the form of potential instability in the East, however; the failure to fulfil the promise, and the exposure of this failure, presented a threat to the identity of the two organizations.

Notes 1 This chapter was originally published in Journal of European Public Policy, 6(5) (1999): 721–42. 2 See, for example, public opinion changes which demonstrate an increased scepticism towards NATO enlargement. Surveys show that, while in 1996 majorities of 56 per cent in France, 61 per cent in Germany, and 66 per cent in Britain welcomed enlargement,

116 Karin M. Fierke and Antje Wiener

3

4 5 6

7 8 9 10

11 12 13 14

these percentages changed significantly, to 39 per cent in France, 38 per cent in Germany and 42 per cent in Britain in 1997 (European Opinion Alert, USIA Office of Research and Media Reaction, 7 February 1997; cf. Statewatch, DB2WEB, 2 October 1998). The acquis communautaire, or the shared properties of community law and legislation, has come to be the guiding framework for enlargement procedures in particular (Michalski and Wallace 1992). Indeed, the accession acquis has been identified as the oldest form of acquis, entailing ‘the whole body of rules, political principles and judicial decisions which new Member States must adhere to, in their entirety and from the beginning, when they become members of the Communities’ (Gialdino 1995: 1090). For a more in-depth elaboration on the distinction between various strands of constructivist approaches in IR, see Christiansen et al. (1999). Doty (1997) and Campbell (1998) have this critique in greater detail. There are two conceptions of these practices: one is the republican notion of identity formation by way of political debates among citizens (see, for example, Preuss 1995); the other has been defined as ‘the conflictive process of establishing the institutional terms of citizenship, i.e. citizenship practice’ (Wiener 1998a: ch. 2, 1998b: 305). We would like to express our thanks to Gavan Duffy both for this particular example and for clarifying this point. Special Ministerial Session of the North Atlantic Council, 11 January 1982, ‘Declaration of Events in Poland’, NATO Review, 30 (1982): 28. Bulletin of the European Communities, 6 (1993), point I.13. Previous accessions have not involved more than a few countries at a time. By contrast, now, with the Cold War over, expansion has incorporated ten new countries, which is almost double the previous membership. The new CEECs are the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia and Slovenia. On the IGC’s failure to prepare the EU’s institutional balance for enlargement, see Sedelmeier (2000); Falkner and Nentwich (2000). See: European Policy Centre, September 1997, http://europa.eu.int/en/agenda/igchome/instdoc/universe/europe.htm, pp. 1 and 2 respectively. For a more in-depth analysis of the processes underlying NATO expansion, see Fierke (1999). The US congress and public opinion were once again asking why they should continue to invest in the alliance, given the failure to take effective action in Bosnia (Sloan 1994; Aspin 1994). At the same time, alliance countries were faced with major cuts in defence spending and renewed questions about the relevance and need for NATO in the absence of a Soviet threat (Bruce 1994; Sloan 1994; Rose 1994). Expansion was the answer to these problems. The desire of the CEECs to join the alliance became proof of its continuing relevance and mission (Aspin 1994).

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6

Eastern enlargement Risk, rationality and role-compliance1 Ulrich Sedelmeier

Introduction The policy of the European Union (EU) towards the Central and Eastern European countries (CEECs) displays the complex relationship between these four themes of risk, reform, resistance and revival. The 1989 revolutions presented for the EU and its member states not only new opportunities, but also the risk of political instability if the transformation processes should fail. The academic literature of the time broadly agreed that the best way to avert this potential risk was to integrate the CEECs with the EU and ultimately, to allow for eastern enlargement. In turn, eastern enlargement required the EU to undertake farreaching internal reforms (see, e.g., Mayhew 1998; Grabbe and Hughes 1998; Avery and Cameron 1998). In an optimistic scenario, eastern enlargement may thus lead to revival and a new dynamism, as it presents a window of opportunity to address accumulated contradictions of the integration model and carry out long-overdue reforms. In a pessimistic scenario, although enlargement might serve the EU’s collective longterm interest, it might fail because the resistance from negatively affected actors might lead to a ‘joint decision trap’ (Scharpf 1988). Since enlargement as well as the necessary reforms needed to be endorsed by all member governments, individual governments that considered themselves better off under the status quo (for example, in terms of receipts from the EU budget through agricultural and structural policies, national influence, efficiency of collective decision-making, future prospects for ‘deep integration’, etc.) can prevent decisions that would allow the EU to avert a common risk. In this sense, the EU’s policy in the 1990s towards the CEECs could be interpreted as a (test) case of collective foreign policy-making (see, e.g., Niblett 1995; Torreblanca 1997; Smith 1998; Zielonka 1998). From this perspective, the decision of the Luxembourg European Council (December 1997) to open accession negotiations with a first group of CEECs in March 1998 was striking. It seemed to provide an unexpected but welcome proof of the EU’s ability to overcome lowest-common-denominator bargaining and of collective problemsolving. Agreement on an eastern enlargement thus seemed an expression of the EU’s capacity as a strategic actor in international politics.

Eastern enlargement 121 However, the strategic coherence of the decision for eastern enlargement is far more ambiguous than this interpretation suggests: the decision to start accession negotiations was taken without any prior agreement on internal reforms. It was taken more than a year before the debate about policy reform undertaken by the Berlin European Council in March 1999, and despite the still fresh impression of the manifest failure to agree on institutional reform at the 1996–7 intergovernmental council (IGC).2 More broadly, agreement was reached in the absence of any thorough debate on the shape of an enlarged EU. Of course the EU had a track record of delivering eleventh-hour agreements and a strong aversion to difficult compromises as long as there is still scope for postponement. Nonetheless, the reforms that relate to enlargement were piecemeal and involved incremental tinkering, rather than thorough anticipatory adaptation. The adequacy of the policy reforms and financial perspective crafted at Berlin have been doubted (see, e.g., Begg 1999). The limited tidying-up IGC in 2000, resulting in the Treaty of Nice, reflected no ambition for institutional reform. Thus, rather than being a strategic collective response to a common risk, the EU’s decision to enlarge seems to create its own risks for the integration project in the future. The EU’s decision to enlarge thus presents a number of puzzles. Why did the member governments agree on enlargement without prior agreement on reform, despite the risks and future costs that makeshift compromises create for all of them collectively? Why did they give the go-ahead, despite the uncertainty about the final shape of a deal on internal reforms? More generally, why do those member governments for which it is clear that the negative consequences of enlargement will outweigh possible benefits, agree at all? For example, while their geographical position means that Ireland, Portugal or Spain are not particularly vulnerable to political instability in the CEECs and are not best placed to exploit the economic opportunities of enlargement, internal policy reforms entail for them the risk of losing substantial receipts from the EU budget. Thus, at the empirical level, the fundamental puzzle is why the EU committed itself to enlargement, despite the costs that arise for individual member governments which all have veto power. At the theoretical level, this puzzle pertains to the contemporary debate in international relations (IR) between rationalist and more sociological approaches. It challenges the explanatory power of materialist rationalist approaches that exogenize interests and assume that actors maximize material self-interest in strategic bargaining. This chapter thus sketches how an approach that takes account of non-material factors – namely the role of collective identity that the EU has created for itself in its relations with the CEECs and the regulative norms that this identity entails – can improve our understanding of the evolution of the EU’s policy towards the CEECs. I argue that the EU’s collective identity towards the CEECs includes the notion of a ‘special responsibility’ of the EU towards the CEECs. It proscribes purely selfinterested behaviour by policy-makers acting on behalf of the EU, and prescribes a degree of accommodation of the CEECs’ preferences in EU policy. This component of the EU’s collective identity does not determine policy outcomes. Yet it

122 Ulrich Sedelmeier limits the range of available policy options, by precluding certain options as inappropriate, and by reinforcing the legitimacy of others. In this way, it created a certain scope for a group of policy advocates, located primarily inside the Commission, to obtain approval for a number of policy initiatives that incrementally, but firmly, set the EU on the path towards enlargement. However, while compliance with the EU’s professed role made it difficult for policy-makers to oppose such initiatives, it did not extend to forging consensus on a strategic approach to reform and on a collective sharing of the adjustment burdens. The chapter proceeds in three main parts. The first section traces the origins, and identifies the content, of the EU’s collective identity towards the CEECs. The second section presents the analytical concepts that help to understand how EU identity towards the CEECs has an impact on policy outcomes. The third section contains the empirical analysis. It focuses in particular on how agreement was reached on the formal endorsement of the CEECs’ eventual accession and on the agreement’s significance for subsequent policy developments.

The origin and content of the EU’s collective identity towards the CEECs This section seeks to trace the EU’s collective identity towards the CEECs – in the sense of the role that EU policy-makers collectively define for themselves in their relations with the CEECs – and to identify the norms that characterize it. This section therefore analyses the discourse of EU policy-makers on the EU’s role towards the CEECs. I argue that, throughout the Cold War and in response to the dramatic changes in the late 1980s, EU policy-makers discursively constructed a specific role of the EU towards the CEECs. This role implies a ‘responsibility’ of the EU towards the CEECs, in particular to support the political and economic reforms and their integration with the EU. Broader aspects of EU identity There are certain more general norms that define the EU’s identity more broadly and that could be expected to resonate particularly in its policy towards the CEECs. These include the norms embedded in the domestic structures of the member states. Liberal theories stress the importance of the identity of states defined by liberal (social) democratic norms for their international policies (see, e.g., Lumsdaine 1993), especially if they interact in an international institution that is committed to these norms (see, e.g., Risse-Kappen 1995). Along those lines, Schimmelfennig (1998, 1999, chs 7, 8 this volume) argues that the EU, as an international community of (European) states characterized by shared values and norms of liberal democracy, enlarges to include states that share these values. Other norms that characterize the EU’s identity more generally were generated at the EU level. This includes the notion of the EU’s broader European vocation which is expressed in the commitment to enlarge in the EEC treaty. In the

Eastern enlargement 123 preamble, the signatories state their determination ‘to lay the foundations of an ever closer union among the peoples of Europe’, rather than just the founding states, and explicitly call for ‘the other peoples of Europe who share their ideal to join their efforts.’ Article 237 EEC Treaty/Article O TEU stipulates that any (democratic) European state may apply to become a member of the EU. Fierke and Wiener (ch. 5 this volume), for example, emphasize the importance of this commitment for the EU’s enlargement policy. Finally, it could be argued that the notion of a broader European vocation as part of the EU’s self-image is not confined to an obligation to remain open. Previous enlargements have set a precedent for a special EU role in supporting democratic consolidation and market economic reforms. In part, this was implied in the original integration project (Wallace 1996: 19), and it was particularly obvious in the enlargements to Greece, Spain and Portugal. Such a role should resonate particularly in policy towards the CEECs. Friis (1998) argues, for example, that an important factor in the differentiation between the accession candidates was the ability of certain policy-makers to frame this decision as one concerning the stabilization of Central Europe. However, while these broader norms are important, the empirical evidence of earlier membership applications, as well as from the EU’s policy towards the CEECs, shows clearly that they are in themselves insufficient to prompt a decision by the EU to enlarge. In the cases of the British, Spanish, or Maltese applications, the member states were not reluctant either openly to veto or to block enlargement. The empirical part of this chapter shows that, in the case of the CEECs, the EU’s explicit acceptance of the principle to enlarge and its decision to start accession negotiations was very reluctant and incremental. These norms that relate to the EU’s identity more broadly might thus be important contributing factors to a more specific role of the EU towards the CEECs. But they alone seem insufficient to have triggered enlargement. In order to understand the particular case of EU policy towards the CEECs, we need to focus on the construction of the specific identity, role or self-image that EU policy-makers have collectively created for the EU in its relation to the CEECs, and on the behavioural norms that such an identity contains. Discursive creation of a specific EU identity towards the CEECs The formation of the EU’s identity towards the CEECs began with the origins of the EEC and continued throughout the Cold War. Statements by policy-makers from both EU institutions and member governments deplored the involuntary exclusion of the CEEC societies from the integration project, and asserted that, without them, this project remained incomplete. For example, Walter Hallstein claimed that the EU did ‘share one wish above all others which is to overcome the division of Europe’ (Reinicke 1992: 5), and Mitterrand stated in 1980 that ‘[w]hat we term Europe is a second-best option which alone cannot represent all European history, geography and culture’ (Haywood 1993: 275). In 1985, the

124 Ulrich Sedelmeier Dooge Committee’s report claimed that the EU had ‘not lost sight of the fact that it represents only a part of Europe’ and that ‘any progress in building the Community is in keeping with the interests of Europe as a whole’ (Council 1985). This discourse might have been genuine, or it might have been Cold War rhetoric, but when overcoming the division of Europe suddenly became a real possibility, it provided the script for EU policy-makers to assert a specific role for the EU in post-Cold War Europe and towards the CEECs in particular. Rather than a backtracking in the face of dramatically changed conditions, there was continuity in the discourse about its role towards the CEECs which reaffirmed the EU’s commitment. EU policy-makers, individually and collectively at successive European Council meetings, couched pledges of support for the CEECs in strong normative language. At Rhodes in December 1988, the European Council reaffirmed the EU’s ‘determination to act with renewed hope to overcome the division of the continent’ (Council 1988) and declared a year later, in Strasbourg: ‘The Community and its Member States are fully conscious of the common responsibility which devolves on them in this decisive phase in the history of Europe . . . The availability and willingness to cooperate are essential elements of the Community’s policy’ (Council 1989). At the beginning of 1990, Prime Minister Haughey affirmed on behalf of the Irish Council presidency that ‘[t]he EC can and must do more than anyone else . . . [It] has an enormous load of responsibility towards East Europe’ (Torreblanca 1997: 114); the Rome European Council in December pronounced itself ‘conscious of its special responsibility towards the Central and Eastern European Countries’ (Council 1990). The EU’s own discourse was endorsed and perpetuated from outside sources. The new CEEC governments declared it their ambition to ‘return to Europe’ by joining the EU, and the US administration stated that the CEECs were largely ‘Europe’s responsibility’ (Baker 1989). The continuity in the collective discourse of EU policy-makers and the validation from outside sources reinforced the EU’s self-proclaimed role and endowed it with more concrete substance: it had a ‘special responsibility’ towards the CEECs to use this ‘historical opportunity’ to overcome the division of the continent. The EU had actively to support the transformations in the CEECs and their integration with the EU. The discourse implied an EU commitment which, for those in charge of EU policy towards the CEECs, had become closely associated with the EU’s self-image. The discourse of a collective EU identity towards the CEECs that was characterized by a ‘responsibility’ became a central aspect of EU policy.

Policy impact and the uneven effect of the EU’s collective identity towards the CEECs Through the centrality of the notion of ‘responsibility’ in the policy discourse, EU policy-makers thus discursively constructed a specific role for the EU, or the EU’s collective identity, towards the CEECs. However, merely to establish the existence of such a collective identity is not sufficient to infer a causal effect on policy.

Eastern enlargement 125 This section therefore seeks to clarify the mechanisms through which EU identity has a policy impact. This is not only in itself a central concern of the social constructivist research agenda (see, e.g., Risse-Kappen 1994; Checkel 1998); it seems particularly necessary to understand the effect of identity on policy towards the CEECs. There was strong opposition inside the EU to acknowledge even the principle of enlargement in the Europe Agreements (EAs), and incrementalism characterized the subsequent evolution of the EU’s commitment to eastern enlargement. This contrasts with the virtually automatic effect on appropriate behaviour that is usually associated with constructivist approaches.3 The discursive existence of a collective EU identity centred on the notion of ‘responsibility’ was thus not, as such, sufficient to generate policy outcomes that accommodated the CEECs’ preferences. This chapter argues that a crucial aspect of the effect of the EU’s identity on its policy towards the CEECs was that it was uneven across the policy-makers involved, i.e., both the way in which and the extent to which it affected their behaviour varied. In order to understand its policy impact, we thus need to consider four related concepts, namely (1) the difference between shared and collective identities; (2) the distinction between constitutive and regulative effects of norms and identity; (3) the difference between internalization of norms and norm-conform behaviour resulting from rationalist calculations of reputational and social costs of deviation; and, as a consequence of these, (4) the importance of the agency by policy advocates. Certain norms or a specific identity may be shared by all members of a group. But even if they are not commonly held, they might nonetheless characterize the group collectively, if they have become either a prominent feature of the public discourse of the group, or formally institutionalized as common property. ( Jepperson et al. 1996: 54) The latter seems the case for the EU’s identity towards the CEECs. Some member governments that feared the consequences of eastern enlargement might not have shared equally a desire to integrate the CEECs in the near future. But they had been implicated in the creation of a discourse that implied a responsibility to support their integration. The key question is then to what extent and why those that did not individually share the goals implied in the collective discourse might have felt bound by it. To the extent that they did, it might have been due to a regulative effect of norms and identity. It is precisely this regulative effect that pushes the boundary between ‘thinner’ social constructivist approaches that emphasize the role of strategic action, and more sophisticated rationalist approaches that also include non-material factors. Rather than assuming an either/ or approach to social construction and rational choice, this focuses on the link between rationality and norm-compliance (see, e.g., Finnemore and Sikkink 1998; March and Olsen 1998). Identity and the norms that define it can have constitutive or regulative effects on

126 Ulrich Sedelmeier actors, or both. The effects of identity and norms are most far-reaching if they have a constitutive effect. This is the case if actors internalize certain norms or identities, if a given identity forms a large part of their multiple social identities, and if they have an effect on their preference-formation and interest-definition (see, e.g., Jepperson et al. 1996). This does not mean that regulative norms do not play a role in this case. They specify standards for appropriate behaviour through which a given identity is enacted in varying circumstances. Yet norms and identity might also have a purely regulative effect. In this case, the effect is merely on behaviour, not on underlying interests. They regulate behaviour by prescribing or proscribing appropriate ways of acting for a given role. This is different from the quasi-material constraints on strategies that many neo-liberal institutionalist accounts emphasize. However, more sophisticated rationalist approaches take account of the fact that actors might include in their cost–benefit calculations reputational concerns and the social costs arising from behaviour that does not comply with social norms (see, e.g., Johnston 1999). 4 Thus in order to understand how the uneven effect of identity influences EU policy towards the CEECs, we need to identify the constitutive effects and regulative norms that the EU’s collective identity towards the CEECs implies. To the extent that policy is evaluated with regard to its compatibility with the role professed in official statements, the somewhat diffuse notion of an ‘EU responsibility towards the CEECs’ is a rather vague guide. Nonetheless, as opposed to questions of specific policy detail, the prescriptions that it entailed on the general principle of eastern enlargement are fairly clear.5 The EU needs to contribute actively towards making enlargement a reality. At a minimum, enlargement could not be refused simply for the reason that it might compromise certain vested interests of the incumbents, as it presented a legitimate aim of the CEECs. In this case, the regulative effect of identity thus operates primarily through a prohibitive norm. Since its evaluative standard is clearer for the behaviour that it proscribes, rather than what it prescribes, the role of policy advocates is crucial. To have a positive effect on policy outcomes, it requires certain actors to advocate policy options with which others then conform because they feel they cannot refuse to do so, although they might have chosen otherwise had they not been forced to justify non-compliant behaviour. In turn, in order for a credible group of policy advocates to emerge, identity has to have a constitutive effect on certain policy-makers. This chapter argues that a group of policy advocates emerged around the Commission’s Directorate General for External Relations (DG I) and successive commissioners for external relations and their personal staff in their cabinets. These policy-makers identified most strongly with the EU’s role towards the CEECs and thus largely internalized the EU’s identity towards the CEECs. In sum, the argument that this chapter sketches does not suggest that EU identity towards the CEECs determined policy outcomes. Nor does it suggest that identity only has an effect if actors internalize it. To be sure, material self-interests and strategic bargaining are an important part of the process. Identity affects policy by structuring the ‘realm of possibilities’ for available policy options, which precludes certain options as inappropriate and reinforces the legitimacy of others

Eastern enlargement 127 (see, e.g., Price and Tannenwald 1996: 148–9; Klotz 1995: 461–2). It thus created the necessary scope for policy advocates to obtain agreement on incremental steps that advanced policy. Nor does it contradict the argument if actors whose preference formation is shaped by the internalization of identity behave strategically to maximize these preferences. They might even use normative arguments strategically to induce compliance in others, or they might appeal to actors’ self-interest to gain agreement. Indeed, the policy advocates frequently asserted that an accommodating policy towards the CEECs served the EU’s collective self-interest. Conversely, some actors might promote similar goals as the policy advocates for purely selfinterested reasons. They might even try to legitimize their goals with reference to norms. What matters in this case is why actors – for whom norm-compliance is not clearly complementary with material-interest maximization – are susceptible to their arguments. Interesting from a theoretical point of view is the effect on policy of the interaction between the referenced regulative norms and interests-definition, and between norm-compliance and rational choice, not an either/or causation. The regulative norm provided the necessary condition, which, in combination with strategic behaviour by the policy advocates and the support of some actors motivated by material self-interests, led EU policy towards eastern enlargement.

Advocacy, incrementalism and norm-compliance in the EU’s policy towards the CEECs The EU’s decision to start accession negotiations was not simply the result of a ‘history-making’ decision at the Luxembourg European Council in December 1997. Rather, the formal decision was the result of a number of apparently discrete decisions at different European Council meetings that made the enlargement process increasingly hard to reverse. I argue that the crucial step which started this expansive and cumulative logic of policy evolution was the formal endorsement of the CEECs’ membership perspective at the Copenhagen Council in June 1993. Table 6.1 highlights the key junctures in the evolution of EU policy. This section sketches how this agreement was reached and its significance for subsequent policy developments. It emphasizes the continued advocacy and the strategies of the policy advocates, the incremental nature of policy evolution, and the importance of the regulative effect of the EU’s identity in reducing the scope for a veto. The formal endorsement of the principle of eventual CEEC membership at the Copenhagen European Council During the negotiations of the Europe Agreements (EAs) with the first three CEECs in 1991, the latter wanted an acknowledged link between the agreements and their eventual membership. They were supported by the unit in the Commission’s DG I that was responsible for policy towards the CEECs (DG I-E), and external relations commissioner Andriessen and his cabinet. These policy-makers

128 Ulrich Sedelmeier Table 6.1 Key dates in the eastern enlargement decision December 1990 Start of negotiations for Europe Agreements (EAs) with the first three CEECs December 1991 First EAs signed June 1993 Copenhagen European Council (endorsement of CEECs’ membership perspective) December 1994 Essen European Council (agreement on pre-accession strategy) December 1995 Madrid European Council (indicative date for accession negotiations) July 1996 Start of the 1996–7 IGC June 1997 End of IGC, Amsterdam Treaty July 1997 Commission’s ‘Agenda 2000’ published December 1997 Luxembourg European Council, decision to start accession negotiations with five CEECs in March 1998 March 1998 Start of accession negotiations with five CEECs March 1999 Berlin European Council (agreement on budgetary perspective 2000–06) June 1999 Cologne European Council (decision to hold short IGC on institutional reform in 2000)

had continued close contacts with their counterparts in the CEECs and soon acted as advocates of the CEECs’ interests inside the EU and of their integration with the EU, which they regarded as the EU’s responsibility and in line with its role.6 However, the EU’s overall position on the CEECs’ membership perspective was highly restrictive. The member governments, except for the German and British, and parts of the Commission were strongly opposed to creating a link to eastern enlargement, or even to engage at this stage in a debate about enlargement as a longer-term prospect. As a result, the directives for the Commission negotiators specified that, if the CEECs should raise the issue during the negotiations, they should simply refer to the general possibility, according to article 237 EEC, for any European state to apply for membership.7 The conduct of the negotiations and their final outcome on this issue was fairly close to what rationalist approaches would expect. In the intra-EU debate, the member governments’ positions seemed to reflect the cost–benefit calculations of the longer-term implications that such an acknowledgement of the CEECs’ eventual membership would entail. In the negotiations, the asymmetries in bargaining power between the member states and the CEECs constrained the accommodation of the CEECs’ preferences.8 Although the Council agreed to make the negotiation directives more flexible in order to resolve the negotiation deadlock resulting from the dissatisfaction of the CEECs, this concerned mainly the EU’s trade concessions. On the membership perspective, the Council agreed to a formulation in the preamble which acknowledged eventual membership as the ‘ultimate objective’ of the CEECs. This formulation, however, fell well short of acknowledging this as a mutual objective shared by the EU, and made clear that membership would be far from an automatic consequence of association. Still, the Commission negotiators inserted in the paragraph of the preamble that ‘in the view of the parties these agreements will help this objective.’ Although this went beyond the negotiation directives, none of the delegations in the Council

Eastern enlargement 129 wanted to object formally to it.9 In this sense, the EA negotiations also showed that the EU’s professed role towards the CEECs created a certain room for manoeuvre for the policy advocates inside the Commission. Although this concession seemed to stretch to its absolute limits what the main actors on the EU side could accept, a year and a half later the EU agreed on the step that the great majority of member governments and parts of the Commission had opposed rigorously.10 The Copenhagen European Council in June 1993 declared that the CEECs ‘that so desire shall become members of the European Union. Accession will take place as soon as an associated country is able to assume the obligations of membership by satisfying the economic and political conditions required’ (Council 1993: 5). The continued advocacy by DG I-E and the Andriessen cabinet generated the essential dynamism behind this development of policy. Almost immediately after the signing of the EAs, these policy advocates started to work on moving EU policy beyond the association formula. In addition to more substantive proposals, the central element of their advocacy was the formal endorsement of the CEECs’ eventual accession as an objective shared by the EU.11 The extent of opposition to reopening the debate and the constraints that it imposed on a more accommodating policy were reflected in the fact that the Copenhagen declaration itself was the result of an incremental evolution. This process was marked by agreement on key documents that went increasingly towards acknowledging the CEECs’ membership perspective. While each of the documents did not in themselves explicitly acknowledge eastern enlargement as a shared objective, they made it increasingly hard to refuse it ultimately. The Commission’s report on enlargement for the Lisbon European Council in June 1992 acknowledged that while the CEECs were ‘not yet in a position to accept the obligations of membership [they have] political needs which go beyond the possibilities of existing agreements’ (Commission 1992a: 8, emphasis added). In the report for the Edinburgh European Council in December 1992, the Commission proposed that the EU ‘should now confirm that it accepts the goal of eventual membership in the European Union for the [CEECs] when they are able to satisfy the conditions required’ (Commission 1992b: 3). The Edinburgh European Council was too distracted with other business to discuss the Commission report in detail, but stated that at its next meeting it would ‘reach decisions on the various components of the Commission’s report in order to prepare the associate countries for accession to the Union’ (Council 1992: 37). In the run-up to the Copenhagen European Council, the discussion in the Council focused mainly on trade concessions and the institutional framework and no longer seriously challenged the principle of membership. Strategic behaviour and instrumental rationality An important aspect of the success of the policy advocates was that they moved strategically to achieve their goals: they forged strategic alliances and informal cooperation with actors that arguably promoted an evolution of policy towards eastern enlargement for more self-interested reasons. This included support from

130 Ulrich Sedelmeier German policy-makers, but crucially also active coordination with the UK and Danish Council presidencies in the second half of 1992 and the first half of 1993. Cooperation concerned both strategy and substance, including the insertion of policy papers drafted in the Commission as presidency papers into the Council’s discussion.12 Tactical behaviour secured the approval in the Commission of the crucial report for the Edinburgh European Council. Endorsement was obtained not simply through a process of persuasion, but by calling a vote in the College of Commissioners. Many commissioners, among them President Delors, were concerned that bringing enlargement on the agenda was divisive for the member states and thus detrimental for progress on the internal agenda. The necessary majority was secured with the inclusion of requirements in the qualitative criteria for CEEC membership that called both for the stability of democratic institutions in the CEECs and for the EU’s capacity to absorb new members without endangering its own momentum.13 Finally, an element in the policy advocates’ strategy was to persuade the member governments that the prospect of eastern enlargement would increase their material self-interest, or at least not affect it negatively. For example, on the one hand they emphasized that the perspective of membership could counter the risks that the changing political situation in Central and Eastern Europe entailed, such as the threats to stability from ethnic conflicts and the risks to the reforms stemming from the increasing popular dissatisfaction (Commission 1992b, 1993). On the other hand, the Commission supported research into the effects of further integration of the CEECs on specific EU regions and sectors, in order to demonstrate that the expected negative consequences were greatly overstated (Baldwin 1994; Faini and Portes 1995). Regulative norms and identity-related arguments about appropriate behaviour The building of strategic alliances and instrumental strategies that focused on the material cost–benefit calculations of the more reluctant policy-makers thus played an important part in the agreement on the Copenhagen declaration. But this is not the whole story and not sufficient to explain this outcome. A key element of the policy process was that even those EU policy-makers that were concerned about the material consequences of enlargement were sensitive to non-material factors associated with the regulative effects of the EU’s identity towards the CEECs. The policy advocates’ strategy included presenting the member states’ endorsement of the CEECs’ membership perspective as a case of appropriate behaviour by relating it to the EU’s identity towards the CEECs. In the internal debate they repeatedly used such normative arguments and pursued an explicit link in official documents between identity and enlargement as an important objective in its own right. For example, the policy advocates inserted into the Commission’s Lisbon report a language that explicitly expressed the EU’s responsibility towards the CEECs and the need to act accordingly:

Eastern enlargement 131 The integration of [the] new democracies into the European family presents a historic opportunity.. . . The Community has never been a closed club, and cannot now refuse the historic challenge to assume its continental responsibilities and contribute to the development of a political and economic order for the whole of Europe. . .. Enlargement is a challenge which the Community cannot refuse. (Commission 1992a: 1–2, 9) Another example is contained in a draft of the Commission report for Edinburgh, which emphasizes the legitimacy of the CEECs’ objectives and the resulting need for the EU to endorse it: ‘The merits of . . . a [clear declaration by the Community, in which it endorses the object of fully fledged membership of these countries at a later stage] would be very substantial as it would give: satisfaction to the justified aspirations of these countries . . .’ (Commission 1992c: 5; emphasis added). Likewise, the apparent vulnerability of EU policy-makers to the broadly based criticism of the EAs by academics and journalists, as well as CEEC policy-makers, is striking, as it was not linked to any material threats. Academic and media criticism was unanimous in denouncing the absence of a clear membership perspective, the failure to engage in a debate about constructive adaptation of the EU integration model in order to accommodate the CEECs in the long run,14 and the limitations of the trade concessions.15 CEEC policy-makers criticized the EAs both in individual capacity16 and collectively in two so-called Visegrád memoranda of September 1992 and June 1993, issued just before the respective European Councils with the active encouragement from the policy advocates in the Commission. This criticism not only focused on the failure of the EU to act decisively in its own security and economic interest. It had a strong normative dimension which emphasized the failure of the EU to match its rhetoric with appropriate behaviour, and to live up to the role it had declared for itself and to the expectations it had raised. Crucially, although it was not linked to material sanctions and was not made by actors that had the material capabilities to sanction non-fulfilment of their demands, such criticism and the strong normative language of the policy advocates had a clear effect on member governments and the more reluctant parts of the Commission. For example, the French government strongly perceived the need to take a much more positive approach in order to rectify the impression that France was a main obstructer of a more accommodating policy.17 The Spanish government felt that its tough stance on trade issues was misinterpreted as general hostility to the eventual accession of the CEECs.18 After a visit by the Polish prime minister, Suchocka, to Madrid, Prime Minister Gonzáles instructed the foreign ministry to support the Commission’s proposals.19 Crucially, after the Commission formally put the proposal to endorse the membership perspective on the table, none of the delegations in the Council disputed it openly.20 In the end, reservations existed mainly among the Belgian and Luxembourg governments, which had strong concerns about the possible dilution

132 Ulrich Sedelmeier of future integration, but did not voice them formally.21 The agreement on the financial perspective and the solution to the Maastricht ratification crisis at the Edinburgh European Council had greatly reduced the arguments that could be presented as legitimate against turning to the question of enlargement. In sum, the way in which the Copenhagen European Council’s formal endorsement of the CEECs’ membership perspective as a mutual policy goal was achieved suggests that EU policy did not merely evolve within the parameters of material cost–benefit calculations of the main actors. The endorsement of the Copenhagen declaration might have been facilitated by the consideration that this statement did not entail any formally binding obligations on the EU and thus allowed for later backtracking. But although it could lead to the debate that the majority of member governments and parts of the Commission had wanted to avoid, EU policymakers responded to the criticism of their apparent failure to act in accordance to their professed role rather than taking the stance that the EAs were a take-it-orleave-it offer. The regulative effect of identity created the necessary room for manoeuvre for the policy advocates to press for the formal endorsement of the CEECs’ eventual accession as a mutual goal. EU identity limited the policy options that were acceptable as appropriate behaviour. It limited the grounds for legitimate opposition by excluding argument about material self-interests. Even policymakers in the member governments and the Commission that feared the material consequences of eastern enlargement felt inhibited to veto this step with reference to their particular self-interest. The regulative effect of EU identity towards the CEECs is underlined in the importance of two non-material factors for the success of the policy advocates, namely the use of identity-related arguments in official statements and internal discussions and the normative criticism of the EAs from both the academic community and the CEECs. However, endorsement of the policy advocates’ proposal was far from automatic and relied heavily on their strategic behaviour. Even in these instances, in which action seemed to follow more clearly a logic of appropriate behaviour, it also involved instrumental rationality on the part of the policy advocates who in part used normative arguments strategically to induce compliance. Furthermore, although compliance was not induced by material sanctions and constraints, it did result in part from a strategic calculation of consequences. Crucially, however, the utility function of these actors included the reputational and social costs entailed by failing to conform with the regulative norms implied in the EU’s role towards the CEECs.

The expansive logic of the formal acknowledgement of the CEECs’ eventual membership The significance of the Copenhagen declaration The acknowledgement of eventual CEEC accession as a shared objective presented a significant achievement, considering the strong initial opposition to such a

Eastern enlargement 133 move. However, at the time the assessments of the substance of the Copenhagen declaration were rather ambiguous. The declaration did not involve any legally enforceable commitment. The absence of a timetable, the qualitative formulation of the conditions for membership,22 and in particular the provision that ‘the Union’s capacity to absorb new members, while maintaining the momentum of European integration, is also an important consideration’ (Council 1993: 5) – which was entirely beyond the CEECs control – provided ample scope for backtracking. The Copenhagen declaration might thus be interpreted as a limited, merely rhetorical response to the CEECs’ criticism of the EAs. The limitations of the Copenhagen declaration are on the one hand an expression of the constraints that strategic bargaining between material interestmaximizing actors placed on a more accommodating policy. On the other hand, both how Copenhagen was achieved and its subsequent significance suggest that EU policy did not evolve merely within the parameters of material cost–benefit calculations of the main actors. The benefit of hindsight allows one to establish that Copenhagen was indeed highly significant. All subsequent EU documents on policy towards the CEECs start by quoting the Copenhagen declaration as the key expression of the EU’s commitment to eastern enlargement. Crucially, it had a profound substantive impact on the subsequent evolution of policy and provided a starting-point for an expansive logic that made it increasingly difficult to block initiatives aimed at developing policy further. Despite the strong reluctance among EU policy-makers to face up to the consequences of eastern enlargement, it paved the way to open accession negotiations with the CEECs, which was ‘probably the most significant of the different stages of the accession process . . . because opening them implies a willingness to conclude them’ (Avery and Cameron 1998: 27). Incrementalism, regulative norms, commitment and credibility Central to this evolution were successive agreements on limited, incremental developments of policy. The Essen European Council in December 1994 endorsed the Commission’s proposal of a so-called pre-accession strategy to prepare the CEECs for accession. Its economic core was a Commission White Paper to prepare the CEECs for their participation in the internal market. Finally, the Madrid European Council in December 1995 approved an indicative date for the start of accession negotiations – six months after the conclusion of the IGC starting in 1996.23 This incrementalism was in part a result of the constraints on policy; in part it was a deliberate strategy of the policy advocates.24 As with the Copenhagen declaration, these incremental steps focused on apparently limited measures and questions of principle, which to refuse would have been contrary to the EU’s identity towards the CEECs. For example, having accepted the general principle of the CEECs’ eventual accession, it was difficult to refuse the argument that the EU should present the CEECs with a workable road map that indicated the path from the general principle to actual accession.25 In turn, having agreed to a work programme for the CEECs’ accession preparations, it was hard to argue against an

134 Ulrich Sedelmeier indicative date for the start of accession negotiations, if the CEECs had by then made significant progress. A crucial factor that reinforced this dynamic was that the Copenhagen declaration presented a certain formalization of the EU’s commitment to eventual membership. Agreement to these initiatives could now be clearly presented as a test for the credibility of the EU. In this sense, when the Essen European Council endorsed the pre-accession strategy, it affirmed that ‘[the EU], in deciding this strategy, reemphasizes the commitment of the Union to the accession of the associated countries’ (Council 1994: 25). Apparent safeguards and decreasing grounds for legitimate opposition to enlargement In addition, these measures still contained apparent safety valves that seemed to keep them limited and to provide scope to stop developments at a later stage. The Copenhagen declaration was only a declaration of principle and set conditions for membership, including the ominous provision of the EU’s own dynamism. The choice of regulatory alignment as the economic core of the pre-accession strategy26 could be seen as a safeguard against politically motivated early accessions. By making the regulatory accession requirements more explicit, it seemed to make the conditionality harder.27 Finally, the start of accession negotiations was made conditional on successful institutional reform at the 1996–7 IGC (Council 1995: 23). However, despite these safeguards, each of those measures had the effect of reducing further the grounds of legitimate opposition to enlargement. As the EU’s collective identity proscribed selfish opposition to enlargement, it restricted legitimate arguments to those that focused on the common interest of an enlarged EU. One such common interest of all participants is the proper functioning of the internal market. Doubts about the CEECs’ ability to implement the EU’s regulatory regimes were thus a legitimate argument against enlargement. However, since the pre-accession strategy focused precisely on the preparation of the CEECs for the internal market, such doubts could no longer serve as a general pretext. Another common interest of current and future members is the sustainability of the EU’s dynamism after enlargement. Initially, member governments could legitimately decline to address the general question of enlargement before the ratification of the Maastricht Treaty, which was supposed to provide the necessary deepening. But the solution to the Danish ratification problem at the Edinburgh European Council made it hard to refuse to take a general position on enlargement. A further aspect of the EU’s dynamism is the effectiveness of decision-making in an enlarged Union. However, since the Madrid European Council made the start of accession negotiations conditional on institutional reform at the 1996–7 IGC, it was difficult to refuse the principle. Furthermore, despite the insufficient results of the IGC, the logic of having agreed to an indicative starting date was such that the member governments decided nonetheless to open accession negotiations in March 1998, while agreeing on another IGC to deal with these issues. To be sure, some member governments entered into the minutes of the Amsterdam European

Eastern enlargement 135 Council their intent not to endorse any accession if the reforms should not be agreed (Financial Times, 16 September 1997).

Conclusions This chapter’s argument has both empirical implications for the EU’s ability to respond strategically to a common risk and theoretical implications for the broader debate in IR theory about the relationship between rationality and norm-conform behaviour. Enlargement, risk and rationality The central argument of this chapter is that the EU’s decision to open accession negotiations was not the result of a strategic choice in response to the potential risks of instability in the CEECs. The ability to agree on enlargement despite the veto power of negatively affected member governments is thus not a reflection of the EU’s capacity as a collective strategic actor in international politics. Rather, the EU’s decision to pursue accession negotiations can be attributed largely to the collective identity that it created for itself and the regulative norms such an identity entailed. First, although the EU was able to agree on enlargement, it could not agree more than minimal reforms to prepare itself for enlargement. Thus, while it was able to avoid the risks associated with passivity vis-à-vis the changes in the CEECs, its activism generates its own long-term risks for the sustainability of the integration project. Second, the process through which enlargement was endorsed was very different from strategic decision-making driven by a common security rationale. The policy process was far too incremental; every step towards further developments was strongly contested; and at virtually no point was there a thorough debate about the EU’s interests and appropriate strategies for an enlarged EU. It is thus difficult to see in the enlargement decision a rational collective decision by enlightened member governments that prioritize long-term interest, or engage in collective problem-solving and burden sharing out of solidarity with those member states that are most directly affected by potential instability in the CEECs. Neither was it the case that member states with particular interest in enlargement coerced the others into a decision that might be detrimental to the system as a whole. This chapter’s analysis suggests that, while member governments with more obvious material interests in enlargement provided significant support for the policy advocates, they were not the source of the crucial policy initiatives analysed here. Moreover, the chapter suggests that looking at EU policy primarily as case of foreign policy is seriously misleading. By overstating the importance of the security rationale, it distracts from the distinctiveness of the relationship with the CEECs. It ignores the fact that EU policy towards the CEECs is as much about the definition and enactment of its own identity as about a stabilization of its ‘new abroad’. To understand the decision to enlarge requires one to depart from materialist

136 Ulrich Sedelmeier assumptions of rationality. Identification with, or the constitutive effects of, the discursively constructed role of the EU towards the CEECs led a group of policy advocates inside the Commission continuously to promote moves towards enlargement. This does not mean that calculations of the material costs and benefits of enlargement were not an important part of the story. For example, the perception of risks from possible instability in the CEECs was an important factor in generating support for enlargement, particularly from the German government. Conversely, the perception of the risks that enlargement itself could entail for future integration in the EU was an important consideration that caused reluctance in the Belgian and Luxembourg governments, for example. The maximization of material interests imposed constraints on policy, which meant that it could evolve only incrementally. But these could not stop the process altogether. Albeit incrementally, policy did evolve, and these successive steps made the enlargement process increasingly irreversible. The necessary scope for such an evolution was created by regulative constraints on behaviour. The decisions at each stage were presented as questions of principle. Opposition with open reference to narrow selfinterests would have entailed conflicts with regulative norms associated with the EU’s collective identity towards the CEECs. To be sure, agreement at each of these stages included apparent safeguards which seemed to maintain the possibility of blocking further evolution of policy at a later stage. To the extent that policy-makers subsequently felt inhibited about insisting on a strict interpretation of these safeguards, there might have been an element of unintended consequences that facilitated a certain path-dependence. The cumulative logic of policy evolution, and the increasing formalization of an EU commitment to enlargement, further limited the grounds for legitimate opposition to enlargement and raised the reputational costs of a veto. However, as the regulative norm was primarily prohibitive, the consensus it created was primarily a negative consensus, namely ‘not to block enlargement’.28 The EU’s identity was not internalized widely enough to forge a positive consensus on enlargement as well as on the necessary reforms. The prospect of continued muddling-through suggests a pessimistic scenario in which enlargement might lead the EU towards the ‘risk’ end of the continuum identified by Cowles and Smith (2000). A more optimistic interpretation is that the inevitability of enlargement now condemns policy-makers to agree to the necessary reforms. EU policy-makers might thus have pushed themselves towards the reform and revival scenario. Still, in this case, the impetus for reform and revival did not come primarily from a collective strategic decision, but to a large extent precisely from the obstacles that the EU’s role towards the CEECs imposes on a ‘rational’ defence of individual member states’ narrower material self-interests. Rationality and norm-compliance These apparent shortcomings of rationalist approaches to eastern enlargement highlight the important contribution that more sociological approaches in IR can

Eastern enlargement 137 make. However, EU policy towards the CEECs also presents a key case to support the more recent move in the theoretical debate away from either/or arguments between rationalism and constructivism. Instead, it underlines the need to focus on, and to understand better, the link between rationality and norm-conform behaviour. The debate has already clarified that to accept interests as endogenous does not exclude strategic behaviour to achieve these interests. But eastern enlargement entails cases that are not easily captured by the elegant solution of such a ‘division of labour’ between rationalists and constructivists (Katzenstein et al. 1998). It thus identifies two related key areas where further conceptual and methodological research is necessary. One is the strategic use of normative arguments and what it tells us about whether the actors that profess these norms use them instrumentally or genuinely. The other is how the strategic use of normative arguments works. The regulative effect of norms generates behavioural constraints and induces norm-compliance, although there is neither a link to material sanctions nor a constitutive effect of actors’ interest definition.

Notes 1 This chapter was originally published in M. G. Cowles and M. Smith (eds) (2000) The State of the European Union, vol. 5: Risk, Reform, Resistance and Revival. Oxford: Oxford University Press, 164–85. 2 On the Luxembourg European Council, see, e.g., Friis (1998); on the eventual outcome of policy reform at the Berlin European Council, see Laffan and Shackelton (2000), Rieger (2000), Allen (2000); on institutional reform at the 1996–7 IGC, see, e.g., Sedelmeier (2000). 3 For a similar point, see Schimmelfennig (1999, ch. 7 this volume). 4 In a similar vein, Schimmelfenning (1999, ch. 7 this volume) emphasizes that arguments relating to institutional norms strengthened the bargaining power of actors pressing for eastern enlargement. He maintains, however, that such actors only use these arguments instrumentally, i.e., they have not internalized these norms. 5 By contrast, it is not immediately obvious which evaluative standards it implies for an assessment of the norm-conformity or ‘appropriateness’ of specific EU practices on issues of policy substance, such as to liberalize trade or to establish concrete conditions for accession. These are outside this chapter’s narrower focus. But any account that analyses the effects of identity on policy towards the CEECs cannot be complete unless it captures the effects on these issues as well (see Sedelmeier 1998). 6 Interviews, Commissioner’s cabinet, 2 February 1995; Commission, DG I, 23 October 1995, 24 October 1995, 27 October 1995. 7 Interviews, Commission, DG I, 23 October 1995; 24 October 1995. 8 For further detail on the negotiations, see, e.g., Sedelmeier and Wallace (1996); Niblett (1995); Friis (1997); Torreblanca (1997); Sedelmeier (1998). 9 Interview, Commission, DG I, 23 October 1995. 10 In addition to this declaration, the European Council endorsed a unilateral acceleration of trade liberalization and closer institutional links between the EU and the CEECs. These are not, however, the subject of this chapter. 11 Interviews, Commission, DG I, 24 October 1995. 12 Interviews, UK Permanent Representation, 9 July 1993; Commission, DG I, 24 October 1995. 13 Interview in a Commissioner’s cabinet, 15 December 1995.

138 Ulrich Sedelmeier 14 See, e.g., Bonvicini et al. (1991); Wallace (1991); Reinicke (1992); Kramer (1993); Smith and Wallace (1994). 15 See, e.g., Baldwin et al. (1992); Winters (1992); Hindley (1993); Messerlin (1993); Rollo and Smith (1993). 16 See, e.g., Suchocka (1992); Saryusz-Wolski (1994). 17 Interviews, French Foreign Ministry, 3 July 1996 and 10 July 1996. 18 Interviews, Spanish Foreign Ministry, 18 June 1996 and 21 June 1996. 19 Interview, Spanish Permanent Representation, 3 February 1995. 20 Interview, UK Permanent Representation, 9 July 1993. 21 Interview, Commission DG I, 24 October 1995. 22 The declaration mentions the following conditions: ●

●

●

stability of institutions guaranteeing democracy, the rule of law, human rights and respect for and protection of minorities; existence of a functioning market economy, and capacity to cope with competitive pressure and market forces within the Union; ability to take on the obligations of membership, including adherence to the aims of political, economic and monetary union.

23 For further detail on this evolution, see, e.g., Sedelmeier and Wallace (1996); Mayhew (1998); Grabbe and Hughes (1998); Sedelmeier (1998). 24 Interview, Commission DG I, 24 October 1995. 25 Interviews, Commission DG I, 24 October 1995; and in a Commissioner’s cabinet, 2 February 1995. 26 For a discussion of a pre-accession strategy based on regulatory alignment, see Smith et al. (1996); for the follow-up in the accession partnerships, see Grabbe (1999). 27 Interview, French Prime Minister’s Office, 10 July 1996; French Foreign Ministry, 3 July 1996. 28 Interview, German Foreign Ministry, 13 December 1995.

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140 Ulrich Sedelmeier Kramer, H. (1993) ‘The European Community’s Response to the “New Eastern Europe”’, Journal of Common Market Studies, 31: 213–44. Laffan, B., and Shackelton, M. (2000) ‘The Budget’, in H. Wallace and W. Wallace (eds) Policy-Making in the European Union. 4th edn, Oxford: Oxford University Press, 211–41. Lumsdaine, D. H. (1993) Moral Vision in International Politics: The Foreign Aid Regime 1949– 1989. Princeton, NJ: Princeton University Press. March, J. G., and Olsen, J. P. (1998) ‘The Institutional Dynamics of International Political Orders’, International Organization, 52: 943–69. Mayhew, A. (1998) Recreating Europe: The European Union’s Policy towards Central and Eastern Europe. Cambridge: Cambridge University Press. Messerlin, P. A. (1993) ‘The EC and Central Europe: The Missed Rendez-Vous of 1992?’, Economics of Transition, 1: 89–109. Niblett, R. C. H. (1995) ‘The European Community and the Central European Three, 1989–92: A Study of the Community as an International Actor’. PhD dissertation, Oxford University. Price, R., and Tannenwald, N. (1996) ‘Norms and Deterrence: The Nuclear and Chemical Weapons Taboos’, in P. J. Katzenstein (ed.), The Culture of National Security: Norms and Identity in World Politics. New York: Columbia University Press, 114–52. Reinicke, W. (1992) Building a New Europe: The Challenge of System Transformation and Systemic Reform. Washington, DC: Brookings Institution. Rieger, E. (2000) ‘The Common Agricultural Policy’, in H. Wallace and W. Wallace (eds), Policy-Making in the European Union. 4th edn, Oxford: Oxford University Press, 179–210. Risse-Kappen, T. (1994) ‘Ideas do not Float Freely: Transnational Coalitions, Domestic Structures, and the End of the Cold War’, International Organization, 48: 185–214. Risse-Kappen, T. (1995) Cooperation Among Democracies: The European Influence on U.S. Foreign Policy. Princeton, NJ: Princeton University Press. Rollo, J., and Smith, A. (1993) ‘The Political Economy of Eastern European Trade with the European Community: Why so Sensitive?’, Economic Policy, 16: 139–81. Saryusz-Wolski, J. (1994) ‘The Reintegration of the “Old Continent”: Avoiding the Costs of “Half-Europe’’’, in S. Bulmer and A. Scott (eds), Economic and Political Integration in Europe. Oxford: Blackwell, 19–28. Scharpf, F. W. (1988) ‘The Joint-Decision Trap: Lessons from German Federalism and European Integration’, Public Administration, 66: 239–78. Schimmelfennig, F. (1998) ‘NATO, the EU, and Central and Eastern Europe: Theoretical Perspectives and Empirical Findings’. Paper presented at the 3rd Pan-European International Relations/ISA Conference, Vienna. Schimmelfennig, F. (1999) ‘The Double Puzzle of Enlargement: Liberal Norms, Rhetorical Action, and the Decision to Enlarge to the East’, ARENA Working Paper, 15/1999. Sedelmeier, U. (1998) ‘The European Union’s Association Policy towards the Countries of Central and Eastern Europe: Collective EU Identity and Policy Paradigms in a Composite Policy’. PhD dissertation, University of Sussex. Sedelmeier, U. (2000) ‘East of Amsterdam: The Implications of the Amsterdam Treaty for Eastern Enlargement’, in K. Neunreither and A. Wiener (eds), European Integration After Amsterdam. Oxford: Oxford University Press, 218–37. Sedelmeier, U., and Wallace, H. (1996) ‘Policies towards Central and Eastern Europe’, in H. Wallace and W. Wallace (eds), Policy-Making in the European Union. 3rd edn, Oxford: Oxford University Press, 353–87. Smith, A., and Wallace, H. (1994) ‘The European Union: Towards a Policy for Europe?’, International Affairs, 70: 429–44.

Eastern enlargement 141 Smith, A., et al. (1996) ‘The European Union and Central and Eastern Europe: Preaccession Strategies’, Sussex European Institute Working Paper, no. 15. Smith, K. E. (1998) The Making of EU Foreign Policy. The Case of Central and Eastern Europe. London: Macmillan. Suchocka, H. (1992) ‘Le passage d’un système à l’autre doit être moins brutal’, Le Monde, 17 September. Torreblanca, J. I. (1997) ‘The European Community and Central Europe (1989–1993) Foreign Policy and Decision-Making’. PhD dissertation, Instituto Juan March, Madrid. Wallace, H. (1991) ‘The Europe that Came in from the Cold’, International Affairs, 67: 647–63. Wallace, H. (1996) ‘Politics and Policy in the EU: The Challenge of Governance’, in H. Wallace and W. Wallace (eds), Policy-Making in the European Union. 3rd edn, Oxford: Oxford University Press, 3–36. Winters, L. A. (1992) ‘The Europe Agreements: With a Little Help from Our Friends’, CEPR Occasional Paper, no. 11, 17–33. Zielonka, J. (1998) Paradoxes of European Foreign Policy. Boston, MA: Kluwer.

7

The community trap Liberal norms, rhetorical action and the eastern enlargement of the European Union1 Frank Schimmelfennig

Introduction In this article, I analyse the decision of the European Union (EU) to expand to Central and Eastern Europe.2 More precisely, I ask why the EU opened the accession process with the ten associated Central and Eastern European countries (CEECs) in March 1998 and started concrete accession negotiations with (only) five of them (the Czech Republic, Estonia, Hungary, Poland and Slovenia).3 The analysis is embedded in the current ‘great debate’ between rationalist and sociological or constructivist approaches to the study of international institutions in the international relations discipline (see, e.g., Katzenstein et al. 1999). I start my search for an explanation with (liberal) intergovernmentalism, the most prominent and promising rationalist account of the major turning points in the history of European integration. It accounts plausibly for most of the enlargement preferences of the member states and explains why the association of CEECs to the EC was the initial outcome of the bargaining process among them. It fails, however, to account for the Community’s decision to go beyond association and offer the CEECs full membership. This puzzle is solved in a sociological perspective in which enlargement is understood as the expansion of international community. If the EU is conceived as the organization of the European liberal community of states, its decision to open accession negotiations with five CEECs can be explained as the inclusion of those countries that have come to share its liberal values and norms. The problem, then, is to explain how a rational outcome (association) based on egoistic preferences and relative bargaining power was turned into a normative one (enlargement). I propose ‘rhetorical action’ as the intervening mechanism. Rhetorical action is the strategic use of norm-based arguments. In an ‘institutional environment’ like the EU, political actors are concerned about their reputation as members and about the legitimacy of their preferences and behaviour. Actors who can justify their interests on the grounds of the community’s standard of legitimacy are therefore able to shame their opponents into norm-conforming behaviour and to modify the collective outcome that would have resulted from constellations of interests and power alone.

The community trap 143 How did rhetorical action intervene in the process of eastern enlargement? Since its beginnings, European integration has been legitimated by the ideology of a pan-European community of liberal democratic states. This ideology is reflected in the membership rules of the European Union. As the CEECs and their supporters in the Community did not possess sufficient material bargaining power in order to attain enlargement, they based their claims on the constitutive values and norms of the EU and exposed inconsistencies between the Community’s standard of legitimacy, its past rhetoric, and its past treatment of applicant states, on the one hand, and its policy toward the CEECs, on the other. As a result, the opponents of a firm commitment to eastern enlargement found themselves rhetorically entrapped. They could neither openly oppose nor threaten to veto enlargement without damaging their credibility as Community members. With the support of the Commission’s proposal power and the Council presidencies of pro-enlargement member states, the initial objections of the Community therefore made way to a principled commitment to eastern enlargement. This commitment gained in strength until the accession negotiations were opened and was shielded effectively by its undisputed legitimacy from the ‘fallout’ of the tough bargaining on the institutional and policy reforms that eastern enlargement requires.

A puzzle for rationalist intergovernmentalism In The Choice for Europe and earlier works, Andrew Moravcsik adapted the basic assumptions and theoretical propositions of rationalist institutionalism to the study of European integration (1993, 1998). His liberal intergovernmentalism claims to explain the ‘major turning points’ in the history of European integration more convincingly than alternative theories. Although Moravcsik’s case studies deal almost exclusively with issues of ‘deepening’, the successive ‘widenings’ of the Community also qualify as ‘big decisions’ in European integration and lend themselves to intergovernmentalist analysis.4 Moravcsik suggests a tripartite analysis of integration decisions: the formation of state preferences, the outcomes of interstate bargaining, and the choice of international institutions. It is his central claim that state preferences and international outcomes emerge from distributional conflict and reflect patterns of bargaining power at the domestic and the international level: whereas state preferences in European integration are determined chiefly by international interdependence, opportunities for international economic exchange, and the dominant economic interests in national society, substantive integration outcomes result from hard bargaining among states (Moravcsik 1998: 3–9, 26). By contrast, I seek to show that, whereas the enlargement preferences of the EU member states and the initial bargaining process largely conform to rationalist expectations, the international outcome, that is, the decision to enlarge the EU to Central and Eastern Europe, cannot be explained as the result of egoistic cost-benefit calculations and patterns of state preferences and power.

144 Frank Schimmelfennig State preferences The decision to expand the EU to the East had two principal dimensions on which member-state preferences diverged significantly. The first question was whether (and when) the EU should commit itself to eastern enlargement in general. Simply stated, one group of member governments (the ‘drivers’) advocated an early and firm commitment to eastern enlargement, whereas other member governments (the ‘brakemen’) were reticent and tried to put off the decision. The second issue concerned the selection of CEECs for accession negotiations. Here, one group of countries pushed for a limited (first) round of enlargement focusing on the Central European states; others favoured an inclusive approach of ‘equal treatment’ for all associated CEECs. Table 7.1 gives an overview of how these preferences were distributed among the member states.5 The distribution of enlargement preferences largely mirrors the geographical position of the member states. Except for Greece and Italy, the countries bordering on Central and Eastern Europe were the ‘drivers’ of enlargement; except for Britain, the more remote countries were the ‘brakemen’. The countries of the ‘central region’ of the EU preferred a limited (first round of) enlargement, whereas the southern and northern countries, except Finland, favoured a more inclusive approach. The member states’ geographical position vis-à-vis Central and Eastern Europe can be understood as a proxy variable for ‘the imperatives induced by interdependence and, in particular, the [. . .] exogenous increase in opportunities for cross-border trade and capital movements’ that should determine national preferences (Moravcsik 1998: 26). Following the hypothesis that, all else being equal, international interdependence increases with geographical proximity, member states on the eastern border of the EU are more sensitive to developments in Central and Eastern Europe than the more remote member states.6 Crises and wars, as well as economic and ecological deterioration, in the region affect them more immediately and more strongly. Enlargement can be seen as an instrument to stabilize Central and Eastern Europe, to control the negative externalities of political and economic transformation in the East, and to expand the borders of the EU zone of peace and prosperity. For all of these reasons, EU border states have a strong interest in enlargement. Second, geographical proximity creates opportunities for economic gains from trade and investment, for instance, by reducing the costs of transport and communication. Member states close to Central and Eastern Europe therefore stand to gain more from economic exchange with the East than more distant states. This is Table 7.1 Member-state preferences on enlargement

Drivers Brakemen

Limited enlargement

Inclusive enlargement

Austria, Finland, Germany Belgium, Luxembourg, Netherlands

Britain, Denmark, Sweden France, Greece, Ireland, Italy, Portugal, Spain

The community trap 145 roughly reflected in the member states’ shares of EU trade with the CEECs as compared to their shares of EU economic output (table 7.2). All member states with a disproportionately high share in exports (Austria, Germany, Finland) are border states; all member states with a disproportionately low share (Britain, Ireland, France, Portugal, Spain) are not. We can further assume that those countries that are closest to and most highly involved in the CEE economies will also gain most from the membership of CEECs (e.g., through the further opening of markets and the better protection of their economic assets in the region). Finally, in light of this argument, member states should be most interested in the membership of those countries with which they share a border or are in close proximity. This explains why member states in the centre of the EU were content with the Commission’s proposal to limit accession talks to the Central European candidates (plus Estonia) whereas the others wanted the talks to be more inclusive. It is also small wonder that France, Greece and Italy, all southern states, gave their special support to Bulgaria and Romania, southeastern candidates, whereas Denmark and Sweden, northern states, most strongly advocated the cause of the Baltic states, the northernmost of the CEE applicants. The divergent state preferences are not fully explained, however, by different levels of gains from the control of negative and the exploitation of positive interdependence with Central and Eastern Europe through enlargement. In this case, we would see only different degrees of enthusiasm for, but no opposition to, the EU’s commitment to eastern enlargement. In order to explain why most member states, including the border countries of Italy and Greece, acted as ‘brakemen’ in the enlargement process, potential losses from enlargement must be included in the analysis. The unequal distribution of these losses results mainly from differences in socio-economic structure among the EU member countries. Eastern enlargement threatens to create particularly high costs for the poorer, less highly developed and more agricultural members. These costs result from Table 7.2 Member-state shares of EU exports to CEECs and EU economic output Export share Output share Disproportionately high share in exports Germany 41.2% 27.4% Austria 8.8% 2.7% Finland 3.1% 1.5% Roughly proportional share in exports Italy 16.1% 14.1% Netherlands 4.5% 4.6% Belgium/Lux. 3.8% 3.3% Sweden 3.1% 2.9%

Export share Output share Denmark 2.0% 2.0% Greece 1.4% 1.4% Disproportionately low share in exports France 7.4% 17.8% Britain 5.6% 13.4% Spain 2.0% 6.8% Ireland 0.6% 0.8% Portugal 0.2% 1.3%

Note A disproportionate share of trade is one that is 25 per cent higher or lower in percentage points than a country’s share of the EU’s economic output (my calculation based on Eurostat data for GDP at market prices in 1996). For the shares in trade, see ‘EU Trade in Goods with CEECs’, Weekly Europe Selected Statistics, 1047 (23 March 1998); data are for 1996.

146 Frank Schimmelfennig trade and budgetary competition. First, the ‘less developed’ member states are likely to be more adversely affected by trade integration with the East because they specialize in the same traditional and resource-intensive industries (such as agriculture, textile and leather, as well as metalworking) as the CEE economies (Hagen 1996: 6–7). And though rich border countries will in turn face migration pressures, for which there is a high potential due to geographical proximity, high unemployment in the East and high wage differentials (Weise et al. 1997: 26), in the history of the EU the movement of labour has been more strongly restricted and much lower than the movement of goods and capital. Second, all CEE members will become structural net recipients. For the foreseeable future, EU transfers to these countries will outweigh by far their contributions to the Community budget. Moreover, eastern enlargement will seriously affect the Common Agricultural Policy (CAP) and the structural policies which together comprise around 80 per cent of the Community budget. According to Stefan Tangermann, the CEE candidates produce only 3 per cent of the EU GNP but possess 44 per cent of the EU productive land and attain 30 per cent of the EU agricultural production. He expects that agricultural production will rather increase than diminish as a result of economic recovery, and that participation in the CAP will give the CEECs an additional incentive for agricultural production (1995: 485). Furthermore, due to their low levels of wealth and income, the CEECs will benefit greatly from the structural funds. If these policies remained unchanged, the community budget would have to increase by 20 per cent to twothirds of its current volume depending on the scenario and the calculation (see, e.g., Baldwin 1994: 161–79; Baldwin et al. 1997: 152–66; Weise et al. 1997: 258). It was therefore agreed that a reform of the CAP and the structural policies would be an indispensable precondition of enlargement. Any reform, however, would inevitably lead to transfer reductions for EU farmers as well as to fewer regions eligible for financial support and would thus disproportionately affect the main beneficiaries of the budget among the old members. Correspondingly, all of them (Spain, Greece, Portugal and Ireland) were among the brakemen and later challenged the Commission’s opinion that enlargement could be funded on the basis of the current budget limit.7 A final factor that probably affected the enlargement preferences of the member states belongs to the category of ‘geopolitical interests’ (Moravcsik 1998: 26–9). Proximity and (asymmetrical) interdependence give rise not only to economic gains but also to influence. The more remote member states therefore had reason to fear that future CEE members would side with Germany and other border states in EU decision-making and thereby cause a power shift in favour of Germany and the northeastern countries in general. This is the standard interpretation of French reticence towards enlargement (see, e.g., Grabbe and Hughes 1998: 5; Holvêque 1998: 515). Thus, the northern border countries not only expected to reap the highest economic and security gains from enlargement. They were also little affected by trade and budget competition with future CEE members. By contrast, that Greece and Italy were among the brakemen despite their geographical location can be

The community trap 147 attributed partly to their specialization in traditional industries and, in the case of Greece, to concerns over budget competition. In addition, both countries were preoccupied more strongly with Mediterranean security than with the CEE region. Italy feared that the EU’s focus on eastern enlargement would divert its attention and funding from the Mediterranean region (Bardi 1996: 163–5), and Greece concentrated its efforts on the admission of Cyprus to the accession negotiations. The disincentives were highest for those states that could not expect any significant economic and security gains from enlargement but were likely to incur major costs from trade and budget competition (Portugal, Spain and Ireland) or from a ‘geopolitical shift’ of the Community (France). The Benelux countries fall somewhere in-between – in economic terms, they had neither much to lose nor much to gain from enlargement. Only the British preferences obviously deviate from this structural pattern, since Central and Eastern Europe is neither geographically close nor economically important to Britain. The early and strong British commitment to enlargement is generally attributed to the ‘Europhobia’ of the Conservative governments. It appears to have been based on the calculation that an extensive ‘widening’ of the Community would prevent its further ‘deepening’ and even dilute the achieved level of integration (Grabbe and Hughes 1998: 5; Hayward 1996: 148). In sum, no single factor explains the EU member states’ enlargement preferences. The economic conditions emphasized by liberal intergovernmentalism go a long way towards giving a plausible account of state preferences, but in some important cases (Italy, Britain, and probably France) geopolitical or ideological interests seem to have been decisive. At any rate, the divergent state preferences on enlargement are best understood as individual and self-centred. As rationalism would lead us to expect, they reflected egoistic calculations of, and conflict about, national welfare and security benefits or national attitudes to integration, not a collective ‘Community interest’. Intergovernmental bargaining In liberal intergovernmentalism, the constellation of national preferences is the outcome of the first part and the starting-point for the second part of the explanation of European integration. In the case of eastern enlargement, the member states were not only divided among themselves but, in the EC-12, the ‘drivers’ were in a clear minority, with only Britain, Denmark and Germany advocating an early and firm commitment of the EU to enlargement and a speedy preparation of the Community and the candidates for this event. According to intergovernmentalism, this situation did not necessarily block a decision to enlarge because intergovernmental bargaining intervenes between the constellation of national preferences and the international policy outcome (Moravcsik 1998: 60–66). There are basically two ways in which a state that does not reap net benefits from enlargement can be made to agree to the admission of a new member. On the one hand, enlargement will be possible if the losers are fully compensated through side-payments and other concessions by the winners, and if these concessions do

148 Frank Schimmelfennig not exceed the winners’ benefits from enlargement. On the other hand, the losers will consent to enlargement if the winners are able to threaten them credibly with exclusion and if the losses of exclusion exceed the losses of enlargement. I argue, however, that neither the CEECs nor the ‘drivers’ among the EU members possessed sufficient bargaining power to change the balance of costs and benefits for the ‘brakemen’ in favour of eastern enlargement. Interdependence between East and West is highly asymmetrical in favour of the EU. For example, trade with the EU accounts for approximately 40 to 65 per cent of the total trade of most CEECs,8 whereas trade with Central and Eastern Europe does not amount to more than 5 per cent, on average, of the total external trade of EU members. Capital and foreign aid flow almost entirely from West to East. The CEECs therefore did not possess the bargaining power to make the reluctant majority of member states accept their bid to join the EU. On the one hand, the CEECs could not credibly threaten to close their markets to the West and thus deprive the EU of the benefits of trade integration. By shielding their economies from integration with the EU, the CEECs would have harmed themselves more than the Community. On the other hand, the governments of Central and Eastern Europe could not argue convincingly that, without the prospect of EU membership, their countries would become politically and economically unstable, threatening Western European security and welfare with illegal migration and organized crime (see, e.g., Kawecka-Wyrzykowska 1996: 97; Saryusz-Wolski 1994: 24–5). First, ‘selfinflicted chaos’ is no credible bargaining strategy, because it is in the self-interest of the reform-minded governments of Central and Eastern Europe to develop stable political and economic systems. Second, given its resources, why would the EU not be able to defend itself as efficiently against the spillover of Eastern European instability as it has done so far? This analysis is corroborated by EU enlargement policy: those CEECs that do not achieve internal stability on their own and export instability beyond their borders are the last in line for accession. The EU’s commitment to enlargement could still have resulted from the superior bargaining power of the ‘drivers’ among the EU members. This was not the case, however, even though two of the most powerful members – Britain and Germany – were among the ‘drivers’. On the one hand, they could not threaten the ‘brakemen’ credibly with any attractive unilateral or coalitional alternatives (such as a Northern–Central European integration) because their preponderant interest is in EU integration. Even for Germany, clearly the greatest beneficiary of integration with the East, the economic (let alone political) stakes in the East are small compared to those in the EU.9 This was a ‘suasion game’, in game theory parlance, in which the CEECs (and the pro-enlargement member states) had a dominant strategy of cooperating with whatever the ‘brakemen’ saw as being in their best interests (Martin 1993: 104; Zürn 1992: 209–11). This situation explains the initial bargaining process between the EC and the CEECs as well as its outcome: association. To begin with, the CEE governments, not the EC, raised the issue of Community membership and constantly pushed the member states for an explicit commitment to this goal. But in early 1990 the EC

The community trap 149 proposed to conclude association agreements without referring to, let alone promising, future membership. During the association negotiations, the EC did agree to a formula mentioning membership but went only so far as to recognize future membership as the associates’, but not the Community’s, ‘final objective’ (Sedelmeier and Wallace 1996: 370; Torreblanca 1997: 12). The first agreements were concluded in December 1991 and went into force in February 1994. Instrumental behaviour and asymmetrical bargaining power also characterized the substantive negotiations about trade liberalization.10 The EC offered the CEECs a fast and asymmetrical liberalization of trade in industrial products. However, it reserved protectionist ‘anti-dumping’ and ‘safeguard’ measures for itself and made an exception of exactly those sectors (agriculture, textiles, coal, iron and steel) in which the Central and Eastern European economies were competitive (Mayhew 1998: 23; Sedelmeier and Wallace 1996: 371). Portugal blocked a further liberalization of trade in textiles, France vetoed any concession on beef, and Spain blocked agreement on steel trade, leading negotiations to the brink of breakdown.11 As a result, the CEECs ran into a permanent trade deficit with the Community. Blocking tactics continued in later rounds of the association negotiations. For instance, differences of view over the safeguard clause and defence measures delayed the interim agreement with Bulgaria for more than six months,12 whereas Italy blocked the opening of association negotiations with Slovenia for almost a year between 1994 and 1995, and the signing of the agreement for more than six months between 1995 and 1996, because of problems resulting from the nationalization of Italian property in the 1950s. Furthermore, the EC as a whole, and some of the reticent members in particular, used diverse delaying tactics to deflect demands from the CEECs for full membership. On the one hand, the CEECs were offered alternative arrangements such as French President Mitterrand’s ‘European Confederation’ or French Prime Minister Balladur’s ‘Stability Pact’ for Europe, as well as several ideas of ‘membership light’ (that is, excluding the more cost-intensive Community policies). On the other hand, the urgency of other issues (such as ‘Maastricht’ or the 1995 enlargement round) often provided a welcome opportunity to put eastern enlargement on the end of the agenda. Thus, the CEECs’ initial bid to join the Community resulted in association, the applicants’ acceptance of the highest level of cooperation on which the member states could agree. This corresponds to the ‘Nash solution’ in a suasion game. For the member states, association was an efficient, beneficial institutional solution for their relations with Central and Eastern Europe. The association regime enabled the potential winners of integration to intensify their economic involvement in CEE markets and, at the same time, protected the potential losers against the costs of trade and budget competition. Association allowed the EU to protect the sectors in which it is particularly vulnerable to competition and denied the CEECs the right to participate in EU decision-making, the CAP and the structural policies. Given the asymmetrical structures of material bargaining power, neither the ‘drivers’ in the EU nor the CEECs were capable of turning association into

150 Frank Schimmelfennig enlargement. For both the CEECs and the pro-enlargement member countries, however, association was still preferable to a weaker or no institutionalized relationship. From association to accession negotiations In a slow and incremental process the outcome of the first round of bargaining on eastern enlargement was challenged and gradually revised. Almost immediately after the first association agreements had been signed, Commissioner Frans Andriessen advocated a new strategy aimed at committing the Community to the goal of eastern enlargement and preparing the CEECs for this eventuality (Torreblanca 1997: 465–7). The Conclusions of the Presidency at the Lisbon Council (June 1992) mentioned that ‘The principle of a Union open to European states that aspire to full participation and who fulfil the conditions for membership is a fundamental element of the European construction’, but the member governments still kept to the formula that accession was something that ‘they [the CEECs] seek’. In June 1993, the European Council agreed in Copenhagen ‘that the associated countries [. . .] shall become members of the European Union’ and laid down the general conditions of admission. It did not, however, develop a strategy to prepare the associated countries for membership. This strategy was the subject of internal policy debate and negotiations throughout 1994. They resulted in a ‘pre-accession strategy’, a ‘structured relationship’, and a ‘White Paper’ on the preparation of the CEECs for the internal market. In spite of initial reticence and subsequent incrementalism, the perspective of membership became more concrete with each decision-making step. At the Madrid European Council in December 1995, the heads of state and government asked ‘the Commission to expedite preparation of its opinions on the applications made’ and ‘to take its evaluation of the effects of enlargement on Community policies further’, so that accession negotiations with the CEECs could begin after the 1996–7 intergovernmental conference (IGC). These tasks were completed in the summer of 1997, when the Commission presented its ‘Agenda 2000’ for policy reform as well as its ‘Opinions’ on the ten applicant countries. In spite of the poor results of the IGC on institutional reform and strong interest group and member government opposition against Agenda 2000, accession negotiations with the first group of five countries began in March 1998. This process cannot be explained by the structure of material bargaining power within the EU or between the EU and the CEECs. It also offers no evidence for the alternative mechanism that, in the absence of credible threats, the ‘drivers’ offered the ‘brakemen’ sufficiently sizeable concessions to turn them into winners of enlargement. The accession negotiations opened before the outcomes of the necessary policy reforms were even calculable, as the IGC had left the crucial issues undecided. If anything, the Agenda 2000 and the fierce opposition of the major net contributors to an expansion of the Community’s spending ceiling indicated that major financial compensation for the ‘brakemen’ would not be forthcoming.

The community trap 151 Of course, each member state still had the chance to veto the accession treaties in the end if it expected to incur net costs as a result of enlargement. Nevertheless, intergovernmental bargaining theory does not explain why the EU departed from the association regime, embarked upon enlargement, and stuck to this policy in spite of a sluggish reform process. In sum, the divergent enlargement preferences of the CEE states and the EC member states, the initial bargaining behaviour of the ‘brakemen’ within the Community, and association as the initial collective outcome conform to rationalist expectations. However, the incremental decisionmaking process, which began in 1992 and resulted in the opening of accession negotiations, is hardly reconcilable with either the process or the outcome predicted by rationalist intergovernmentalism. A solution to this puzzle therefore has to account for both the unexpected ‘enlargement’ outcome and the process that upset the ‘association’ equilibrium.

Explaining the outcome: sociological institutionalism Enlargement as the expansion of international community Sociological institutionalist theories reject the basic metatheoretical and theoretical premises of (economic) rationalism.13 The central difference is ontological. Sociological institutionalists share a structuralist ontology according to which social phenomena ‘cannot be reduced to aggregations or consequences of individuals’ attributes or motives’ (DiMaggio and Powell 1991: 8). Rather, the actors and their interests and preferences must be endogenized, that is, analysed and explained as the products of intersubjective structures and social interaction. Sociological institutionalists regard the international system as an institutional environment structured by intersubjective cognitions and norms.14 Correspondingly, sociological institutionalists reject the assumption that international actors generally act egoistically and instrumentally. They view rationality as ‘constructed’ or ‘contextbound’ (DiMaggio 1998: 700; Nee and Strang 1998: 706–7) and the actors as following a ‘logic of appropriateness’ (March and Olsen 1989: 160–62). On the basis of these assumptions, sociological institutionalism posits that the goals and procedures of international organizations are more strongly determined by the standards of legitimacy and appropriateness of the international community to which they belong than by the utilitarian demand for efficient problem-solving (Katzenstein 1997: 12; Reus-Smit 1997: 569; Weber 1994: 4–5, 32). Consequently, states that share the collective identity of an international community and adhere to its constitutive values and norms are also entitled to join its organizations. The EU is the main organization of the European international community. It is based on a European and liberal collective identity. The belief in and adherence to liberal human rights are the fundamental beliefs and practices that constitute the community. They ‘define legitimate statehood and rightful state action’ in the domestic as well as in the international realm (Reus-Smit 1997: 558). In the domestic sphere, the liberal principles of social and political order – social pluralism, the rule of law, democratic political participation and representation, private property, and

152 Frank Schimmelfennig a market-based economy – are derived from and justified by these liberal human rights. In the international sphere, the liberal order is characterized by the democratic peace (see, e.g., Owen 1994) and multilateralism (Ruggie 1993: 11; Reus-Smit 1997: 577). Both institutions are based on liberal norms externalized from the domestic sphere. According to sociological institutionalism, then, we can hypothesize that the EU will be ready to admit any European state that reliably adheres to the liberal norms of domestic and international conduct.15 Liberal norms and eastern enlargement The sociological conditions of enlargement correspond closely to those set up by the Community. Whereas Article 237 of the original EEC Treaty accorded all European states the right to apply for membership, subsequent declarations and legal acts as well as Community practice have established several more precise prerequisites for a successful application (Richter 1997; see also Michalski and Wallace 1992: 33–6). First, the EU requires its members to be democracies that respect the rule of law and human rights (preambles to the Single European Act and the Treaty on European Union [TEU], Article 6 and 49 TEU). Second, new members must conform to the Community principle of an open-market economy with free competition (Article 3a EC Treaty). However, this principle offers members a lot of leeway regarding the degree of state involvement and intervention in the economy and does not specify any necessary level of economic development. Finally, new members must accept the entire acquis communautaire, i.e., the entire body of EU law, as well as the acquis politique (mainly from the Common Foreign and Security Policy). These general prerequisites were reaffirmed with regard to eastern enlargement. In June 1993 the European Council in Copenhagen explicitly established the accession of CEE states as an EU objective, provided that they have achieved ‘stability of institutions guaranteeing democracy, the rule of law, human rights and respect for and protection of minorities’ and ‘the existence of a functioning market economy’, as well as the ability to adopt the acquis. They must accept the aims of political, economic and monetary union as stated in the TEU (but they do not have to meet the criteria of economic convergence required for joining the EMU). If the sociological expectation is correct, the five CEECs selected for concrete accession talks in 1997 should, first, have matched the EU members and, second, have distinguished themselves from the other five associated countries with regard to their compliance with the liberal norms that constitute the European international community. An analysis based on the Freedom House human rights indicators (table 7.3) confirms this expectation to a very large degree. With the exception of Slovakia,16 all associated countries are categorized as ‘free’, whereas all other CEECs were rated ‘partly free’ or ‘not free’. Since all ‘free’ CEECs are associated with the EU, a political system in which political human rights and civil liberties are guaranteed appears to be a sufficient (although not necessary) condition of association with the EU.17 The more detailed figures reveal a distinction between the five countries that

The community trap 153 Table 7.3 Data on the selection of CEECs for accession negotiations Status (1997)

Country

FI

PR

CL

DEM

ECO

Polity

‘In’

Czech Republic Estonia Hungary Poland Slovenia Bulgaria Latvia Lithuania Romania Slovakia

free free free free free free free free free partly free

1 1 1 1 1 2 2 1 2 2

2 2 2 2 2 3 2 2 3 4

1.38 2.06 1.44 1.44 1.88 3.81 2.06 2.06 3.88 3.81

1.88 2.13 1.63 2.00 2.38 5.38 2.50 2.50 4.63 3.38

10 (7) 8 (7) 10 (7) 9 (6) 10 (6) 8 (7) 8 (1) 10 (6) 8 (1) 7 (–)

‘Pre-in’

Note The Freedom House data are from Karatnycky et al. (1997). I chose the 1996–7 data because they represent, by and large, the situation in the CEECs shortly before the Commission prepared its opinions on the candidates. FI stands for ‘Freedom Index’, which is a combined measure of PR (‘Political Rights’) and CL (‘Civil Liberties’). The ‘democracy’ (DEM) and ‘economy’ (ECO) ratings are specific to the organization’s ‘Nations in Transit’ evaluation. Freedom House ratings are from 1 (best) to 7 (worst). The ‘Polity’ column contains the 1996 ‘democracy’ scores from the Polity IIIu database (all countries scored ‘0’ on the ‘autocracy’ score). 10 is the highest possible score. The figure in parentheses stands for the number of years the country has continuously scored 8 or higher.

were invited to concrete accession talks and the other associated countries. First, all countries of the top group received the best rating for political rights (PR = 1) and the second best rating for civil liberties (CL = 2), whereas Bulgaria, Latvia, Romania and Slovakia scored only 2 for political rights and 2 or worse for civil liberties. Second, the top five countries rank highest with regard to their achievements of democratic and economic transition, as indicated by low values in the DEM and ECO columns of table 7.3. Finally, the ratings for the invited countries match the ratings for current EU members. All EU members were rated 1 for political rights and 1 or 2 for civil liberties. (Only Greece scored 3 for civil liberties.) The sociological expectation is contradicted only by the fact that Lithuania was not invited to formal accession talks, although its record was as good as that of the first-rate candidates and the EU members.18 According to the Commission’s ‘Opinion’ of 1997, Lithuania’s comparatively poor economic capacity was the decisive factor. To be sure, rationalist institutionalism would not expect the EU member states to be indifferent to the democratic credentials of the candidate countries and their adherence to the norms of peaceful conflict management and multilateralism. The admission of non-liberal countries to the EU would strongly increase the heterogeneity of the membership, the potential for serious intra-organizational conflict, and the costs of decision-making.19 In the rationalist perspective, however, a community of basic political values and norms is at best a necessary condition of enlargement. In the absence of net economic or security benefits, having common values and norms does not create a positive incentive to expand the organization. By contrast, in the sociological perspective, sharing a community of values and

154 Frank Schimmelfennig norms with outside states is both necessary and sufficient for their admission to the organization. In sum, the sociological approach to enlargement gives a satisfactory correlational account of the main initial outcomes of the eastern enlargement. The available summary data on liberal democratic transformation in the CEE region support not only the sociological argument of why the EU is prepared to admit CEECs at all but also, to a large extent, how it differentiates between the candidate countries. Sociological institutionalism, however, still has to provide a plausible account of the process that led to this outcome.

Explaining the process: rhetorical action Any account of the EU’s decision-making process on enlargement must be able to reconcile and causally link two apparently contradictory observations: selfinterested state enlargement preferences based on mainly material conditions and an initial policy outcome that reflects the distribution of material bargaining power, on the one hand, and an eventual policy outcome based on the collective identity and the social norms of an international community, on the other. Insofar as liberal intergovernmentalism explains international policy outcomes as an effect of material bargaining power, it cannot account for the second observation. First, neither the incentive structure for the member states nor the structure of bargaining power changed in a way that could have brought about the policy change; second, liberal intergovernmentalism denies that collective identities and norms exert a decisive influence on policy outcomes. In contrast, sociological institutionalism cannot account for the national preferences and the initial bargaining behaviour, insofar as it attributes state interests to internalized social identities and norms and the behaviour of state actors to the conscious or habitualized choice of the appropriate action.20 What we need to specify is a causal mechanism through which the EU community values and norms asserted themselves against self-interested national preferences and bargaining behaviour. As suggested by the terminology of the ‘suasion game’ in which the actors found themselves on the basis of their material bargaining power, some sort of moral appeal was needed to change the uncooperative strategy of the dominant actors. The mechanism I propose is ‘rhetorical action’, that is, the strategic use of norm-based arguments. Rhetorical action The causal mechanism of rhetorical action consists of several assumptions and causal steps. The assumptions are about agency and structure. Rhetorical action presupposes weakly socialized actors. On the one hand, the actors are assumed to belong to a community whose constitutive values and norms they share. This collective identity generates a general commitment to the community and a general interest to uphold and disseminate its values and norms. On the other hand, it is not expected that collective identity shapes concrete preferences. In specific decision-

The community trap 155 making situations, actors often develop and instrumentally pursue egoistic, material interests that compete with their commitment to the community values and norms. The causal mechanism of rhetorical action then describes how the actors are brought to focus on their collective interests and honour their obligations as community members.21 The medium of this influence is legitimacy. All polities have institutionalized a standard of political legitimacy that is based on the collective identity, the ideology and the constitutive values and norms of the political community.22 The standard of legitimacy defines who belongs to the polity as well as the rights and duties of its members. It distinguishes rightful and improper ways of acquiring, transferring and exercising political power, and it determines which political purposes and programmes are desirable and permissible. In doing so, the standard allocates different degrees of legitimacy to the actors’ political aspirations, preferences and behaviours. The weakly socialized actors assumed here, however, do not take the standard of legitimacy either for granted or as a moral imperative that directly motivates their goals and behaviours. They confront the standard of legitimacy as an external institutional resource and constraint.23 As such, it affects both the mode of interaction between political actors and their relative power over outcomes. As for the mode of interaction, the legitimacy requirement allows and forces the actors to argue.24 They are obliged to justify their political goals on the grounds of the institutionalized identity, values and norms. In other words, the standard of legitimacy serves as a ‘warrant’ or ‘backing’ for the validity of arguments in political discourse.25 Actors whose self-interested preferences are in line with the community norms have the opportunity to add cheap legitimacy to their position. They will argumentatively back up their selfish goals and delegitimize the position of their opponents. This strategic use of norm-based arguments in pursuit of one’s self-interest is rhetorical action.26 As for power over outcomes, in a community environment legitimacy strengthens the actors’ bargaining position. By linking up distributional conflict with the collective identity and the constitutive values and norms of the community, rhetorical action changes the structure of bargaining power in favour of those actors that possess and pursue preferences in line with, though not necessarily inspired by, the standard of legitimacy. Rhetorical action thereby has the potential to modify the collective outcome that would have resulted from constellations of interests and power alone.27 This argument still begs the question of why legitimacy and rhetorical action can have such powerful effects if actors have materially determined preferences that deviate from the institutionalized norms. In the regulative perspective on institutions, it is often assumed that actors comply with the rules in order to avoid coercive sanctions imposing potentially infinite costs on them. In the public choice perspective, political actors operate under the constraint that the voters may not re-elect them if they deviate from the standard of legitimacy. Neither perspective, however, captures the core of the compliance problem in international relations. On the one hand, the international system widely lacks a central authority structure

156 Frank Schimmelfennig that could enforce compliance. On the other hand, most international political issues are exempt from the re-election constraint either because the voters are not sufficiently informed about or interested in these issues or because they escape effective control by national constituencies and legislatures. These conditions also apply to eastern enlargement. First, although the consolidated liberal democratic CEECs were entitled to membership according to EU norms and rules, there was no way legally, let alone coercively, to enforce this right. Second, no member government has had to fear electoral defeat if it opposed enlargement. Public support for eastern enlargement has been low and has waned over time.28 Informal, ‘soft’ mechanisms of social influence provide an alternative explanation for compliance (Johnston 1999). Shaming is a prominent example; it means the public exposure of illegitimate goals and behaviours.29 To be effective, shaming requires that actors have declared their general support of the standard of legitimacy at an earlier point in time – either out of a sincere belief in its rightfulness or for instrumental reasons. When, in a specific situation, actors would prefer to deviate from the standard because it contradicts their self-interest, members of their community can shame them into compliance by exposing the inconsistency between their declarations and their current behaviour. Members that sincerely believe in the community norms but could not resist the temptation of selfinterested behaviour will feel genuinely ashamed and will change their behaviour in order to straighten things out with themselves. Even members that have supported a norm for mainly instrumental reasons will be concerned with what the public exposure of their illegitimate preferences and behaviour will do to their standing and reputation in the community. Of course, the shamed actors also use rhetorical action in order to avoid or reduce the costs of conforming to the standard of legitimacy. They may, for instance, downplay the community values and norms or reinterpret them to their advantage, question their relevance in the given context, or bring up competing community values and norms that back their own preferences. There are, however, limits to strategic manipulation. First, to the extent that the standard of legitimacy is clearly and unambiguously defined as well as internally consistent, it becomes difficult rhetorically to circumvent its practical implications (Franck 1990: 49). Second, actors must be careful not to lose their credibility as community members when manipulating social values and norms (Elster 1989a: 100, 103; 1992: 19). Above all, they must avoid creating the impression that they use values and norms cynically and inconsistently. The requirement of consistency applies both to the match between arguments and actions and to the match between arguments used at different times and in different contexts. If inconsistency is publicly exposed, credibility and reputation suffer. According to Jon Elster, the ‘joint impact of the constraints of impartiality and consistency can be considerable’ (1992: 19). Thus, even if community members use the standard of legitimacy only opportunistically to advance their self-interest, they can become entrapped by their arguments and obliged to behave as if they had taken them seriously. Like other mechanisms of social influence, rhetorical action and shaming do not fit either rationalism or constructivism neatly. On the one hand, rhetorical action

The community trap 157 would not be effective if the actors were not concerned with their credibility and legitimacy as community members, and they would not be concerned if they did not, to some extent, identify themselves and link their political existence with the community ( Johnston 1999: 22). On the other hand, shaming would not be necessary if the intersubjective structure determined their interests and behaviour as a result of internalization and habitualization. The shaming mechanism is not only compatible with, but logically depends on, the assumptions both that actors possess and pursue selfish, norm-violating interests and that they do not follow a ‘logic of appropriateness’ except under social pressure. Finally, shaming through rhetorical action does not equal persuasion. The actors under social pressure (usually) do not change their interests; they only refrain from illegitimate behaviour. Successful rhetorical action silences the opposition to, without bringing about a substantive consensus on, a norm-conforming policy.30 I conclude this section with a methodological note. The rhetorical analysis of the decision-making process that brought about the commitment to enlarge the EU to the East will naturally be based on speech acts. In a situation in which direct, reliable historical sources on this process will not be accessible for a long time, rhetorical analysis has the advantage of being able to draw on an abundance of publicly available data for the analysis of argumentative behaviour, such as official documents, speeches, declarations and statements at press conferences. Moreover, whether these sources reflect the ‘true motivations’ of the actors is irrelevant for a rhetorical analysis. First, as I have argued, rhetorical action will affect community members regardless of whether they have internalized a norm or simply fear for their standing in the community. Second, no matter whether political actors really mean what they say, they will choose their arguments strategically; and both opportunistic and truthful arguments have real consequences for their proponents and the outcome of the debate. The disadvantage of this method is that I cannot adduce direct evidence for the psychological effects of rhetorical arguments and for the primacy of credibility and legitimacy concerns in bringing about the enlargement decision. Moreover, as ‘silencing’ is the main postulated effect of rhetorical action, the absence of certain speech acts will often be its most important indicator. I do think, however, that the main observable features of the enlargement process are consistent with the mechanism of rhetorical action and that they ‘make sense’ in a rhetorical perspective. In the following sections, I seek to show that the Community has committed itself ideologically and institutionally to the integration of all European liberal societies from its beginnings and has continually confirmed this commitment in its rhetoric. This rhetorical commitment created the prerequisite for effective shaming during the enlargement process. The ‘drivers’ among the member states as well as the associated CEE states regularly justified their demands for enlargement on the grounds of this commitment and of the community’s collective identity. These arguments effectively silenced any open opposition to eastern enlargement and ensured that enlargement policy has remained on track in spite of difficult practical problems and major distributional conflict. Rhetorical commitment led to rhetorical entrapment.

158 Frank Schimmelfennig Rhetorical commitment The ‘founding myth’ of European integration starts with a definition of the European situation after World War II: Europe was devastated by the apocalypse of fascism and war, removed from the centre of the international system, and threatened by Soviet communism. This development called for a break with the traditional pattern of European international politics: only a union of the democratic European states would be able to create lasting peace among them, strengthen their domestic as well as international ability to resist totalitarianism, and make Europe’s voice felt in international relations (see, e.g., Lipgens 1982: 44–57). European integration was thus based on a pan-European and liberal – both antifascist and anti-communist – ideology and identity. The federalist congresses of the late 1940s appealed to all European peoples, rejected the division of the continent, and accepted integration in the West only as a core to be joined by the rest of Europe ‘in a free and peaceful community’.31 During the Cold War, however, the CEE peoples were represented only by politicians in exile, and the membership of the first organizations of the European international community – such as the Council of Europe and the European Coal and Steel Community – had to be limited to Western European countries. When the European Economic Community was founded in 1958, the panEuropean vocation was still present in the treaty in which the founding states declared themselves ‘determined to lay the foundations of an ever closer union among the peoples of Europe’, called ‘upon the other peoples of Europe who share their ideal to join in their efforts’32, and accorded ‘any European state’ the right to apply for membership (Article 237 EEC Treaty). It also surfaced regularly in ceremonial speeches of the Community representatives, such as when, in 1968, the first president of the Commission, Walter Hallstein, invoked a ‘sentiment of pan-European solidarity’33 or when, in 1980, the French president, François Mitterrand (who was to become the most prominent enlargement sceptic among the European leaders), stated, ‘What we term Europe is a second-best option which alone cannot represent all European history, geography and culture’ (quoted in Sedelmeier 2000: 168). At the policy level, however, the pan-European orientation all but disappeared from the agenda. During the Cold War, to uphold their panEuropean vocation was a cheap opportunity for the EC and its member states to reaffirm their allegiance to the community ideology. At the same time, however, this reaffirmation created a public verbal commitment.34 The end of communist rule in Central and Eastern Europe was initially greeted with enthusiasm in the West, since it signalled the victory of liberalism in the intersystemic conflict and promised to boost the West’s international and domestic legitimacy. In line with their community values and their past rhetoric, the heads of state and government of the EC declared at their Strasbourg summit of December 1989: The current changes and the prospects for development in Europe demonstrate the attraction which the political and economic model of Community

The community trap 159 Europe holds for many countries. The Community must live up to this expectation and these demands: its path lies not in withdrawal but in openness and cooperation, particularly with other European states. [. . .] [T]he objective remains [. . .] that of overcoming the divisions of Europe.35 At the same time, however, the Community’s pan-European ideology ceased to be a low-cost legitimacy-enhancing device because the new CEE governments demanded massive support for their transition to liberal democracy. More importantly, they interpreted ‘overcoming the divisions of Europe’ as the promise of membership that was not explicitly mentioned in any of the EC’s post-Cold War declarations. Rhetorical argumentation Both the CEE states and the Western supporters of eastern enlargement counted on the impact of rhetorical action in order to achieve their goal. The CEE governments based their claims to membership on the standard of legitimacy of the European international community: European identity and unity, liberal democracy and multilateralism. They invoked the Community’s membership rules and took its ritualized pan-European liberal commitment at face value. They tried to demonstrate that these values and norms obliged the EU to admit them and that a failure to do so would be an act of disloyalty to the ideational foundations of the European international community. They uncovered inconsistencies between the constitutive values and the past rhetoric and practice of the Community, on the one hand, and its current behaviour towards the CEECs, on the other. In doing so, they managed to ‘mobilize’ the institutionalized identity and to make enlargement an issue of credibility. Finally, in order to advance their individual interest in accession, the CEE state actors sought to show not only that they share the community values and adhere to its norms but also that they stand out from the other candidates in this respect. Some typical examples for these rhetorical strategies follow. Manipulating European identity The manipulation of collective identity consists mainly in the claim by CEECs that they belonged not only to geographical Europe but also to the (informal) European international community. This claim was then linked to the formal membership rules of the European Union in order to back up their demand for accession. CEE representatives argued that they traditionally shared the values and norms of European culture and civilization, always aspired to belong to the West during the years of the ‘artificial’ division of the continent, and had demonstrated their adherence to the European standard of legitimacy during and after the revolutions of 1989 to 1991 (cf. Neumann 1998). The ‘return to Europe’ became the battle cry of almost all CEE governments, including some improbable candidates. Not only did the Hungarian foreign

160 Frank Schimmelfennig minister Geza Jeszenczky justify his country’s official request for EU membership as the ‘return to this Community to which it has always belonged’.36 The Romanian ambassador to the EU, Constantin Ene, also asserted that ‘Romania has always been part of West European traditions’ (1997), and even the head of a delegation of the Christian Democrat Union of Georgia visiting the European Parliament expressed that Georgia hoped to ‘return to Europe’.37 In their competition for accession to Western organizations, the CEE states, furthermore, combined the assertion of their own European identity with the claim ‘that the next state to the East is not European’ (Neumann 1998: 406). Finally, CEE state actors manipulated the European identity and the West’s ritualized commitment to ‘overcoming the divisions of Europe’ in order to get a better deal in their negotiations with the EU. The Polish chief negotiator in the association negotiations with the EC, Olechowski, stated ‘that “the technocratic approach” is not enough in these negotiations, which have a historic goal: give Europe back to Poland, and Poland back to Europe.’38 Correspondingly, the Western demonstration of its superior bargaining power in these negotiations was denounced as an ‘economic Yalta’ or a ‘new economic Iron Curtain’ (SaryuszWolski 1994: 20–21). Manipulating accession criteria Given that criteria of economic performance and the self-interest of most member states worked against eastern enlargement, CEE governments pointed to the constitutive values and norms of the Western community and the intentions ‘of the forefathers of European construction’ to support their demand that the member states base their decisions on political criteria and a long-term collective interest in European peace, stability and welfare (see, e.g., Saryusz-Wolski 1994: 23). On the basis of these criteria, CEE states argued incessantly that they were, or would soon be, ready for Community membership. One representative of Hungary, for instance, claimed as early as 1990 to be able to catch up with EC members within a few years; the Hungarian government continued to repeat this claim until it achieved membership.39 In their race to membership, the candidate states furthermore sought to demonstrate their individual merits and achievements. The same Hungarian representative, for instance, pointed to Hungary’s ‘pioneering role in the changes in Central and Eastern Europe’.40 Reportedly, at a meeting with the EC in 1992, Hungary, Poland and Czechoslovakia ‘would have liked the joint statement to establish a clear distinction between themselves’ and other candidates: ‘They do not believe Bulgaria and Romania are able to establish the same links with the EC as they do at this time.’41 Moreover, CEE actors sought to counter the Community strategy of postponing a concrete commitment to eastern enlargement and its demands for the full adoption of the acquis communautaire ahead of accession. To achieve early admission and, possibly, water down the stringent admission criteria, they claimed that, in the absence of a concrete timetable for enlargement, the West risked the CEE societies turning away from liberal democracy. Full membership was the only

The community trap 161 means of securing liberal transformation and economic modernization.42 The scenario for the decay of pan-European liberalism and the betrayal of the Community’s founding myth was most dramatically outlined by the Czech president Vaclav Havel, when he spoke about enlargement in 1994 before the European Parliament:43 Anything else would be a return to the times when European order was not a work of consensus but of violence. [. . .] For if the future European order does not emerge from a broadening European Union, based on the best European values and willing to defend and transmit them, the organization of the future could well fall into the hands of a cast of fools, fanatics, populists and demagogues waiting for their chance and determined to promote the worst European traditions. Exposing inconsistencies The crucial element in the shaming strategy of the CEECs was the argument that the EU failed to honour past commitments, match words and deeds, and treat outside countries consistently. CEE state actors repeatedly pointed at the mismatch between political declarations, such as the Strasbourg declarations, and actual behaviour, such as protectionism and stalling tactics concerning enlargement (see, e.g., Saryusz-Wolski 1994: 23). Moreover, CEE policy-makers compared the EU’s eastern policy with its relations to other non-members and its behaviour in earlier rounds of enlargement in order to demand equal treatment. In the association negotiations, the Central European governments argued that a future-membership clause had been included in the agreements with Greece and Turkey in the early 1960s. According to Peter van Ham, ‘in particular, the Spanish and Portuguese precedents have been major trump cards which could be played by the Central Europeans.’ As early as 1990, the Hungarian foreign minister, Kodolanyi, argued that the Iberian enlargement ‘had been the result of a political settlement’ (pushing economic problems in the background) and ‘that the Community would do the right thing now to take a similar decision’ (Ham 1993: 196, 198). After the EU had committed itself to eastern enlargement, Central and Eastern Europeans still suspected the Community to ‘discriminate against the transitional countries’ by imposing economic conditions that had to be met ahead of accession negotiations, whereas ‘both Mediterranean enlargements were characterized mainly by political motives’ and, in the earlier cases, the prerequisites of membership did not affect the beginning of negotiations (Inotai 1998: 159; see also Kumar 1996: 54). These rhetorical strategies and arguments were echoed by the ‘drivers’ among the member states and the Community institutions. In his 1990 Bruges speech, the German president, Richard von Weizsäcker, first recalled the founding myth of European integration and the ideas of Schuman and Monnet and then appealed to the Europeans to follow their example under the present conditions. Like Havel he argued that Europe was, then and now, faced with a clear set of alternatives: either

162 Frank Schimmelfennig integration or a return to nationalist and authoritarian destabilization.44 Furthermore, the German government sought to de-emphasize its self-interest in enlargement. The foreign minister, Klaus Kinkel, for instance, asserted that ‘we don’t concern ourselves with these countries out of national interest. We feel we should take the opportunity to create a complete Europe.’45 The British prime minister, Margaret Thatcher, proposed in her 1990 Aspen speech that ‘the Community should declare unequivocally that it is ready to accept’ the CEECs as members and based this claim on both identity and consistency: ‘We can’t say in one breath that they are part of Europe, and in the next our European Community Club is so exclusive that we won’t admit them.’46 Furthermore, members of both the Commission and the European Parliament invoked the standard of legitimacy against the egoistic preferences of member states. First, they emphasized collective identity. Already during his first visit to Prague after the ‘velvet revolution’, Commissioner Frans Andriessen stated that ‘noone who has made the short journey between Brussels and Prague can be unaware that Czechoslovakia is our neighbour; its history is part of our history; its culture and traditions are part of our common European heritage.’47 Willy DeClerq, president of the parliament’s Committee on External Economic Relations, criticized those blocking the association negotiations by saying ‘he would have thought [. . .] that the Community was going to treat the countries concerned “as European”.’48 Second, on various occasions, Commission president Jacques Delors publicly exposed the inconsistency between the Community’s rhetoric and its practical behaviour towards the CEECs. During the coup d’état in the Soviet Union in August 1991, he ‘launched a vigorous appeal to the Member States to show consistency between their actions and their statements’:49 ‘It’s no good making fine speeches with a sob in your voice on Sunday and then on Monday opposing the trade concessions enabling those countries to sell their goods and improve their standards of living.’50 He further warned that ‘the perspective of the next enlargement is not clear’ and that ‘it is not enough to send encouraging signals to the East European countries’ (quoted in Torreblanca 1997: 14). Third, the supporters of a generous policy towards the East have repeatedly addressed the credibility issue directly in order to exert pressure on the ‘brakemen’. Commissioner Sir Leon Brittan affirmed that the blockage of association negotiations by some member states ‘could affect the Community’s “credibility”’.51 Similarly, the European Parliament requested in October 1993 that the summit intervene to end the blockage of the interim agreement with Bulgaria because ‘it is undermining the European Community’s credibility in Eastern Europe.’52 The most systematic and formal attempt rhetorically to commit the Community to eastern enlargement can be found in the Commission’s report Europe and the Challenge of Enlargement to the Lisbon Summit in June 1992. Prepared shortly after the signing of the first Europe Agreements, it marked the starting-point of the Commission’s attempt to turn the association ‘equilibrium’ into a concrete promise and preparation of enlargement. The Commission referred to the Community vision of a pan-European liberal order as creating specific obligations in the current

The community trap 163 situation: ‘The Community has never been a closed club, and cannot now refuse the historic challenge to assume its continental responsibilities and contribute to the development of a political and economic order for the whole of Europe’ (European Commission 1992: 2). By stating that ‘[f]or the new democracies, Europe remains a powerful idea, signifying the fundamental values and aspirations which their peoples kept alive during long years of oppression’ the report obviously meant to shame those members who betrayed ‘Europe’ out of narrow self-interest (ibid.: 8). Rhetorical entrapment What indications do we have that these arguments stuck, and in which way did they influence the decision-making process? The evidence suggests that the rhetorical action of the ‘drivers’ did not change the basic enlargement preferences of the ‘brakemen’ but effectively prevented them from openly opposing the goal of enlargement and its gradual implementation. In other words, the ‘brakemen’ became rhetorically entrapped.53 For the enlargement sceptics, it was difficult to attack the pro-enlargement arguments on legitimate grounds. Generally, rhetorical actors possess three strategies to undermine the validity of an argument: they can dispute the warrant on which the argument rests, call into question the credibility of the proponent, or doubt the argumentative link between the warrant and the claim. The ‘brakemen’ could not and did not directly dispute the warrant of panEuropean liberalism because this would have meant rejecting the very values and norms on which their membership in the Community rested and admitting the hypocrisy of their former public pronouncements. They could and did, however, base their reticence on other, potentially competing values and norms of the Community’s standard of legitimacy. The most widespread counter-argument was that ‘widening’ might dilute the achieved level of supranational integration and impede its further ‘deepening’. From 1990, France insisted that work on the Maastricht Treaty be completed before the Community dealt with the question of enlargement (Deubner 1999: 96); and in September 1997 Belgium, France and Italy stated in a declaration to be included in the Amsterdam Treaty that a further institutional reinforcement of the EU was an ‘indispensable condition of enlargement’.54 However, whereas this norm-based counter-argument might have compromised the British enlargement objectives, it was bound to fail with regard to Germany and the Commission, since both ‘drivers’ had, from the start, demanded both widening and deepening (see, e.g., European Commission 1992: 2). Moreover, shaming had obviously already left its mark in 1997: the signatories of the declaration were careful to allay suspicion that they wanted to block enlargement, and other states hesitated to subscribe to the declaration in order not be identified as adversaries of CEE membership.55 The strategy of destroying the proponents’ credibility was of limited use, too. Whereas it may have been possible to call into question the liberal democratic credentials of, say, the Meciar or Iliescu governments in Slovakia and Romania, the reputation of

164 Frank Schimmelfennig presidents Havel and Wałęsa was beyond dispute. And, as I argued earlier, whereas it may have been possible to unmask the British advocacy of enlargement as an attempt to dilute the Community, the integrationist credentials of Germany or the Commission were difficult to undermine. The strategy of calling into question the suitability of the warrant to support the claim would have consisted in denying that the candidate states truly belong to ‘Europe’, adhere to the community values and fulfil the accession criteria. This strategy was credible with regard to those countries that delayed reform or deviated from liberal transformation, and it was certainly correct that the CEECs were not ready for membership in the early 1990s. But the drivers never intended to admit authoritarian CEECs. Nor did they propose to begin accession negotiations immediately. Most importantly, the argument that these countries were not ready to join the EU did not preclude the EU from supporting their quest for membership early on. As Thatcher said in Aspen, ‘It will be some time before they are ready for membership; so we are offering them intermediate steps such as association agreements. But the option of eventual membership should be clearly, openly and generously on the table.’56 And the Commission argued that ‘we must respond with a strategy that is inspired not only by practical considerations of what is possible in the near future, but by a vision of the wider Europe which must be imagined and prepared in the longer term’ (European Commission 1992: 8). Under these conditions, the ‘drivers’ were able to silence any explicit opposition to the general goal of eastern enlargement and to make the ‘brakemen’ support the eventual membership of liberal democratic CEECs – at least verbally. On various occasions, the ‘drivers’ confronted the ‘brakemen’ with the choice either to subscribe publicly to or openly to oppose a step towards eastern enlargement. These steps were usually small or involved no immediate costs or obligations, making them more difficult to reject. However, with each small or general public commitment, the credibility costs of non-enlargement rose. According to the memoirs of President Mitterrand’s adviser Hubert Védrine, Mitterrand considered himself in a morally awkward situation as long as he resisted the pressure of the German and the CEE governments to consent to enlargement. Therefore, the French government felt obliged – in its 1991 bilateral treaties with Czechoslovakia, Hungary and Poland – to declare its official support to their membership aspirations (Védrine 1996: 562; Deubner 1999: 96). Although France continued to obstruct any official commitment at the EC level, this move allowed the Hungarian prime minister Antall publicly to raise French credibility stakes: ‘I have confidence in the French President’s word.’57 Later, the French government felt compelled to soften its stance because it found itself accused of being the main obstacle to a pro-enlargement policy and feared losing the sympathies of the CEE societies (see Kreile 1997: 236; Sedelmeier 2000: 178). Rhetorical entrapment worked similarly at the Community level. Here, the Commission, in particular Commissioner Andriessen and, later on, van den Broek, played the most active role. 58 Already during the association negotiations the Commission went beyond its directives by inserting into the preamble of the draft agreements that ‘in the view of the parties these agreements will help this

The community trap 165 objective’, that is, accession. None of the member states formally objected to this unauthorized move (see Sedelmeier 2000: 175). In a similar coup, the Commission’s report to the Lisbon Summit ‘talked almost in a matter of fact way about accession as if it was already agreed as a common objective’ (Mayhew 1998: 25). The fact that the report was simply attached to the Conclusions of the Presidency at the Lisbon Council, ‘barely discussed’ at the Edinburgh Summit in December of the same year, and ‘hardly discussed by the Member States and certainly not disputed in the many hours of discussion and negotiation’ leading up to the Copenhagen Summit indicates that silencing was effective (ibid.: 25–7). The Community’s commitment to the objective of enlargement, and the ‘brakemen’s’ consent in particular, was certainly facilitated by the symbolic quality of this commitment at the beginning and by the expectation that it would not have to be honoured for a long time. However, each concession to the membership aspirations of the CEECs, from the very reluctant acknowledgment of these aspirations in the Europe Agreements via the general agreement to expansion at the Copenhagen Summit, to the pre-accession preparations decided in Essen, created a stronger commitment to enlargement – even if it was intended to be nothing but a tactical concession to accommodate the CEE states. Once the decision to enlarge was made, each further step of preparation towards the opening of accession negotiations was presented as a logical follow-up to this decision and difficult to oppose. So the ‘brakemen’ turned to the accompanying negotiations on treaty and policy reform in order to pursue their interests and retrieve some of their expected losses. This led to one of the most conspicuous features of the enlargement decisionmaking process. It is reflected in Mayhew’s observation at various European Council summits that, ‘while there was little discussion or dispute on the common objective of accession, the minor trade concessions proved very difficult to negotiate’ (Mayhew 1998: 64), and in the fact that the enlargement process gathered momentum and was kept on track at the same time that the process of internal reform was delayed. It did not meet the objective of preparing the EU for the accession of the CEECs either at the intergovernmental conference leading to the Treaty of Amsterdam or at the Berlin summit on the Agenda 2000. As a result of rhetorical entrapment, the policy of eastern enlargement was safely locked in and effectively shielded from the ‘fallout’ of the tough bargaining on internal reforms. Finally, liberal membership norms and rhetorical action played an important role in the selection of CEE states for the accession negotiations. In order to justify its differentiation among the CEECs, the Commission made every effort to present its Opinions on the applicants as an objective, neutral application of the normbased Copenhagen criteria which left it ‘without a margin of political or geostrategic assessment’.59 However, as the Commission’s proposal strongly favoured the Central European countries, most Northern and Southern member states were not satisfied with it. In order to change this proposal, Denmark, Italy and Sweden did not bring up their national interests but acted rhetorically. They put forward an impartial argument that was both suitable to cover up the divergent subregional interests of their coalition and justifiable on the basis of the Community values and norms: the EU should open accession negotiations with all associated countries at

166 Frank Schimmelfennig the same time in order not to create a new division of Europe and discourage democratic consolidation in the ‘pre-ins’. Minister Dini (Italy) pointed to ‘the responsibilities’ of the EU towards the ‘countries excluded’, minister Lund (Sweden) appealed to the EU not ‘to let the chance of establishing pan-European cooperation go by’, and minister Petersen (Denmark) warned the members ‘not to create new frontiers’.60 In the analysis of Lykke Friis, these arguments gained support not because of Italian–Scandinavian bargaining power but because they ‘appeared more legitimate. These countries were [. . .] able to link their frame back to the core of the EU’s self-image – the very fact that the EU has always presented itself as a club for all Europeans’ (Friis 1998: 7). In the end, the accession process was formally opened with all associated CEECs.

Conclusion In this chapter, I have analysed the decision of the EU to expand to Central and Eastern Europe from the theoretical vantage point of the current IR debate between ‘rationalism’ and ‘constructivism’. Both theoretical perspectives were found wanting in their ‘pure’ form: whereas rationalism could explain most actor preferences and much of their bargaining behaviour, it failed to account for the collective decision of enlargement. Sociological institutionalism, in turn, could explain the outcome but not the input. In order to provide the missing link between egoistic preferences and a norm-conforming outcome, I introduced ‘rhetorical action’, the strategic use of norm-based arguments. In the institutional environment of the European Union, the supporters of enlargement were able to justify their preferences on the grounds of the community’s traditional panEuropean orientation and its liberal constitutive values and norms and to shame the ‘brakemen’ into acquiescing in enlargement. By argumentatively ‘entrapping’ the opponents of a firm EU commitment to eastern enlargement, they thus brought about a collective outcome that would not have been expected as the result of the constellation of power and interests. ‘Rhetorical action’ provides one way of disentangling rational choice and ontological materialism and theorizing the context conditions of strategic action, as suggested in recent reviews of the rationalism–constructivism debate.61 In the institutional environment of an international community, state actors can use the community identity, values and norms strategically in order to justify and advance their self-interest. On the other hand, however, strategic behaviour is constrained by the constitutive ideas of the community and the actors’ prior identification with them. Once caught in the community trap, they can be forced to honour identityand value-based commitments in order to protect their credibility and reputation as community members.

Notes 1 This chapter is the slightly adapted version of an article that first appeared under the same title in International Organization, 55(1): 47–80.

The community trap 167 2 In this article, I use ‘European Union (EU)’ or ‘the Community’ whenever I refer to the organization in general or to current events. I use ‘European Community (EC)’ for events before 1994. 3 The article does not deal with the decision of December 1999 to extend the accession negotiations to the remaining five associated CEECs (formally opened in February 2000). 4 Given that enlargement is covered by the assent procedure, even Garrett and Tsebelis, who are otherwise critical of intergovernmentalism, concede that ‘it is reasonable to conceive of decision making in terms of the Luxembourg compromise period’ (Garrett and Tsebelis 1996: 283). 5 There is no room here for a detailed description of these preferences. My information is based on several largely mutually corroborative sources. See Friis and Murphy (1999: 225); Grabbe and Hughes (1998: 4–6); Holvêque (1998); IEP (1998). In order to exclude effects of the negotiation process on the stated preferences as far as possible, preferences on the general commitment to enlargement were ascertained before 1993 (except for the 1995 entrants), those on the inclusiveness of negotiations before 1997. 6 See Keohane and Nye (1977: 12–159) on ‘sensitivity interdependence’. 7 Financial Times (15 September 1997), 2; IEP (1998). 8 Eurostat data, reported in Weekly Europe Selected Statistics, 1037 (12 January 1998). 9 German trade with Central and Eastern Europe comes to 9 per cent of its total trade, whereas that with its EU partners accounts for well over 50 per cent (my calculation based on Statistisches Jahrbuch für die Bundesrepublik Deutschland 1998). 10 For a comprehensive analysis of the EU’s association policy in different sectoral domains, see Sedelmeier (1998). 11 Agence Europe, 5562 (7 September 1991): 8; 5563 (9–10 September 1991): 9; Torreblanca (1997: 40–41). 12 Agence Europe, 6079 (6 October 1993): 8. 13 I use ‘sociological’ as the generic term for a variety of approaches in order to stress their departure from ‘economic’ conceptions. Keohane (1988) distinguishes ‘rationalist’ and ‘reflective’ approaches. Ruggie (1998) draws the conceptual line between ‘neoutilitarianism’ and ‘social constructivism’. 14 See Scott (1991: 167) for the distinction of ‘technical’ and ‘institutional’ environments in organization theory and Weber (1994) for an application to the analysis of international organizations. 15 The requirement of being ‘European’ restricts the liberal identity that is cosmopolitan in principle. The EU, however, follows a rather wide concept of ‘Europe’ (e.g., including Turkey) and refuses to define clearly where ‘Europe’ ends. 16 Slovakia was rated ‘free’ in 1994–5 and 1995–6 but downgraded in 1996–7. 17 Neither Romania nor Slovakia were ‘free’ countries when they became associated with the EU. 18 A cross-check with Polity data (last column in table 7.3) reveals roughly the same picture, including the observation that, on the basis of democratic merits, Lithuania rather than Estonia should have been invited to accession talks. 19 I thank the editors of International Organization for alerting me to this point. 20 See Scott (1995: 34–52) for an overview of the normative and cognitive perspectives on institutional impact. 21 I thank the reviewers for helping me to clarify the theoretical relationship between collective identity and egoistic preferences on which my argument is based. 22 For such standards in international society, see Gong (1984). 23 This corresponds to what Scott (1995: 35–7, 50–51) calls the ‘regulative’ conception of institutions in contrast with the ‘normative’ and ‘cognitive’ conceptions. 24 See Elster (1992) on arguing versus bargaining. 25 See Toulmin et al. (1979) for the terminology of ‘warrants’ and ‘backings’. 26 Schimmelfennig (1995, 1997). See Gusfield (1981) for a more general rhetorical

168 Frank Schimmelfennig

27 28

29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46

47 48 49 50 51 52 53 54 55 56 57 58

59 60 61

perspective on political action. ‘Rhetorical’ action differs from ‘communicative’ action (Habermas 1981) insofar as rhetorical actors do not engage in a ‘cooperative search for truth’ but seek to assert their own standpoint and ‘are not prepared to change their own beliefs or to be persuaded themselves by the “better argument”’ (Risse 2000: 8). See Elster (1989b: 215) on the effects of norms on collective wage bargaining. See Standard Eurobarometer, 38/1992, fig. 5.2; 42/1994, fig. 6.2.; 45/1996, figs 4.4 and 4.5. Only the admission of Hungary and Poland gained the support of more than half of those asked in the member countries. Interestingly, public scepticism in such pro-enlargement countries as Austria and Germany has been among the highest in the entire EU. See Johnston (1999: 21) and, for an application, Moravcsik (1995) on the European human rights regime. I thank one of the reviewers for suggesting the term of ‘silencing’ to me. Resolution of the Congress of Montreux of the Union Européenne des Fédéralistes (UEF), August 1947. This resolution and others are collected in Schwarz (1980). Preamble of the EEC Treaty (emphasis added). Speech before the ‘European Movement’, 20 January 1968, quoted in Schwarz (1980: 415). See also Fierke and Wiener (ch. 5 this volume) on the role of Cold War ‘promises’ in the enlargement process. Conclusions of the Presidency. See the Conclusions of the Rhodes Summit (June 1988) and the Dublin Summit (June 1990) for similar statements. Agence Europe, 6204 (6 April 1994): 3. Agence Europe, 6065 (16 September 1993): 5. Agence Europe, 5456 (21 March 1991): 4. FBIS-EEU-90–081, 26 April 1990, 46; Süddeutsche Zeitung (30 March 1999), 45. FBIS-EEU-90–081, 26 April 1990, 46. Agence Europe, 5827 (2 October 1992): 7. Agence Europe, 6204 (6 April 1994): 3; Saryusz-Wolski (1994: 21). Europe Documents, 1874 (16 March 1994): 3. Bulletin, 114 (27 September 1990): 1193–7. Business Week (3 February 1997), 18. Financial Times (6 August 1990), 3. However, she also enlisted the CEECs for her own agenda: ‘They have not thrown off central command and control in their own countries only to find them reincarnated in the European Community.’ Agence Europe, 5206 (3 March 1990): 5. Agence Europe, 5566 (13 September 1991): 13. Agence Europe, 5549 (21 August 1991): 2. Financial Times (21 August 1991), cited in Ham (1993: 198). Agence Europe, 5564 (11 September 1991): 10. Agence Europe, 6094 (27 October 1993): 10. See also Risse et al. (1999) for examples of rhetorical entrapment in human rights debates. Agence Europe, 7058 (15–16 September 1997): 2. Ibid. Financial Times (6 August 1990), 3. Agence Europe, 5568 (16–17 September 1991): 7. The Commission was united neither on its enlargement advocacy nor on its selection of candidates for the first round of negotiations, but both Andriessen and van den Broek managed to gain a majority for their proposals in the college of Commissioners (Torreblanca 1997: 468; author’s interview with member of van den Broek’s cabinet, 20 May 1999). Agence Europe, 7019 (18 July 1997): 9. Agence Europe, 7021 (22–3 July 1997): 8–9. See Finnemore and Sikkink (1998: 910); DiMaggio (1998: 701) and other contributions to the same issue of the Journal of Institutional and Theoretical Economics.

The community trap 169

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170 Frank Schimmelfennig Inotai, A. (1998) ‘The CEECs: From the Association Agreements to Full Membership’, in J. Redmond and G. G. Rosenthal (eds), The Expanding European Union: Past, Present, Future. Boulder, CO: Lynne Rienner, 157–76. IEP (Institut für Europäische Politik) (in cooperation with Trans European Policy Studies Association) (1998) Enlargement/Agenda 2000 – Watch: Pilot Issue, http://www.tepsa.be. Johnston, A. I. (1999) ‘Treating Institutions as Social Environments: The Role of Persuasion and Social Influence in Eliciting Cooperation’. Paper presented at the International Studies Association Convention, Washington, DC. Karatnycky, A., Motyl, A., and Shor, B. (eds) (1997) Nations in Transit 1997: Civil Society, Democracy and Markets in East Central Europe and the Newly Independent States. New Brunswick, NJ: Transaction. Katzenstein, P. J. (1997) ‘United Germany in an Integrating Europe’, in P. J. Katzenstein (ed.), Tamed Power: Germany in Europe. Ithaca, NY: Cornell University Press, 1–48. Katzenstein, P. J., Keohane, R. O., and Krasner, S. D. (eds) (1999) Exploration and Contestation in the Study of World Politics. Cambridge, MA: MIT Press. Kawecka-Wyrzykowska, E. (1996) ‘On the Benefits of the Accession for Western and Eastern Europe’, in L. Ambrus-Lakatos and M. E. Schaffer (eds), Coming to Terms with Accession. London: CEPR, 85–107. Keohane, R. (1988) ‘International Institutions: Two Approaches’, International Studies Quarterly, 32: 379–96. Keohane, R. O., and Nye, J. S., Jr. (1977) Power and Interdependence: World Politics in Transition. Boston, MA: Little, Brown. Kreile, M. (1997) ‘Eine Erweiterungsstrategie für die Europäische Union’, in W. Weidenfeld (ed.), Europa öffnen: Anforderungen an die Erweiterung. Gütersloh: Verlag Bertelsmann Stiftung, 203–72. Kumar, A. (1996) ‘The CEE Countries’ Aspirations for Enlargement’, in L. AmbrusLakatos and M. E. Schaffer (eds), Coming to Terms with Accession. London: CEPR, 42–84. Lipgens, W. (1982) A History of European Integration, 1945–1947. Oxford: Oxford University Press. March, J. G., and Olsen, J. P. (1989) Rediscovering Institutions: The Organizational Basis of Politics. New York: Free Press. Martin, L. L. (1993) ‘The Rational State Choice of Multilateralism’, in J. G. Ruggie (ed.), Multilateralism Matters: The Theory and Practice of an International Form. New York: Columbia University Press, 91–121. Mayhew, A. (1998) Recreating Europe: The European Union’s Policy towards Central and Eastern Europe. Cambridge: Cambridge University Press. Michalski, A., and Wallace, H. (1992) The European Community and the Challenge of Enlargement. London: Royal Institute of International Affairs. Moravcsik, A. (1993) ‘Preferences and Power in the European Community: A Liberal Intergovernmentalist Approach’, Journal of Common Market Studies, 31: 473–524. Moravcsik, A. (1995) ‘Explaining International Human Rights Regimes: Liberal Theory and Western Europe’, European Journal of International Relations, 1: 157–89. Moravcsik, A. (1998) The Choice for Europe: Social Purpose and State Power from Messina to Maastricht. London: UCL Press. Nee, V., and Strang, D. (1998) ‘The Emergence and Diffusion of Institutional Forms’, Journal of Institutional and Theoretical Economics, 154: 706–15. Neumann, I. B. (1998) ‘European Identity, EU Expansion, and the Integration/Exclusion Nexus’, Alternatives, 23: 397–416. Owen, J. M. (1994) ‘How Liberalism Produces Democratic Peace’, International Security, 19: 87–125.

The community trap 171 Reus-Smit, C. (1997) ‘The Constitutional Structure of International Society and the Nature of Fundamental Institutions’, International Organization, 51: 555–89. Richter, P. (1997) Die Erweiterung der Europäischen Union: unter besonderer Berücksichtigung der Beitrittsbedingungen. Baden-Baden: Nomos. Risse, T. (2000) ‘“Let’s Argue!” Communicative Action in World Politics’, International Organization, 54: 1–39. Risse, T., Ropp, S. C., and Sikkink, K. (1999) The Power of Human Rights: International Norms and Domestic Change. Cambridge: Cambridge University Press. Ruggie, J. G. (1993) ‘Multilateralism: The Anatomy of an Institution’, in J. G. Ruggie (ed.), Multilateralism Matters: The Theory and Practice of an International Form. New York: Columbia University Press, 3–47. Ruggie, J. G. (1998) Constructing the World Polity: Essays on International Relations. London: Routledge. Saryusz-Wolski, J. (1994) ‘The Reintegration of the “Old Continent”: Avoiding the Costs of “Half Europe”’, in S. Bulmer and A. Scott (eds), Economic and Political Integration in Europe: Internal Dynamics and Global Context. Oxford: Blackwell, 19–28. Schimmelfennig, F. (1995) Debatten zwischen Staaten: eine Argumentationstheorie internationaler Systemkonflikte. Opladen: Leske & Budrich. Schimmelfennig, F. (1997) ‘Rhetorisches Handeln in der internationalen Politik’, Zeitschrift für Internationale Beziehungen, 4: 219–54. Schwarz, J. (ed.) (1980) Der Aufbau Europas: Pläne und Dokumente 1945–1980. Bonn: Osang. Scott, W. R. (1991) ‘Unpacking Institutional Arguments’, in W. W. Powell and P. J. DiMaggio (eds), The New Institutionalism in Organizational Analysis. Chicago, IL: University of Chicago Press, 164–82. Scott, W. R. (1995) Institutions and Organizations. Thousand Oaks, CA: Sage. Sedelmeier, U. (1998) ‘The European Union’s Association Policy towards the Countries of Central and Eastern Europe: Policy Paradigms and Collective EU Identity in a Composite Policy’. PhD dissertation, University of Essex. Sedelmeier, U. (2000) ‘Eastern Enlargement: Risk, Rationality, and Role-Compliance’, in M. G. Cowles and M. Smith (eds), The State of the European Union, vol. 5: Risk, Reform, Resistance and Revival. Oxford: Oxford University Press, 164–85. Sedelmeier, U., and Wallace, H. (1996) ‘Policies Towards Central and Eastern Europe’, in H. Wallace and W. Wallace (eds), Policy-Making in the European Union. 3rd edn, Oxford: Oxford University Press, 353–87. Tangermann, S. (1995) ‘Osterweiterung der EU: wird die Agrarpolitik zum Hindernis?’, Wirtschaftsdienst, 75: 484–91. Torreblanca, J. I. (1997) The European Community and Central Eastern Europe (1989–1993): Foreign Policy and Decision-Making. Madrid: Centro de Estudios Avanzados en Ciencias Sociales. Toulmin, S., Rieke, R., and Janik, A. (1979) An Introduction to Reasoning. New York: Macmillan. Védrine, H. (1996) Les mondes de François Mitterrand: à l’Elysée 1981–1995. Paris: Fayard. Weber, S. (1994) ‘Origins of the European Bank for Reconstruction and Development’, International Organization, 48: 1–38. Weise, Christian, et al. (1997) Ostmitteleuropa auf dem Weg in die EU – Transformation, Verflechtung, Reformbedarf. Berlin: Duncker & Humblot. Zürn, M. (1992) Interessen und Institutionen in der internationalen Politik: Grundlegung und Anwendung des situationsstrukturellen Ansatzes. Opladen: Leske & Budrich.

8

Liberal community and enlargement An event history analysis Frank Schimmelfennig

Introduction What drives the enlargement of European organizations? When do outsider states enter into institutionalized relationships with these organizations and when do they apply for membership? Under which conditions are they invited to join? And when are members excluded or suspended? This chapter presents a statistical analysis of the major enlargement events of the European Union (EU), NATO and the Council of Europe (CoE) that seeks to answer these questions.1 The study is designed to examine the ‘liberal community hypothesis’ about enlargement. This hypothesis is based on the assumption that regional organizations represent international communities of values and norms. Correspondingly, their enlargement will depend on whether outside states identify themselves with, and adhere to, the constitutive values and norms of the community. In this perspective, European regional organizations represent a liberal community sharing liberal norms of domestic and foreign policy conduct. I therefore hypothesize that the more a state adheres to these norms, the more likely it will enter into institutionalized relations with, apply for membership in, and be admitted to these organizations. Conversely, associated or member states that violate these liberal norms systematically will be excluded or withdraw from the organizations. In order to test the liberal community hypothesis, I examine how the relations between European states (defined as members of the Organization for Security and Cooperation in Europe, OSCE) and the three major Western European organizations (EU, NATO, CoE) have developed from their foundation through 1999. The research design I use is event history analysis. I analyse four kinds of events related to the enlargement process – the establishment of institutionalized relations between the organization and an outsider state, the application for membership, the start of accession negotiations, and exclusion or withdrawal from the organization. The influence of liberal norms on the occurrence of these events is controlled for cultural, geographic and economic factors as well as institutional effects and time-dependency. The paper deliberately moves beyond the predominant single-event or singleorganization design in enlargement research and seeks to explore the potential of large-n, statistical analysis. Its main purpose is to examine whether the identity-

Liberal community and enlargement 173 and norm-based explanations of EU eastern enlargement can be generalized (Schimmelfennig ch. 7 this volume; Sedelmeier ch. 6 this volume). Its central results corroborate the liberal community hypothesis about enlargement: compliance with democratic standards is the only variable that is robustly significant across different organizations, events and time periods.

Enlargement and international community: the theoretical argument This chapter starts from a constructivist theory of international institutions (see Schimmelfennig and Sedelmeier ch. 1 this volume). According to this theory, international interactions take place in an institutional environment; the social identities, values and norms that constitute this environment shape the outcomes of these interactions.2 In this view, international organizations are ‘community representatives’ (Abbott and Snidal 1998: 24) and community-building agencies. Their goals and procedures are shaped by the values and norms of the international community they represent.3 Correspondingly, enlargement is valueand norm-driven. States that share the collective identity and have adopted the values and norms of an international community will also seek to become members of the organizations that represent it. The international organizations, in turn, will admit those states that have adopted the community values and norms and are therefore regarded as legitimate members. Conversely, states that deviate from the community standard of legitimacy will be expelled from or leave the community organizations. In sum, the extension of a regional organization will tend to be congruent with the extension of the international community on which it is based. The main European regional organizations, the EU, NATO and the CoE, represent the European (or, in the case of NATO, ‘Euro-Atlantic’) international community of liberal values and norms. Liberal human rights are the fundamental values and norms of this community. In the domestic sphere, the liberal principles of social and political order – social pluralism, the rule of law and democratic political participation and representation, as well as private property and a marketbased economy – are derived from and justified by these liberal human rights. In the international sphere, the liberal order is characterized by the democratic peace (Owen 1994) and multilateralism (Ruggie 1993; Reus-Smit 1997: 577), both based on liberal norms externalized from the domestic sphere. Consequently, it is the basic hypothesis of this study that the enlargement of European organizations depends on the distribution and the spread of liberal values and norms among the European states. The corresponding null hypothesis is that compliance with liberal norms has no significant influence on the relationship of European states with the CoE, the EU and NATO. There are two main competitors to this ‘liberal community hypothesis’. First, other ideational factors may be more important than liberal norms. The major alternative can be termed the civilization hypothesis and is based on Samuel Huntington’s proposition that European regional organizations rest ‘on the shared

174 Frank Schimmelfennig foundation of European culture and Western Christianity’ (Huntington 1993: 27). Correspondingly, Slavic-Orthodox and Islamic countries will not qualify for membership in these organizations (even if they are liberal states and lie in Europe). Second, material factors may be considered to determine the extension of international organizations. According to the material interests hypothesis, typical of the economic analysis of regionalism, enlargement depends on the material cost– benefit calculations of both member and external states. International organizations expand their membership if, for both the member states and the external state, the marginal benefits of enlargement exceed the marginal costs and, in addition, if the marginal benefits of enlargement exceed the benefits of other forms of institutional relationships between the organization and the external state.4 Thus, liberal states will not seek membership and will not be admitted to the organizations if their membership does not also produce net marginal material benefits for themselves and for the members of the organization. Although it is not the purpose of this chapter to test these competing hypotheses directly, cultural and material factors are included in the analysis as control variables.

Enlargement events: the dependent variables I seek to explain the occurrence (and absence) of four major events related to the enlargement process: institutionalization, application, accession and exclusion. The data for these events are taken from the Enlargement Database (ENLABASE).5 It contains the dates of membership applications for the CoE and the EU – NATO has no formal application procedure – and annual data on the relationship of each state of the OSCE region with the CoE, the EU, and NATO from the establishment of these organizations (in 1949 and 1958, respectively) through 1999. The database is limited to the OSCE states because other states may enter into institutionalized relations but do not stand any chance of becoming members of (at least one) of the three organizations.6 The annual data points measure the status of each state with each organization on 31 December.7 The status is coded according to an ordinal scale reaching from ‘no special status’ to ‘full membership’.8 Four status grades are of interest for this analysis. Institutionalization The first event in the enlargement process broadly defined is the establishment of special institutional relations between the organization and an outsider state. Technically, it is indicated by the first time the status code reaches a value higher than zero. It requires at least the negotiation of a trade agreement with the EU and observer status in NATO’s Euro-Atlantic Cooperation Council or the Parliamentary Assembly of the CoE. Application The application for membership is used as the indicator for a state’s desire to join the organization. Although this indicator is reliable and easy to measure, two problems must be kept in mind. One is the fact that, in NATO, there is no formal application procedure at the beginning of the enlargement process. Candidates are invited by the organization. The other

Liberal community and enlargement 175 problem is that states may want to become members long before they formally apply because they wait for favourable circumstances. Accession Accession is the most important event in the enlargement process. However, just as ‘application’ is used as an indicator for the principal decision of a state to join the organization, the variable of interest here is the principal decision of the organization to admit this state. In the EU and in NATO, this decision is made before accession negotiations start. I therefore use the beginning of negotiations and not accession itself as the indicator event.9 In the CoE, the accession procedure begins almost automatically after an application for membership. The decision to enlarge is made at the end of a sometimes lengthy examination of the candidate. For this reason, the signing of the organization’s Statute, which occurs shortly after the positive decision of the organization, is the most valid indicator. Exclusion An organization may also shrink as the result of the exclusion or withdrawal of a member state. Because this is a very rare event, I include those cases in which membership has been frozen or in which the associate status of a non-member state has been cancelled or suspended. Still, there are only nine cases of exclusion in the dataset.

Event history analysis: the research design Because of the structure of the data and the quality of the dependent variables, event history analysis (EHA) is the most suitable design for the statistical analysis of the enlargement process.10 EHA deals adequately with pooled data as well as time dependence and, as the name implies, is specifically designed to analyse events, that is, ‘qualitative changes that occur at a specific point in time’ (Allison 1984: 9). Conventional linear or logistic regression is not only a problematic tool for the analysis of pooled data, but the static model on which it is based neglects both time-dependent co-variates and ‘censoring’, that is, events that have not occurred during the period of investigation (see Box-Steffensmeier and Jones 1997: 1415–17). Technically speaking, EHA is used to study ‘the duration for the nonoccurrence of an event’ (Yamaguchi 1991: 3). Because of the origins of EHA in medical and engineering research, this duration is called the ‘risk period’. As to enlargement, the risk period for external states begins with the establishment of the international organization (or with the establishment of the external state if it became independent after the organization was founded). All states that have not yet had the event in question at a given time are defined as the ‘risk set’ of that time. When the event occurs, a state drops out of the risk set and of the sample of states to be analysed. For the ‘institutionalization’ event, the risk set comprises all states that have not entered into special institutional relations with the organization; for ‘application’, it is the set of states that have not applied for membership. The risk set for ‘accession’ is the class of non-member states that have not yet begun accession negotiations, and, for ‘exclusion’, it comprises all associated and member states.

176 Frank Schimmelfennig Event history models first specify a ‘transition rate’ which determines the baseline likelihood of a unit to have the event at a given time regardless of any independent variables. However, I am not interested in the transition rate per se but focus on how it is affected by external factors that increase or reduce the likelihood of an enlargement event to occur. Event history models come in two basic variants: discrete-time and continuous-time models. For substantial and methodical reasons, I examine enlargement events with a discrete-time model. Discrete-time models are based on the assumption that ‘the event of interest occurs only at discrete time-points’ (Yamaguchi 1991: 15). This assumption holds for the most relevant events in the enlargement process. In general, international organizations make decisions about the beginning of accession negotiations or the admission of new member states at fixed, predetermined dates (for instance, the regular meetings of the heads of governments and states). Treaties with external states enter into force on 1 January or, at least, on the first day of a month. Thus, there is always a real (not just an observation) interval between two subsequent enlargement events of the same kind. Moreover, the most popular continuoustime model, the Cox proportional hazards model, leads to biased parameter estimates when several units experience an event at the same time. This is often the case in the enlargement process, for instance, when agreements with external states enter into force at the same date or outsider states jointly begin accession negotiations. Finally, the data for most independent variables of interest are only measured annually so that it would not be possible to analyse smaller time intervals adequately. Discrete-time models in EHA are most often formulated as logit models and estimated using binary logistic regression programs.11 This is because the dependent variable is dichotomous: either the event has occurred at a given time (1) or not (0).

Independent variables The independent variables presumed to increase or decrease the likelihood of enlargement events can be subdivided into five blocs: test variables (liberal norms), cultural control variables, material control variables, institutional factors, and time-dependence. Table 8.1 gives an overview of the variables, the theoretical concepts they are intended to measure and the sources used. Test variables The test variables are indicators for the compliance with liberal norms postulated by the liberal community hypothesis as the main set of enlargement conditions. Domestic compliance with liberal norms is measured with the POLITY indicator built by subtracting a state’s autocracy score from its democracy score according to the Polity database. Both the democracy and autocracy scores are derived from codings of the competitiveness and openness of executive recruitment, constraints on the chief executive, and competitiveness and regulation of political participation.12

Liberal community and enlargement 177 Table 8.1 Independent variables Name

Indicator for

Test variables (liberal norms) POLITY Compliance with domestic liberal norms

NEUTR MIDS

Compliance with multilateralist norm Compliance with norm of peaceful conflict management

Cultural control variables CIV Cultural identity EURO

Definition of ‘Europe’

Calculation

Source

Democracy score minus autocracy score of the POLITY database (+10 to –10) Neutrality status (yes/no) Cumulated participation in militarized interstate disputes divided by number of years in the period of observation

POLITY IV http://www.bsos. umd.edu/cidcm/ polity Own research

Civilization according to Huntington Location of a state in Europe narrowly or broadly defined

Huntington (1993)

Material control variables (general) GDPTOT Economic output, GDP at market prices in US$ resources GNPCAP Economic development, GNP per capita wealth GROWTH Economic performance Increase in GDPTOT since previous year PROX Geopolitical relevance Politico-geographical and international proximity (number of borders interdependence between organization and external state) Material control variables (specific) AGRIC Strength of the agricultural sector EDUC Level of education

DEFEXP

Military resources

Share of agricultural production of total GDP Secondary-level school enrolment in percentage of the eligible population Defence expenditures in US$

DEFCAP

Military commitment

DEFEXP per capita

Institutional variables REL Institutional dynamics

APP#, ACC#

Influence of earlier events

Temporal variables INST, APPT, Time dependence ACCT, EXCT

MID database http://pss.la.psu.edu

Own definition

World Bank, UN Statistical Yearbook World Bank, UN Statistical Yearbook, own calculation Own calculation

World Bank World Bank

IISS Military Balance IISS Military Balance

Existence of institutional ENLABASE relations before application or accession (yes/no) Repeated application, accession (negotations) (yes/no) Number of years in risk ENLABASE, period for institutionalization, own calculation application, accession and exclusion

178 Frank Schimmelfennig In order to measure a state’s compliance with the norm of peaceful conflict management, I used the Militarized Interstate Disputes database and calculated an annual dispute participation score (MIDS ) by cumulating the number of disputes in which the state has participated since 1948 (the beginning of the period of observation) and then dividing it by the number of years that have passed since 1948 (or the independence of the state). Note, however, that this a relatively crude measure because hostility or fatality levels were not taken into account. It is based, furthermore, on a strict interpretation of the liberal non-violence norm because the norm is taken to apply to relations with all other states (and not only with other democratic states). It proved most difficult to find adequate data for measuring compliance with the multilateralist norm. In order to avoid tautological reasoning, I discarded any indicator based on the number of memberships and the quality of participation in international organizations. The alternative used here is the dummy variable NEUTR, a distinction between neutral and non-neutral states which serves as an indicator for an isolationist or multilateralist basic foreign policy orientation. Nonneutrality, however, covers only one aspect of multilateralism. There are countries such as Sweden that pursue a policy of non-alignment in security affairs but are otherwise strongly engaged in multilateral international policy-making. Thus, I claim to test the effect only of neutrality, not of adherence to multilateral norms in general.13 The hypothesis to be tested is: The higher the POLITY value, the lower the MIDS value, and if NEUTR equals 0, the more likely a state will be to enter into institutional relations with the Western organizations, apply for membership, and be admitted (to accession negotiations), and the less likely it will be excluded or withdraw from the organization. Control variables Cultural control variables First, to control for the rival civilization hypothesis, the European states are categorized according to Huntington’s classification into Western, Slavic-Orthodox and Islamic states (CIV ). Second, the analysis takes into account that, while all three organizations restrict enlargement to ‘European’ countries, Europe is a construction without objective, natural borders. Therefore, enlargement may be affected by the way in which Europe is defined. The liberal community hypothesis posits that Europe is defined by the spread of liberal values and norms in the OSCE area. The dummy variable EURO indicates a more narrow definition of Europe, excluding Central Asian, Transcaucasian and North American states, Russia and Turkey. Material control variables The general material control variables consist of three standard economic indicators and one geographical measure. The economic indicators are total economic output (GDPTOT ), economic output per capita (GNPCAP ) and economic growth

Liberal community and enlargement 179 (GROWTH ). These indicators cover different aspects of the economies of the states in the risk set – their size, the level of development and wealth, and their performance dynamics. The geographical proximity indicator (PROX ) is an ordinal-scale proxy variable for geopolitical relevance and international interdependence. It is assumed that both factors decrease with growing distance between the organization and the state and that, therefore, proximity will increase the likelihood of institutionalization, application and accession. The distance is not measured in kilometres but by the kind and number of borders between the organization and the outsider state.14 In addition, I included organization-specific material control variables in the analysis. In the EU case, these variables are the strength of the agricultural sector of the economy (AGRIC ) and the level of education (EDUC ) in a given state. The share of the agricultural sector of a state’s total economy is important because of the dominance of agricultural expenditure in the Community budget. Supposedly, the higher this share the greater the incentive for a state to join the EU but the greater the reluctance of the Community to admit this state. EDUC is a general indicator for the ‘modernity’ of the state and, in particular, for the qualification of its workforce. Here, I assume that the level of secondary school enrolment is positively correlated with both the external state’s and the Community’s interest in closer ties.15 In the NATO case, data on total military expenditures (DEFEXP ) and military expenditures per capita (DEFCAP ) were added to the set of control variables.16 Since the CoE does not provide material club goods, no specific material control variables were specified. Institutional variables The inclusion of institutional variables serves to control for the momentum that may be created by previous institutionalization and enlargement events. First, it may be that the existence of special institutional relations between the organization and a non-member state (REL) will, by itself, increase the likelihood of future applications and accession. Second, it may be that earlier (failed) applications or accession negotiations will influence the probability of later applications and accession negotiations (APP# and ACC#). Temporal variables In order to control for time dependence, a set of dummy variables (INST, APPT, ACCT, EXCT ) was added to the specified logit models. They measure the amount of time a state has spent in the risk set for each event of interest.17 Finally, note that the main purpose of the event history analysis is to test whether liberal norms have a significant influence on the enlargement of Western organizations. The other variables serve mainly as controls; it is not the goal of the statistical analysis to evaluate competing theories, hypotheses or explanatory factors.

180 Frank Schimmelfennig

Models and statistics: technical information Missing data of some variables for certain time periods is a serious problem for EHA. For instance, whereas the general economic data were not available before 1960, the militarized interstate dispute data end with 1992. In order to maximize use of the available data, I specified four models for the analysis of each event. Models 1 include the test variables (plus controls for time-dependence as well as institutional momentum). They cover the period until 1992 (because MIDS data are not available for the remainder of the 1990s). Models 2 add the cultural control variables. They are available for the entire period of investigation (1948–99). In order to be able to analyse the whole period, MIDS is dropped. In turn, PROX is added. Models 2 thus maximize the period of investigation and include all variables for which the necessary data are available. Models 3 add and focus on the general material control variables. For most of the countries, these data range from 1960 to 1998. At the expense of excluding the foundational period of the organizations, models 3 thus include all general variables except MIDS and thus maximize the number of variables. Models 4 are designed to analyse the influence of the organizationspecific material variables for the EU and NATO. In the EU case, this results in a shortening of the actual period of examination; it reaches from around 1975 to around 1996 depending on the availability of the data. As a side effect, this modelling strategy makes it possible to test the robustness of the correlations, that is, their statistical significance across models. It allows us to detect to what extent the significance of a given coefficient depends on the constellation of variables or on the time period under investigation. The main results of the binary logistic regression analysis for each model can be found in the tables shown in the following sections.18 The row ‘model’ provides information on model significance (Menard 1995: 19– 24). G(M) is a measure of statistical significance for the entire model.19 The following figure gives the percentage of cases that are classified correctly on the basis of the multivariate model. Note, however, that the statistics of model significance are of secondary importance because it is the goal of the analysis not to find the best model for the explanation or prediction of enlargement events but to test the liberal community hypothesis. For each independent variable included in the model, the tables show the unstandardized logistic regression coefficients (β), their standard errors (S.E.) and a likelihood ratio test (G(X) and p).20 G(X) represents the difference between G(M) and the –2LL for the model without the independent variable in question, while p indicates the statistical significance of G(X).21 The signs of the regression coefficients are changed in some cases to improve readability: positive signs always indicate a direction of the relationship between independent and dependent variable that is in line with the hypothesis. Also note that the coefficients are unstandardized: since they are based on different units of measurement, their relative strength cannot be assessed directly. The main interest is in statistical significance: is it justified to reject the null hypothesis that liberal norms do not systematically affect the enlargement events of the major Western organizations?22

Liberal community and enlargement 181

Discussion of results: events The presentation and discussion of the results of the event history analysis will be divided into two sections, one focusing on the four enlargement events, the other on the (groups of ) independent variables. Institutionalization Which variables have a significant influence on the establishment of institutionalized relationships between the Western organizations and non-member countries? From the results of the statistical analysis, it appears that domestic compliance with fundamental liberal norms as measured by the POLITY indicator is the most robust explanatory factor. With the exception of the most specific model, (4), POLITY coefficients are statistically significant and positive across all models and organizations. Thus, in accordance with the liberal community hypothesis, the liberal democratic quality of national political systems seems to have mattered for the relationship between the Western organizations and outsider states even at this low institutional level. The record for the other two test variables is mixed: whereas neutrality – unsurprisingly – has been a highly significant obstacle for the establishment of institutionalized relationships between NATO and the states of the OSCE region – and to some extent for the institutionalization of relations with the CoE as well – it did not consistently matter in EU external relations. By contrast, the EU is the only organization in which the peacefulness of outsider states may have been relevant. Cultural affiliation has not exerted any robust influence on institutionalization. Civilizational culture, the Huntington variable, has been significant only in the EU case. On closer inspection, however, it turned out that this correlation contradicts the hypothesis of the West as a civilizational community: the statistical results indicate that Orthodox and Islamic countries have been significantly more likely to enter into institutionalized relations with the EU than Western states.23 The other cultural control variable, the definition of Europe, is significant only in one of the CoE models. Among the general material control variables, proximity is significant in only about half of the models. The economic variables even lack statistical significance throughout. By contrast, institutionalization proves to be strongly time-dependent. In sum, controlling for time, democracy is the most significant factor in the establishment of institutionalized relations between the Western organizations and the outsider states of the OSCE region. Application POLITY is again significant in the first three models for all organizations. Thus, the domestic adoption of and compliance with liberal norms generally have a significant influence on outsider states’ decisions to apply for membership in Western

24.06 .97 8.50 –.416 .549 .58 7.02 26.12 G(M) = 72.13 (.000), 90.9%

.036 .548

.000*** .325 .014** .445 .135 .010**

.054 .668

G(X)

33.55 13.71 .45 –1.32 .871 2.34 13.24 41.61 G(M) = 151.99 (.000), 96.2%

.249 2.40

.161 .531

S.E.

POLITY NEUTR CIV EURO PROX INST model

p

β

G(X)

β

Var

S.E.

NATO (N = 783)

.044 1.11 .432

G(X)

15.55 24.15 .21 72.30 G(M) = 119.26 (.000), 96.6%

.158 3.89 .188

EU (N = 497)

Table 8.3 Institutionalization model 2

13.80 2.84 6.64 32.41 G(M) = 57.33 (.000), 90.8%

.025 .501 .136

.000*** .092 .010** .001***

.091 .819 .314

S.E.

POLITY NEUTR MIDS INST model

p

β

G(X)

β

Var

S.E.

NATO (N = 730)

EU (N = 488)

Table 8.2 Institutionalization model 1

.000*** .000*** .801 .126 .010** .000***

p

.000*** .000*** .649 .000***

p

G(X)

.064 1.09

S.E.

G(X) 57.90 23.55 .25 1.32 .837 2.57 21.79 36.12 G(M) = 149.95 (.000), 96.2%

.374 4.55

β

CoE (N = 688)

.036 .743 .166

S.E.

21.74 3.33 2.66 43.51 G(M) = 86.40 (.000), 95.8%

.157 1.28 .252

β

CoE (N = 623)

.000*** .000*** .885 .109 .000*** .001***

p

.000*** .068 .103 .000***

p

p

.311 .204 3.57 .059 –32.74 782.18 8.03 .005** –.001 .000 3.48 .062 severe collinearity with GNPCAP –.090 .100 .96 .352 .039 .101 .15 .697 .858 .431 8.18 .004** 9.38 .052* 26.61 .001*** G(M) = 54.33 (.000), 86.0%

G(X)

POLITY NEUTR GNPCAP GDPTOT GROWTH AGRIC EDUC PROX INST model

S.E.

β

Var

EU (N = 57)

Table 8.5 Institutionalization model 4

8.64 .003** .03 .861 7.49 .024* –.406 .890 .21 .646 .000 .000 .00 .956 –.047 .031 2.55 .110 severe collinearity with GDPTOT 7.57 .109 21.25 .047* G(M) = 75.32 (.000), 89.8%

.053 .697

β S.E.

G(X)

.004** .011** .448 .815 .945 .240 .453 .013** .002***

p

.287 .013** .025*

.609

.071 .013** .086

p

.091 1.70

S.E.

G(X)

25.16 10.57 .76 3.34 1.42 7.35 .000 .000 1.67 –.015 .031 .22 .000 .000 .34 9.25 30.52 G(M) = 105.25 (.000), 94.9%

.350 4.69

β

CoE (N = 296)

.136 .081 3.25 3.54 1.55 6.16 .000 .000 2.94 severe collinearity with GNPCAP –.023 .046 .26 DEFEXP severe collinearity with DEFCAP DEFCAP –3.55 3.82 1.13 10.71 21.89 G(M) = 106.20 (.000), 96.1%

Var

NATO (N = 304)

.101 1.31

G(X)

8.20 6.46 1.61 –.353 1.52 .05 .000 .000 .01 –.054 .049 1.38 .000 .000 .56 10.72 32.59 G(M) = 129.26 (.000), 95.9%

.242 3.18

.142 .122

S.E.

POLITY NEUTR CIV EURO GDPTOT GROWTH GNPCAP PROX INST model

p

β

G(X)

β

Var

S.E.

NATO (N = 370)

EU (N = 256)

Table 8.4 Institutionalization model 3

.000*** .001*** .692 .007** .196 .639 .562 .055 .004**

p

.685 .695

–.894 –1.01

G(M) = 121.63 (.000), 97.2%

1.48

.936 1.20

.988

.065 1.33

S.E.

G(M) = 167.67 (.000), 96.8%

3.94 2.76

1.14

.279 4.31

–.403

.000*** .001*** .439 .789 .000*** .189 .134 .000***

.089 .619

.311 1.94

POLITY NEUTR CIV EURO PROX REL APP# APPT model

24.04 10.96 1.65 .07 29.30 1.73 2.24 54.45

β

β p

.060 1.09 .317 .840 1.41

S.E.

G(M) = 128.45 (.000), 97.3%

.187 1.61 .693 4.10 2.94

Var

G(X)

.008** .900 .670 .798 .079 .001***

CoE (N = 709)

S.E.

7.11 .02 .18 .07 3.09 34.43

EU (N = 953)

Table 8.7 Application model 2

G(M) = 56.27 (.000), 97.8%

.071 .613 .215 .931 .770

.158 .077 .089 –.238 1.37

POLITY NEUTR MIDS REL APP# APPT model

p

β

G(X)

β

Var

S.E.

CoE (N = 634)

EU (N = 775)

Table 8.6 Application model 1

24.09 14.96 .90 1.43 7.56 29.46 4.79 11.59

G(X)

12.62 2.56 8.05 38.37 3.23 18.64

G(X)

.000*** .000*** .639 .232 .109 .000*** .029* .561

p

.000*** .109 .005** .000*** .072 .135

p

β S.E. G(X) p model

.260 .215 2.24 .135

POLITY

3.99 3.20 1.84 .175

NEUTR

Table 8.9 Application model 4, EU GDPTOT

GROWTH

.000 .000 .216 .000 .000 .120 1.07 .26 4.75 .301 .610 .029* N = 279, G(M) = 65.33 (.000), 96.1%

GNPCAP

G(M) = 99.00 (.000), 96.0%

.944 1.05

–1.46 –2.46

138.69 83.09

4.40 .000 .000 .116

.131 3.51

S.E.

–.052 .284 .42 .519

AGRIC

.034 .057 .38 .540

EDUC

12.89 .012**

PROX

G(M) = 144.86 (.000), 97.4%

35.50 14.40

–3.30 .000 .001 .134

.289 6.24

1.75 .000 .000 .065

.000*** .000*** .417 .722 .730 .139 .209 .000*** .114 .012** .000***

–.634 .000 .000 .076

19.02 16.47 1.75 .13 .12 2.19 1.58 28.14 2.50 6.34 41.67

.093 .992

.308 3.50

POLITY NEUTR CIV EURO GDPTOT GNPCAP GROWTH PROX REL APP# APPT model

p

β

G(X)

β

Var

S.E.

CoE (N = 311)

EU (N = 625)

Table 8.8 Application model 3

12.50 85.60 1.15 .284

REL

7.05 3.94 9.04 .62 1.08 4.68 1.69 20.70 29.56 2.81 22.56

G(X)

APPT 4.17 44.66 6.20 27.42 .013** .007**

APP#

.008** .047* .011** .430 .299 .031* .193 .000*** .000*** .094 .047*

p

186 Frank Schimmelfennig organizations and remain significant if controlled for cultural, material, organizational and temporal confounding factors. The evidence for the other two test variables is mixed: neutrality appears to have been an obstacle to applications for EU and CoE membership if we take the entire history of the organizations into account (models 2 and 3). In the case of MIDS, states with lower involvement in militarized disputes have been more likely to apply for CoE membership. However, MIDS is not significant in the basic EU model. The cultural control variables do not consistently affect the likelihood of applications for membership. Among the material control variables, proximity is again the only robust influence. Ironically, economic per capita output is significantly correlated with applications for CoE but not EU membership. As for the other variables, fairly robust and high significance for APPT indicates the time-dependence of application events. By contrast, prior applications (APP#) do not consistently affect the likelihood of later applications. And whereas prior institutionalized relations (REL) with the CoE have significantly increased the chances of applications for membership, institutionalized relations with the EU have not had any systematic effect on the outsider countries’ decision to apply. In sum, controlling for time, democracy (followed by proximity and neutrality) is again the most robust correlate of enlargement. Accession The accession models reveal that POLITY is the only independent variable that is significant (and very highly so) across organizations, time periods and constellations of variables. As expected, ‘neutrality’ did well in the NATO models. But its high significance in all models that cover the time period until 1999 demonstrates that it has also worked consistently as an impediment to membership in the ‘civilian’ organizations. MIDS was only moderately significant in the basic CoE model. As in the analysis of the previously discussed events, the cultural control variables performed badly. Whereas CIV did not produce a single significant coefficient, there has been a tendency of the countries falling under a narrow definition of Europe to be more likely or quickly admitted to the CoE than countries of the wider definition. The analysis of the material control variables was severely hampered by failed model estimations due to numerical problems (model 3 for NATO and models 4 for the EU and NATO). The available results indicate that countries with high total economic output are more likely to accede to the EU and the CoE than countries with smaller economies; GNP per capita, however, is insignificant. Even proximity does not seem to matter as consistently for accession as it did for the earlier events: it is significant in only one of models 2 and 3 for the EU and the CoE. A prior institutionalized relationship with the organization is a bad predictor of accession. It is not only insignificant in the NATO and CoE models but, in the EU models, the significant coefficients even contradict the hypothetical expectation. Moreover, whether a state had conducted (failed) accession negotiations with the

19.25 6.41 1.15 4.65 35.62 .14 13.72 –1.73 .803 4.88 –.984 .773 1.71 31.36 G(M) = 82.27 (.000), 98.1%

.198 .684

.000*** .011** .562 .704 .008** .027* .192 .005**

.203 65.06

G(X)

10.80 17.69 .41 –1.67 2.04 .64 3.38 –2.49 1.58 2.90 no repeated accessions 11.41 G(M) = 47.30 (.003), 99.4%

.357 12.67

.418 1.62

POLITY NEUTR CIV EURO PROX REL ACC# ACCT model

S.E.

β

p

β

Var

G(X)

NATO (N = 963)

S.E.

G(X)

.511 .369 13.96 13.02 105.5 10.74 –1.65 1.80 1.36 –1.41 396.0 .000 no repeated accessions 20.24 G(M) = 35.71 (.005), 99.6%

EU (N = 1040)

Table 8.11 Accession model 2

11.03 1.79 .50 1.23 .63 19.53 G(M) = 41.43 (.001), 98.6%

.164 .881 .234 1.02 .765

.001*** .180 .480 .268 .428 .108

.282 1.12 .159 –1.09 .614

S.E.

POLITY NEUTR MIDS REL ACC# ACCT model

p

β

G(X)

β

Var

S.E.

NATO (N = 738)

EU (N = 806)

Table 8.10 Accession model 1

.653

.001*** .000*** .813 .422 .497 .088

p

.089

.000*** .001*** .244 1

p

G(X)

.088 1.24

S.E.

G(X) 41.94 16.07 .08 2.24 1.10 4.97 6.63 .188 .697 .073 3.46 2.79 1.89 22.95 G(M) =122.73 (.000), 97.4%

.419 4.08

β

CoE (N = 758)

.089 .840 .373 .684 1.91

S.E.

17.21 .96 4.63 2.43 5.45 11.37 G(M) = 56.65 (.000), 97.8%

.259 .809 .567 1.07 4.77

β

CoE (N = 645)

.000*** .000*** .962 .026* .157 .787 .169 .061

p

.000*** .327 .031* .119 .020* .580

p

G(M) =

–3.72 –2.05

19.73 .000 –.074 .000

14.39 7.65 .12 51.85 2.51 .000 4.54 .110 .44 .000 .15 2.79 1.44 8.02 1.38 2.40 23.61 64.07 (.000), 98.0%

.251 1.31

.000*** .000*** .944 .113 .033* .509 .699 .593 .005** .101 .051*

86.34 1.27

7.45 .52 .000 42.08 1345.0 .000 .000 .000 2.76 1.055 .666 3.96 .000 .000 .47 12.43 13.11 600.76 1.54 no repeated accessions 28.32 G(M) = 65.48 (.000), 99.0%

10.92 .917

G(X)

.489 3.27

S.E.

POLITY NEUTR CIV EURO GDPTOT GROWTH GNPCAP PROX REL ACC# ACCT model

p

β

G(X)

β

Var

S.E.

EU accession (N = 727)

EU (N = 691)

Table 8.12 Accession model 3

.057

.006** .472 1 .984 .097 .047* .493 .014** .214

p

G(M) =

–1.15 5.37

14.37 .000 .138 .000

1.09 7.97

β

G(X)

36.22 6.95 4.64 6.00 15.71 .000 5.70 .132 1.25 .000 .11 9.62 1.74 .42 40.41 .11 49.13 117.22 (.000), 97.2%

.404 3.79

S.E.

CoE (N = 352)

.000*** .008** .098 .000*** .017* .264 .741 .047* .515 .741 .000***

p

Liberal community and enlargement 189 organization or had been a member before does not significantly affect the likelihood of its accession at a later date. Finally, accession seems to be less timedependent than institutionalization and applications. The estimation of EU model 3 with actual accession as the dependent variable shows that the choice of the beginning of accession negotiations as the indicator for the organization’s decision to enlarge does not bias the analysis against the material control variables: whereas GDPTOT loses its significance and GROWTH only turns barely significant, POLITY remains highly significant.24 In sum, and with the caveat that material control variables could not be thoroughly tested, the decision of the Western organizations to admit, or to begin accession negotiations with, an outsider state appears to be most systematically related to that state’s adoption of democratic norms in domestic politics and with its non-neutral status. Exclusion Because of the small number of exclusion events, the analysis of exclusion models was burdened with two problems. First, only one exclusion model for NATO could be estimated because there has not been any such event in NATO before 1999.25 Moreover, the exclusion models classified the cases (almost) entirely correctly, causing the problem of ‘(quasi)complete separation’ and extremely high coefficients and standard errors. As a result, the estimated parameters are inefficient but not biased. Thus, they can still be used to make accurate inferences about the variables (Menard 1995: 69). The statistical results of the event history analysis for exclusion are quickly summarized: POLITY is the only variable that proved significant in all models. Other variables were either significant in one model only or had the wrong sign (EURO). These results indicate that the exclusion or withdrawal from membership in, or association with, the European Union and the Council of Europe is systematically and inversely correlated with the states’ compliance with basic liberal norms in domestic politics. The less democratic a state is (or has become after accession or association), the more likely it is excluded or withdraws from the Western organizations. Neither compliance with the international liberal norms of peace and multilateralism, nor cultural and material factors, nor the duration of a state’s membership or association affect this relationship consistently.

Discussion of results: variables In the previous section, the focus of discussion was on the four different enlargement events and their determinants. I will now turn to the significance of different variable groups and individual variables across enlargement events. Test variables POLITY has proven to be by far the most robust variable in the analysis. In all models, the POLITY coefficients had the correct sign, and, in thirty-one of

597.78 17.00 3377.7 .00 9.25 83.26 28476 .00 13.92 5.00 G(M) = 37.52 (.001), 100%

.000*** .999 .010** .999 .008** .543

193.25 8143.3

G(X)

5.74 .00 .00 –26.79 2264.2 .00 2.77 6.03 G(M) = 15.61 (.409), 100%

2.73 .531

25.53 52.34

S.E.

POLITY NEUTR CIV EURO PROX EXCT model

p

β

G(X)

β

Var

S.E.

NATO (N = 901)

111.22 1484.1 41.57

G(X)

33.50 .00 .21 7.35 G(M) = 41.05 (.000), 99.9%

30.06 196.76 18.69

EU (N = 575)

Table 8.14 Exclusion model 2

20.33 .00 2.77 .00 G(M) = 25.13 (.003), 100%

40722 9819.6 4130.5

.000*** .994 .096 1

122.49 1245.61 564.47

S.E.

POLITY NEUTR MIDS EXCT model

p

β

G(X)

β

Var

S.E.

CoE (N = 784)

EU (N = 395)

Table 8.13 Exclusion model 1

.017* 1 1 .994 .597 .420

p

.000*** .987 .650 .289

p

S.E.

G(X) 77.54 21.52 5768.8 .00 .00 –29.65 24992 4.15 .00 7.55 G(M) = 51.39 (.000), 99.6%

9.40 53.46

β

CoE (N = 1058)

.000*** .994 1 .042* 1 .273

p

G(M) = 36.63 (.004), 100%

211.41 3339.7

G(X)

25.53 .00 .00 –154.52 2117.7 1.5E+08 .001 .008 .05 –.000 .124 .00 –6.98 98.77 3.5E+19 .00 16.07 G(M) = 60.51 (.000), 100%

12.10 –14.09

21996 .006 .901 1975.8

.000*** .999 1 1 1 .999 1 1 1

60.22 –.000 –.002 –3.56

1.2E+07 .00 .00 .00 .00 .00 .00 .00 .00

1048.5 15733

22.59 32.01

S.E.

POLITY NEUTR CIV EURO GDPTOT GNPCAP GROWTH PROX EXCT model

p

β

G(X)

β

Var

S.E.

CoE (N = 783)

EU (N = 496)

Table 8.15 Exclusion model 3

.000*** .999 1 .000*** .816 .998 .000*** 1 .013**

p

192 Frank Schimmelfennig thirty-four models, the POLITY coefficients were significant, mostly so at the 0.1 per cent level. Insignificant coefficients for POLITY only appeared in the models testing organization-specific material variables for the EU and NATO, indicating that significance may be affected by short periods of examination. Generally, however, POLITY is an extremely reliable correlate of enlargement, and in the case of exclusions and withdrawals it is even the only significant factor. Thus, the likelihood of an outsider state’s establishment of institutionalized relations with, accession to, and exclusion from the Western organizations is robustly correlated with its adoption of fundamental liberal norms of domestic conduct. The evidence for the other two test variables is less convincing. Unsurprisingly, the coefficients for neutrality are correct and significant in all NATO models (except exclusion) whereas the results for the EU and the CoE are mixed. The neutrality variable attained its best results in the application and accession models covering the full period of examination. This seems to indicate that neutrality is more important as an obstacle to applications for and the attainment of membership than for the establishment of institutionalized relations or exclusion from the organization. MIDS is generally insignificant in NATO enlargement; it is significantly correlated with the establishment of institutionalized relations with the EU (but not with applications, accession and exclusion) and with applications for and accession to the CoE (but not with institutionalization and exclusion). Thus, there is only one unambiguous but also quite trivial result for the liberal norms of foreign policy: whereas the neutrality of an outsider state is an impediment to NATO enlargement, its involvement in militarized interstate disputes is not. In sum, the liberal community hypothesis about the enlargement of Western organizations in Europe is partially corroborated by the statistical analysis. Adoption of and compliance with liberal norms in the domestic sphere is a robust factor in the enlargement process: the more democratic a non-member state, the higher its likelihood of establishing institutionalized relations and being admitted to the EU, NATO and the CoE, and the less democratic a member or associated state, the higher its risk of being excluded from the Western organizations. By contrast, the compliance of states with the foreign policy norms of non-neutrality and non-involvement in militarized interstate disputes is a less significant and reliable correlate of enlargement. It appears, however, that neutrality is a more significant obstacle than involvement in military conflict, in particular when it comes to applying for and being admitted to Western organizations. Control variables Cultural control variables The cultural control variables performed weakly in general. In the few cases in which CIV proved significant at all, a re-analysis based on a dichotomous categorization of states according to Western and non-Western cultural affiliation actually revealed that, in contradiction to the hypothesis of civilizational community, nonWestern non-member states were more likely to establish institutionalized

Liberal community and enlargement 193 relations with the EU and to apply for CoE membership than Western states. The differentiation between a ‘wider’ and a ‘narrower’ Europe seems to have mattered to some extent only in CoE enlargement. Thus, religious culture does not matter systematically in the enlargement of the Western organizations. Nor do different conceptualizations of the borders of ‘Europe’. Material control variables On the whole, the economic control variables perform no better than the cultural ones. None of them is statistically significant (with the correct sign) in more than two (out of thirteen) models. Of the specific control variables, only the level of secondary education had a significant coefficient in one of two models (EU institutionalization). Thus, the economic or military potential of outsider states does not seem to have any significant influence on their relationship with the Western organizations. In contrast, geographical proximity proved to be an important correlate of enlargement events. Being significant in more than half of the models, it is outperformed only by POLITY – however, by a wide margin. The significant coefficients are fairly evenly distributed across all three organizations but not across all four enlargement events. Whereas outsider states are very likely to apply for membership the closer they are located to the organizations, this correlation is not robust in the case of accession (negotiations) or exclusion. Institutional and temporal variables Overall, the evidence for self-reinforcing or self-weakening institutional dynamics of the enlargement process is weak. First, whether a state had applied for membership or conducted accession negotiations before (APP#, ACC#), neither systematically increased or decreased the likelihood of subsequent applications and accession. Second, the effect of an institutionalized relationship on applications and accessions (REL) is non-uniform. Earlier association with the CoE increases the likelihood of a later application for membership but does not increase the chances of being admitted to the organization. In the EU case, earlier institutionalized relations do not increase the likelihood of applications for membership but appear to decrease the chances of being invited to accession negotiations. In NATO enlargement, earlier institutionalized relations are not significantly related to the opening of accession negotiations at all. The analysis detected significant time-dependence in more than half of the models. In general, the relevance of the time a state has spent in the risk set decreases with the progress of enlargement. It is significant in all institutionalization models, in most application models, in only a third of the accession models, and in only one of the exclusion models. In sum, then, POLITY is the only variable that proved highly significant across all enlargement events, organizations and estimated models. Domestic compliance with liberal norms thus seems to be a general condition of the central events in the enlargement process, from the establishment of institutional relations with external states and

194 Frank Schimmelfennig their membership applications to the admission of new members to the Western organizations and their exclusion or withdrawal from them. The addition of cultural, material, institutional and temporal controls did not damage the robustness of this test variable. Provided that no important variables were omitted, it appears justified to conclude that outsider states’ domestic compliance with liberal democratic community rules is the single most important variable that drives and constrains the enlargement of Western organizations. Furthermore, the analysis gives no reason to doubt the negative corollary of the liberal community hypothesis: the entire enlargement process of the core Western organizations is not systematically affected by factors other than the spread of liberal values and norms among the states of the European regional system. Finally, there is no evidence from the event history analysis that the enlargement processes of the three major Western organizations have differed systematically. To be sure, the significance of individual factors for individual events often varies across organizations but, on the whole, there is no discernible pattern to these variations except the trivial finding already mentioned: the neutrality of outsider states seems to have been a more serious obstacle to NATO enlargement than for the other two organizations. Above all, there does not seem to be any variation with regard to the central norms of liberal democracy: POLITY is a significant factor in the entire enlargement process of all three organizations.

Conclusion The event history analysis of the enlargement of the three major Western European organizations has supported the liberal community hypothesis to a large extent. The defining characteristics of a liberal state, that is, compliance with principles and norms of liberal democracy, proved to be a highly significant and robust variable. The more a state complied with domestic liberal norms, the more likely it was to establish institutionalized relations with and to apply for membership in the EU, NATO and the CoE, to join these organizations, and to remain a member in good standing. This correlation held in almost all the models estimated for different events, time periods, and combinations of control variables. Neither cultural or material factors nor institutional momentum and timedependency reduce its robustness. By contrast, the test of the liberal norms of foreign policy did not produce similarly convincing results. Whereas neutrality at least appears to have been a general obstacle to NATO enlargement as well as to the application for and admission to membership in the other two Western organizations, the evidence for MIDS is too weak to warrant any positive conclusions. To the extent that we accept that neutrality and involvement in militarized disputes are valid operationalizations of multilateralism and peaceful conflict management, then, the analysis suggests that liberal norms of foreign policy are far less important for enlargement than those of domestic conduct. The analysis was not designed to test the alternative hypotheses directly. However, the economic, military and cultural control variables proved so insignificant

Liberal community and enlargement 195 that such a test appears unlikely to corroborate either the civilization or the material interests hypotheses. Only the relatively unspecific proximity variable was sufficiently robust to warrant the conclusion that the geographical distance between the member states of the organization and the non-members is a relevant condition of enlargement. This, however, holds mainly for applications. In contrast, accession, the most important event in the process, does not seem to be systematically conditioned by geographical distance. The methodological thrust of this chapter was to overcome the limitations of the single-organization and single-event design that dominates the field. I hope to have shown that it helps us to broaden the empirical basis of enlargement research, to check the findings of case studies against a greater body of evidence, to control systematically for alternative explanations, and to provide a highly general picture of the causal field in which enlargement is embedded. I would like to add two qualifications, however. First, statistical analysis only establishes significant probabilities. Cases that contradict the liberal community hypothesis (such as Portugal’s early membership in NATO or the French veto against the British accession to the EC) easily come to mind, but this study showed them to be insignificant exceptions. Second, statistical analysis only establishes correlations that correspond to a causal mechanism. For this reason, I consider this study to complement rather than to replace analyses of the causal process. Finally, does this study teach us anything new about EU enlargement? After all, it is not surprising that the EU restricts enlargement to liberal democracies, given its treaty regulations and the characteristics of its policy-making process. But this study shows, first, that the reference to liberal norms in the organization’s treaties is not merely symbolic but really matters for enlargement. Second, democracy matters not only for enlargement narrowly defined but for the entire process of horizontal institutionalization. Third, no other (geopolitical, economic or cultural) factor that may have played a role in individual EU enlargement decisions matters as systematically as the democracy factor. And, fourth, EU enlargement is not sui generis but appears to follow the same logic as the enlargement of other Western organizations.

Notes 1 I thank Stefan Engert and Heiko Knobel for their research assistance in establishing the Enlargement Database and collecting data for the analysis, Thomas Plümper for his comments on the first version of the paper at the Darmstadt workshop, and two anonymous referees for their helpful questions and criticisms. Funding of the research project by the Deutsche Forschungsgemeinschaft is gratefully acknowledged. 2 For a differentiated explication of these causal relationships, see, e.g., Jepperson et al. 1996. 3 On the constructivist analysis of international organizations, see Barnett and Finnemore (1999); Katzenstein (1997); Reus-Smit (1997); Weber (1994). 4 This is the basic proposition of club theory (Buchanan 1965). For applications to EU and NATO enlargement, see, e.g., Padoan (1997); Sandler and Hartley (1999). 5 The database can be obtained from the author on request at frank.schimmelfennig@ mzes.uni-mannheim.de.

196 Frank Schimmelfennig 6 The database contains data on fifty-three states; the European micro-states are excluded. 7 This enables me to use data of the same year for the independent variables without violating the chronological order between independent and dependent variables. 8 Further information can be found in the codebook, available at http://www.ifs.tudarmstadt.de/pg/regorgs/codebook.htm. 9 In the EU, it usually takes several years of negotiations and ratifications before a candidate state finally becomes a member. In order to control for possible bias introduced by this time lag, I replicated the analysis for the EU with actual accession as the dependent variable. 10 For an introduction to event history analysis, see Allison (1984); Box-Steffensmeier and Jones (1997); Petersen (1991); Yamaguchi (1991). 11 I used the binary logistic regression program in SPSS 10. On logistic regression analysis, see Kleinbaum (1994); Menard (1995). 12 For more information, consult the Polity IV manual at http://www.bsos.umd.edu/ cidcm/polity. Since Malta is missing from the Polity database, I calculated POLITY scores on the basis of Freedom House data for the time period 1972–98. This is a justifiable procedure because Polity and Freedom House data are strongly correlated (Jaggers and Gurr 1995: 474). 13 I thank the reviewers for alerting me to this point. 14 A direct land border is coded 1, a direct (territorial) sea border is coded 2. Two land borders are coded 3, three land borders 4. A distance of more than three land borders or a high sea border is coded 5. 15 The level of unemployment in the external state would have been another important variable. Unfortunately, however, the data available from the World Bank for the entire country sample only cover less than a decade. 16 I did not include data on the total number of military forces because this variable is a poor indicator of military strength. It can indicate strong military power but also military inefficiency and an outdated military organization. Defence expenditures are the more reliable indicator. 17 This is the procedure suggested by Allison (1984: 18) and Beck et al. (1998). 18 The dataset used to estimate the models can be obtained from the author on request at [email protected]. 19 It is calculated as the difference between the log-likelihood multiplied by –2 (–2LL) for a model without explanatory variables and –2LL for the model examined. 20 SPSS does not produce overall coefficients and standard errors for polytomous nominalscale and ordinal-scale variables. Therefore, they are missing. 21 One asterisk (*) indicates moderate significance (at the p = .05 level), two asterisks high significance (at the p = .01 level), and three asterisks extremely high significance (at the p = .001 level). 22 In addition, I performed regression diagnostics. First, for each model, a tolerance statistic was calculated in order to discover collinearity. Except when mentioned in the tables, this statistic was above a value of .2 indicating no severe collinearity. The few cases of severe collinearity concerned two indicators that measure similar explanatory factors; in each of these cases, I let the program estimate two models, each of which included one of the two indicators. None of them proved significant. Second, I performed a Box-Tidwell Test for non-linearity and, third, a likelihood ratio test for non-additivity for the main test variable (POLITY) with the other independent variables (Menard 1995: 60–67). However, potential non-linear and significant non-additive effects were too few and not sufficiently robust to merit serious consideration or a respecification of the models. 23 SPSS does not produce coefficients for polytomous variables, so I recategorized CIV as a dichotomous variable distinguishing between Western and non-Western states and reran models 2 and 3. 24 Note, however, that NEUTR becomes insignificant.

Liberal community and enlargement 197 25 Belarus suspended its participation in the Partnership for Peace because of NATO’s Kosovo campaign; Russia reassumed participation before the end of the year.

References Abbott, K. W., and Snidal, D. (1998) ‘Why States Act Through Formal International Organizations’, Journal of Conflict Resolution, 42(1): 3–32. Allison, P. D. (1984) Event History Analysis: Regression for Longitudinal Event Data. Newbury Park, CA: Sage. Barnett, M. N., and Finnemore, M. (1999) ‘The Politics, Power, and Pathologies of International Organizations’, International Organization, 53(4): 699–732. Beck, N., Katz, J., and Tucker, R. (1998) ‘Taking Time Seriously in Binary Time-SeriesCross-Sectional Analysis’, American Journal of Political Science, 42(4): 1260–88. Box-Steffensmeier, J. M., and Jones, B. S. (1997) ‘Time Is of the Essence: Event History Models in Political Science’, American Journal of Political Science, 41(4): 1414–61. Buchanan, J. M. (1965) ‘An Economic Theory of Clubs’, Economica, 32(125): 1–14. Huntington, S. P. (1993) ‘The Clash of Civilizations?’, Foreign Affairs, 72(3): 22–49. Jaggers, K., and Gurr, T. R. (1995) ‘Tracking Democracy’s Third Wave with the Polity III Data’, Journal of Peace Research, 32(4): 469–82. Jepperson, R. L., Wendt, A., and Katzenstein, P. J. (1996) ‘Norms, Identity, and Culture in National Security’, in P. J. Katzenstein (ed.), The Culture of National Security: Norms and Identity in World Politics. New York: Columbia University Press, 33–75. Katzenstein, P. J. (1997) ‘United Germany in an Integrating Europe’, in P. J. Katzenstein (ed.), Tamed Power: Germany in Europe. Ithaca, NY: Cornell University Press, 1–48. Kleinbaum, D. G. (1994) Logistic Regression: A Self-Learning Text. New York: Springer. Menard, S. (1995) Applied Logistic Regression Analysis. Thousand Oaks, CA: Sage. Owen, J. M. (1994) ‘How Liberalism Produces Democratic Peace’, International Security, 19(2): 87–125. Padoan, P. P. (1997) ‘Regional Arrangements as Clubs: The European Case’, in E. D. Mansfield and H. V. Milner (eds), The Political Economy of Regionalism. New York: Columbia University Press, 107–33. Petersen, T. (1991) ‘The Statistical Analysis of Event Histories’, Sociological Methods and Research, 19(3): 270–323. Reus-Smit, C. (1997) ‘The Constitutional Structure of International Society and the Nature of Fundamental Institutions’, International Organization, 51(4): 555–89. Ruggie, J. G. (1993) ‘Multilateralism: The Anatomy of an Institution’, in J. G. Ruggie (ed.), Multilateralism Matters: The Theory and Praxis of an Institutional Form. New York: Columbia University Press, 3–47. Sandler, T., and Hartley, K. (1999) The Political Economy of NATO: Past, Present, and into the 21st Century. Cambridge: Cambridge University Press. Weber, S. (1994) ‘Origins of the European Bank for Reconstruction and Development’, International Organization, 48(1): 1–38. Yamaguchi, Kazuo (1991) Event History Analysis. Newbury Park, CA: Sage.

9

Preferences, power and equilibrium The causes and consequences of EU enlargement1 Andrew Moravcsik and Milada Anna Vachudova

Introduction Over the fifteen years after the collapse of communism, the uniting of Western and Eastern Europe through the ongoing enlargement of the EU has been the most important single policy instrument available to further a more stable and prosperous continent.2 Eight post-communist states concluded negotiations with the EU in 2002 and joined as full members in May 2004. Several more are poised to do so around the end of the decade. In this chapter we seek to outline in the very broadest strokes the most important structural forces of national interest and influence underlying the dynamics of enlargement itself and its future consequences for EU governance. We argue that European governments, West and East, calculated the expected economic and geopolitical consequences of enlargement for their domestic societies and acted accordingly. While we do not claim that such an analysis is comprehensive, we believe it captures the most significant underlying forces in play in enlargement politics. Most commentators treat enlargement as a radical break in the history of the EU, and the apparent success of enlargement and the terms on which it is taking place have both surprised many analysts and aroused many critics. Many find the process of interstate bargaining over enlargement mystifying and, as we discuss below, invoke idealistic motivations on the part of existing European governments to explain it. At the same time, many have criticized the EU for taking too long to enlarge and for imposing burdensome conditions for doing so. Still others have cautioned that enlargement without substantial federalizing reform could lead to gridlock and crisis in the future. In this essay we challenge these conventional beliefs about the origins, process and consequences of enlargement. EU enlargement is at once less novel and less alarming than current analysis suggests. The EU enlargement process and its likely consequences for the future are hardly mysterious when viewed from the perspective of national interests and state power – and this viewpoint also offers a more optimistic prognosis for the future. Just as in the past, EU leaders promoted the recent round of accessions because they consider enlargement to be in their stable and long-term economic and geopolitical interest. The costs and benefits of enlargement are unevenly

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199

distributed, and this explains much of the politics that has surrounded it. Frontline states have generally supported enlargement. While some interest groups in older member states opposed enlargement because they bore a disproportionate share of the short-term costs, the EU bargaining process permitted their governments to resolve many such concerns – just as it did earlier similar conflicts about previous EU policies. For their part, Eastern European states have taken part in the laborious accession process because EU membership brings tremendous economic and geopolitical benefits – particularly as compared to the uncertain and potentially catastrophic costs of being left behind as others move forward. While the candidates have had to comply with the EU’s requirements and acquiesce to certain unfavourable terms, EU membership has brought significant net national benefits – economic, institutional and geopolitical. On balance, the terms demanded of them, while involving some sacrifice, seem entirely in keeping with the immense adjustment, and the immense benefits, involved – and it is precisely this, as conventional bargaining theory would predict, which explains why no Eastern government came close to rejecting accession. In addition, many of the conditions of EU membership have motivated Eastern European governments to implement reforms that shore up democratic standards, improve the state, and increase aggregate economic welfare. Looking forward to the consequences of enlargement, we find little reason to predict that enlargement will cause the gridlock of EU institutions, or significantly change the course of European integration. The applicant countries are numerous, backward and diverse–and indeed their bargaining power increases as they become members. Yet, as they are absorbed into the EU’s decision-making process, new members are likely to do little more than reinforce existing trends in EU politics, such as the growing conflict over the budget and further cooperation outside of the first pillar.

Negotiating enlargement Each previous round of EU enlargement has gone through a parallel and predictable negotiation process. As Helen Wallace (ch. 14 this volume) suggests, comparing this round of EU enlargement with previous rounds is highly instructive. In each and every round, applicant countries have consistently found themselves in a weak negotiating position vis-à-vis their EU partners, and accordingly have conceded much in exchange for membership. And this effect has increased over time. To see why, it is helpful to introduce a few insights from basic bargaining theory (Raiffa 1982). Relative bargaining power in international negotiations tends to track relative preference intensity. The logic is simple: those countries that gain the most through more intense interstate cooperation – more precisely, those for whom cooperation is most attractive relative to unilateral (or mini-lateral) policymaking – have the most intense preferences for agreement and thus are willing to compromise the most on the margin to further it. In the language of international relations theory, interstate bargaining outcomes reflect patterns of ‘asymmetrical

200 Andrew Moravcsik and Milada Anna Vachudova interdependence’ – more ‘interdependent’ countries tend to benefit more from liberalizing markets, and are thus willing to make concessions to do so (Keohane and Nye 1977). Within the EU, such beneficiaries tend to be (all other things being equal) those countries that are smallest in GNP terms, whether due to their geographical location or on account of their stage of development. For small countries, the increased economies of scale of entering the European market are of greatest marginal significance. The existence of distinct comparative advantages in relevant export sectors further shapes their specific interests.3 Once the back and forth of negotiation is complete, the subjective sense for such countries is often of having bargained poorly, because they are forced to make disproportionate concessions during the negotiations. Yet this is a function of the large overall net benefit to them, which also compels ratification and implementation of the resulting agreement (Moravcsik 1991; Moravcsik 1998a: ch. 1). The negotiation of the original Treaty of Rome during the mid-1950s offers a striking example. As the logic above would predict, the country whose foreign minister had initially proposed the customs union and which benefited the most per capita from its realization–namely the Netherlands–was forced to make the greatest concessions on the margin to achieve agreement. The result was that the treaty was viciously criticized by Dutch politicians and the public–more so, perhaps, than in any other of the six original member states, even though (or precisely because) non-ratification by the Netherlands was never a realistic option (Griffiths 1990). The obverse case in the 1950s was that of France, which achieved almost all of its negotiating goals in large part because, as a large and macro-economically uncompetitive country, French non-ratification was a realistic possibility up until the final moment (Milward 1993; Moravcsik 1998a). Add to these structural economic realities a general German tendency to be somewhat more forthcoming in order to cement geopolitical alliances – a constant of European integration until, and beyond, 1989 – and the bargaining outcomes are precisely what one would expect (Moravcsik and Nicolaïdis 1999).4 The same pattern has characterized EU bargaining ever since: specific interstate concessions and compromises tend to reflect the priorities of the EU’s core countries, and disproportionately the most powerful among them, even as more peripheral countries benefit as much or more overall (Moravcsik 1998a). Enlargement negotiations with Britain, Ireland, Denmark, Greece, Spain, Portugal, Sweden, Finland and Austria track this pattern (for a consistent analysis, see Mattli 1999; see also Baldwin 1995). In each case, bargaining demands by applicant countries for recognition of their particular circumstances were stripped away one by one until a deal was struck that disproportionately reflected the priorities of existing member states. Thus Britain in 1973, though relatively poor, ended up a large net contributor to the EU budget. Ireland, Denmark, Greece and Spain were subsequently forced to accept agricultural arrangements not particularly well suited to their particular comparative advantages, and often involving lengthy transition periods. In the 1990s, the enlargement to include Sweden, Finland and

Preferences, power and equilibrium 201 Austria thrust full membership on countries that initially sought greater market access in the context of a less comprehensive commitment. So it is, and is likely to remain, with successive applicants from Central and Eastern Europe. EU member states and the Eastern applicants will both benefit from EU enlargement, but new applicants will benefit more – and this puts the latter at a disadvantage in bargaining. The basic asymmetry of interdependence and thus power is evident from the simple fact that the collective GDP of the twelve states that are joining the EU in 2004–07, including Bulgaria and Romania, totals no more than 5 per cent of the GDP of the EU-15 – less than any other major enlargement of the EU (see table 9.1).5 This is roughly the weight of Mexico’s economy as compared to that of the United States. Since 1990, the political consequences of this fundamental asymmetry have been evident (Vachudova 2001a; Vachudova 2005). They are clearest in the form of the pre-accession process, in which applicants have had to satisfy the Copenhagen criteria and adopt the acquis in its entirety to qualify for membership.6 Until the final rounds, the negotiations were little more than a process of checking that the candidates had adopted EU law, chapter by chapter and page by page. The requirements are massive, non-negotiable, uniformly applied, and (usually) closely enforced. The transition from communism has meant not only building a market economy from the ground up, but also creating a modern regulatory state capable of implementing the EU’s acquis, now far more substantial than during any previous wave of enlargement. This imposes a heavy burden in the sense that the EU compels new applicants to transpose and implement standards of internal democracy, state administration and detailed regulatory protection that the EU-15 had half a century to accommodate (see Cameron 2003; Grabbe 2001a). It also imposes a double standard in a handful of areas, chiefly the protection of ethnic minority rights, where candidates are asked to meet standards that the EU-15 had never set for themselves (see De Witte 2002; Sasse 2004). The intrusive verification procedures that the Commission uses to check compliance with EU standards and rules are a tough blow for national pride. Some scholars have criticized the EU for taking too long to enlarge (Rupnik 2000), and for imposing burdensome conditions that undermine democratic Table 9.1 Enlargement rounds and asymmetric interdependence Round of enlargement

GNP of applicants/ GNP of existing members

GNP per capita of applicants/GNP of existing members

1st enlargement (1973): UK, IRE, DK 2nd enlargement (1981): G 3rd enlargement (1986): ES, P 4th enlargement (1995): S, SF, A 5th enlargement (2004+): PO, H, CZ, SK, SL, BU, RO, LA, LI, ES, MAL, CYP

20% 2% 7% 8%

79% 48% 42% 115%

5%

14%

202 Andrew Moravcsik and Milada Anna Vachudova institutions, social policy and economic prosperity (for example, Grzymała-Busse and Innes 2003; Holmes 2003; Ellison and Hussain 2003). Some EU rules do seem ill-considered, unsuited to transitional economies, or ill-suited for particular countries. The economic reforms demanded by the EU, including the withdrawal of the state from many areas of the economy, do impose a large adjustment cost on economically and politically vulnerable countries. Applicants have had to expose industry to competition from Western firms, sharply decrease state subsidies to weak sectors, and privatize relatively quickly large enterprises, banks and state utilities. Yet many of these reforms are an integral part of completing the transition to market capitalism and attracting foreign investment, particularly on the European continent. Fifteen years on, the evidence is indisputable that the EU front-runners that have reformed the most rapidly have also registered the highest rates of economic growth, and suffered the lowest increase in income inequality – compared to their Eastern and Southeastern neighbours that opted for more gradual reforms after 1989 (Hellman 1998; World Bank 2002; Vachudova 2005). For the construction of a well-functioning market economy and a strong, democratic state – long-term goals that are hardly in question – the requirements for EU membership have been, on balance, positive (Vachudova 2005). They have promoted valuable reforms: creating an independent civil service, overhauling the judiciary, improving oversight of financial markets, and blocking bailouts of uncompetitive but influential sectors. To be sure, applicants have had to divert their meagre public resources from health and education to implementing an acquis devoted primarily to the regulation of economic production. Still, locking the applicants into the EU’s legal and regulatory frameworks promises to limit corruption, improve administrative capacity, attract foreign investment and facilitate full insertion into the EU and global economy–thereby bringing substantial returns to the national budget over the long term. Entering the EU is expected to raise output and growth rates by stimulating entrepreneurship, foreign direct investment (FDI) and technology transfers (Grabbe 2001b). Studies indicate that, because of raised investor confidence, FDI inflows have been concentrated in those post-communist states that are on track to join the EU (Kaminski 2001). One study forecasts long-term total gains to the new member states ranging from €23 billion to €50 billion (Baldwin et al. 1997). These incentives of EU membership have also helped move certain candidate states from illiberal to liberal democracy (Vachudova 2005). The absence of EU pressure might have meant much greater and more prolonged rent-seeking by elites in control of ‘gradual’ reforms. As Mattli and Plümper (ch. 3 this volume) argue, ‘leaders in less democratic regimes, who were not overly concerned with the general well-being of the population, felt less pressure to contemplate deep reforms. Their survival depended largely on the support of a few powerful interest groups that derived great economic and social benefits from the politicoinstitutional status quo.’ For them, EU membership was ‘decidedly unappealing’. By the end of the 1990s, however, the variation in political and economic trajectories that had been visible among the EU’s credible future members in

Preferences, power and equilibrium 203 Eastern Europe had diminished. Almost all political leaders now found EU membership ‘appealing’. States that had applied for EU membership were subject to the full force of the EU’s pre-accession process, which sooner or later inspired most political actors to recognize the material benefits of moving their own political agenda towards compatibility with the state’s bid for EU membership (Vachudova 2005; for a constructivist account, see Epstein 2004). In the final round of the negotiations with each of the post-communist candidates, it is true, the EU also imposed some more narrowly self-interested conditions. These exceptions fell in precisely those areas where advanced industrial democracies have customarily crafted such exceptions, not just within the EU, but within the GATT and WTO as well. After the hard work of adopting EU standards and rules, the member states forced candidates to accept unfavourable terms for their accession– to sacrifice some portion of the benefits of membership over the short and medium term. They receive lower (albeit still substantial) subsidies from the Common Agricultural Policy (CAP) and from the Structural and Cohesion Funds than did the previous poorer applicants. Outlays from the EU budget to new members have been capped at 4 per cent of their GDP, although the latter is far lower than their predecessors obtained. This effectively limits their receipts and protects those of the richer existing members (Grabbe 2001a: 36). The applicants also have to accept special provisions related to some areas of European integration, including long transition periods for certain benefits such as the free movement of labour and equal access to the EU’s agricultural subsidies. Most of the special provisions reflect the demands of narrow special interests or the concerns of voting publics in the existing member states. Many observers view these unfavourable terms of accession as prima facie unreasonable, but the logic of bargaining outlined above suggests a more nuanced conclusion. The applicants are forced into concessions precisely because the basic benefit offered to them–membership–is of such great value. This benefit so outweighs the costs, particularly as compared to those of exclusion, that applicants make concessions even when no coercion is threatened. Such is the logic of ‘asymmetrical interdependence’.

Explaining Western policy The greatest puzzle posed by enlargement is thus not why the accession countries have been so anxious to enter, or why they were so disadvantaged in the negotiations, but why the existing EU-15 have been willing to let them in. Here, too, the final tally of enlargement’s costs and benefits is the subject of considerable debate (see Torreblanca 2002; Schimmelfennig and Sedelmeier ch. 1 this volume). Several scholars argue that only constructivist theory can explain the offer of EU membership to Eastern European states; the material interests of Western European states simply cannot account for this decision. Karin Fierke and Antje Wiener (ch. 5 this volume) argue that speech acts during the Cold War constructed a set of norms about a united, democratic Europe that later forced Western European governments to allow EU enlargement. Ulrich Sedelmeier

204 Andrew Moravcsik and Milada Anna Vachudova explains the incremental and not very generous policies of the EU towards the candidate states as the product of competition between material and constructivist (or ideational) forces. Sedelmeier argues that the discursive creation of a ‘special responsibility’ of the EU towards the Eastern European applicants led to a principled advocacy of their preferences inside the EU institutions. This has constrained the scope for open opposition on self-interested grounds on the part of EU member states (Sedelmeier this volume; Sedelmeier 1999, 2005). Along similar lines, Frank Schimmelfennig maintains that economic and geopolitical interests cannot account for the EU’s decision to embark on such an ambitious and costly enlargement. Instead, confronted by the power of normbased arguments, the West talked itself into a commitment to admit countries that share its liberal values–and this ‘rhetorical entrapment’ has subsequently sustained enlargement despite the fact that mere association for Eastern European states would have better served the EU’s interests (Schimmelfennig 2003, ch. 7 this volume).7 Peter Ludlow’s very thoroughly documented study of the enlargement process concludes along similar lines (Ludlow 2003). Scholars who consider EU enlargement as a triumph of supranational entrepreneurship or of norms over interests point to the costs of making Eastern European states full members as opposed to mere associate members. While there is no doubt that a measure of idealism played a supporting role in the decision to enlarge – as one might expect from a policy with rather diffuse benefits – the ‘ideational’ or ‘rhetorical’ account of enlargement must be placed in proper perspective. First, the overall effect of enlargement is modest. The twelve new members, we have seen, represent less than 5 per cent of the current EU GDP and thus can have relatively little impact. The general conclusion: it is easier to indulge rhetorical idealism, if this is what occurred, when the material issues are marginal. Second, while enlargement may be modest in a broader perspective, it does bring significant material benefits to the EU-15. By 2007 the twelve new member countries will have added 100 million new consumers in relatively fast-growing economies to the internal market. One study projects that the EU-15 countries will gain about €10 billion from this enlargement over the long term, far more than the cost to the EU budget of having the new members (Baldwin et al. 1997). Perhaps more important, enlargement is part of a European strategy for geopolitical stabilization. This, along with economic revitalization of the European borderlands, is likely to dampen nationalist conflict, make illegal immigration more manageable, and reduce the costs of managing a border with potentially disorderly neighbours (World Bank 2000). Some believe that the EU will thereby gain greater clout as a geopolitical actor. (Even those who stress ‘rhetorical entrapment’ concede the existence of these benefits, and object only that such an outcome would have been possible also through association.) For Britain, finally, Eastern European membership was consistent with a certain scepticism about ambitious federalist proposals for ever deeper union. The existence of specific and tangible benefits accounts for an aspect of support for enlargement that is unexplained by the rhetorical account – namely that it was concentrated among front-line states (Germany, Denmark,

Preferences, power and equilibrium 205 Sweden, Italy, and then, anomalously, Britain) rather than among those who were most strongly ‘federalist’ (the original six) or those where publics favour Europe (Germany, Benelux and the ‘Club Med’). The strongest sceptics, moreover, were in those countries where the agricultural and budgetary costs of enlargement were concentrated. The general conclusion: it is easy to indulge rhetorical idealism when measurable economic and geopolitical benefits push policy in a similar direction. Third, the geopolitical and economic benefits of enlargement to existing member states come at a quite limited cost to the EU-15, in large part because existing member governments used their bargaining power to limit their liability. Industrial trade, for example, had already been largely liberalized with little disruption to the EU’s sensitive sectors such as steel and textiles. Safeguard measures for EU producers under the association agreements will thus disappear largely unnoticed. Agricultural trade has also been almost fully liberalized with few disruptions; indeed, it is the new members that worry about the dumping of cheap produce after enlargement, in part as a result of differential subsidy rates. Even for some of the key players that seem to have the most to lose, the costs do not outweigh the benefits. Germany, for example, with its high unemployment and proximity to labour from the East, may face adjustment costs in the short term, but along with Austria it is predicted to have the highest overall permanent net increase in GDP from enlargement (see Vachudova 2000: 66). The general conclusion: it is easier to engage in rhetorical idealism when the economic costs are marginal, or have already been paid. There is, of course, the visible and controversial matter of sharing the EU’s expensive financial transfers with new members – but here is where bargaining power was most important. As we have seen, the outcome of apportioning monies from the EU’s Structural and Cohesion Funds, and from the Common Agricultural Policy, between old and new members has come largely at the expense of the new members, whose poor regions and poor farmers have had to accept a phase-in of transfer payments.8 The EU has hammered out a compromise between recipients, contributors and reformers, much as it did in past rounds of enlargement. To be sure, there will also be losers among traditional beneficiaries of the CAP in Western Europe. But here the pressure of enlargement dovetails with the longstanding if slowly moving trend (powered by the fierce desire of several existing EU members and the EU’s trading partners) towards CAP reform–a trend that reflects, ultimately, the declining number of farmers in Western Europe and renewed pressure from net contributor countries such as Germany.9 As with the accession countries, the highest costs among the EU-15 may be political rather than economic. Enlargement is unpopular with EU voters, many of whom associate it with rising illegal immigration, international crime and unemployment. While there is little evidence that enlargement will contribute measurably to any of these problems (to the contrary!), EU politicians nonetheless had to satisfy restive publics. In the short term, the asymmetry of power between the EU and the candidates in the accession process made such accommodation relatively easy: new members are being kept out of Schengen for many years; they

206 Andrew Moravcsik and Milada Anna Vachudova are required to reinforce their borders; and they will wait for seven years after accession before their citizens enjoy the right – at least in the abstract – to live and work anywhere in the EU. Before the decade is out, the issue may disappear as stagnant population growth in the EU is likely to leave old members scrambling to attract workers from the new members or third countries. Overall, there is little reason to believe that enlargement runs counter to the interests of either existing or new members. Each is acting, as did their predecessors in earlier rounds of enlargement, in response to structural imperatives predicted by their economic and geopolitical positions and their interstate bargaining power.

Consequences for EU decision-making Enlargement, however, is not the end of the story; it is the beginning. This is clear in historical perspective. Once in, new EU members have tended over the years to do substantially better for themselves, primarily because they can work more effectively to promote their interests within formal decision-making rules. Membership mitigates, at least in part, the power asymmetry between core and peripheral members of the EU. The broad trend in EU politics over the next two decades is likely to be influenced by this shifting balance of power. Again, basic bargaining theory provides an instructive guide. EU members can enact treaty change only by unanimity. In any such exercise, therefore, each EU member wields substantial bargaining power vis-à-vis their EU partners. While each is formally equal, the precise distribution of bargaining power depends on patterns of asymmetrical interdependence. Specifically, it reflects the extent to which various countries favour new reforms. (Here the threat of expulsion from the EU has but a fraction of the credibility of the threat of exclusion from joining at all.) Typically the core members and the richer countries have proposed and most intensely favoured new initiatives (e.g., the Single European Act, the single currency, strong regulatory protection, a common policy on immigration, foreign policy cooperation), thereby casting the newer and poorer member states in the role of effective veto players. Small-country veto players, not least new members, are therefore likely to find themselves in an advantageous position: they can demand a side-payment in exchange for lifting their veto and granting their support. The result, theory predicts and history confirms, is likely to be a series of concessions and side-payments from core countries. Over the years, this power has been wielded by successive applicants in different ways, but with broadly similar consequences. In 1975, two years after the Tory government under Edward Heath had negotiated British entry – on terms so strikingly unfavourable that Britain, though never a wealthy country by per capita EU standards, has been a net contributor to the EU budget ever since – a Labour government under Harold Wilson called for a referendum. Afraid that the British would vote no, thereby embarrassing the entire institution and triggering a wholesale renegotiation, the French and Germans established a system of regional funding that transferred resources to Britain. Public-spirited justifications were

Preferences, power and equilibrium 207 later concocted, but Helmut Schmidt was more brutally honest when he referred to regional policy as a bribe covered only by ‘swimming trunks with “regional policy” written on them’ (Moravcsik 1998a: 258). In successive waves of negotiation, the Greeks, Spanish, Portuguese and Irish exercised their power in even more explicit ways.10 The ‘Club Med’ countries threatened to block various initiatives – the Single European Act, the Maastricht Treaty – unless financial transfers were upped. The result was the construction of a set of international financial transfers on a scale unknown since the Marshall Plan. At their height, structural funds accounted for 8 per cent of Portuguese GDP (Lange 1993). There is every reason to believe that the bargaining power of the EU’s new Eastern members has improved since they joined, and there is little reason to doubt that they will use it. Already in 2004 we saw Poland join forces with Spain to defend its representation in the European Council. Indeed, the veto threat is in many ways likely to be greater than in the past. The ten new members (along with next-in-line Bulgaria, Romania and Croatia) are highly diverse, but they are also numerous and almost certain to agree that any financial advantages old members enjoy over them should be reversed. If they join forces, they will collectively have the ability to block unanimous votes, such as those on budgetary matters. Since the EU did not manage to settle the budget for 2007 onwards before the 2004 enlargement, the ten new members will be full participants in the next epic round of budgetary negotiations. Moreover, they will also be able to block votes by Qualified Majority (108 out of 345 = 31 per cent) in a quite unprecedented fashion – a reflection of the radical over-representation of smaller countries in the EU system – though this would change if the new EU constitution were ratified. The long transition periods and unequal benefits currently being imposed on the new members have instructed them that only by playing tough in EU bargaining can they get a better deal, just as they learned in the 1990s that only full membership would give them full access to the EU market (Vachudova 2005: ch. 4). For all these reasons, new members are nearly certain to deploy their voting power in an effort to secure a greater share of EU spending. Below, we consider to what extent they are likely to succeed. The conventional view is that the increase in the number of member states and the greater diversity of their views will not simply create pressure for financial transfers, but will cause a breakdown or gridlock in the EU’s decision-making process (see Wallace and Wallace 1995). The proper answer, some maintain, is more qualified majority voting (QMV) (though this would not, as we have just seen, be enough to avoid a concerted effort by new members to hold up legislation). While the precise level of transfer payments is difficult to predict, we argue in this section that wholesale pessimism about the viability of EU decision-making with twenty-five or more diverse members is greatly exaggerated. Diversity of interest, not the number of members per se, is the real issue. To be sure, some believe that the threat of gridlock increases with the number of actors because the threat comes from the random likelihood of an individual veto under unanimity, which increases exponentially as the EU enlarges.11 Yet – the cases of Thatcher’s Britain under agricultural subsidies, Greece over Macedonia, and the

208 Andrew Moravcsik and Milada Anna Vachudova Irish referendum notwithstanding – the binding constraint on EU policy-making is not generally imposed by individual vetoes cast by lone recalcitrants. The constraint on EU legislation generally stems instead from the level of conflict of interest among blocks of states. Thus if there is a threat to effective decision-making, it would come from the increasing diversity of EU member-state interests after enlargement and, within that diversity, an effective block of new states with divergent preferences (see Moravcsik 1998b). Many view this as threat to the smooth functioning of the EU primarily because new members are unlikely to support great strides forward in European integration. And, indeed, since joining in 2004, the new member states are working to satisfy the requirements for membership in Schengen and in the EMU, and are hardly on the lookout for additional tasks. None, moreover, are particularly enamoured with the EU’s supranational institutions. Euroscepticism is rising among applicant countries that have endured pressure for unpopular concessions in the negotiations, and that have received stiff report cards from the Commission every autumn for almost a decade.12 Yet this is unlikely to cause a logjam, let alone threaten the current achievements of the EU, for three reasons. First, the new members are not all that unruly. Budgetary policy aside, there is little evidence that they will import divergent or destabilizing policy agendas into the EU (Zielonka and Mair 2002). On most issues they will instead join existing coalitions. This of course means that certain voting coalitions will be strengthened. In some areas, such as immigration, new members and old members tend to see eye to eye: keeping foreigners out is popular, in both East and West.13 Elsewhere there may be some fascinating twists and turns. Poland may turn out to be France’s greatest nemesis in the competition for agricultural subsidies, but it could presumably also be France’s staunchest ally in preserving a generous CAP. At most this would mean a slow-down in further integration, not a threat to the existing acquis, however, since most existing EU policies are deeply enough embedded in both the laws and the societies of the member states as to be effectively irreversible.14 Second and more fundamental, even without enlargement, it is unlikely that the EU would be in a dynamic period. Even the core member states have no consensual ‘grand project’ for European integration. Nor would it be easy for new members to employ their voting power in QMV to block legislation, since the internal market is largely complete and legislation moves forward at a slower pace than it did ten years ago. Today EU governments are instead prioritizing policy areas that lie largely outside of the first pillar, such as foreign policy, immigration policy and monetary policy.15 And even if they did have important projects in mind, the core EU member states – notably Germany – have little financial capacity to fund an increase in structural programmes (Ferguson 2004). Third, in precisely these areas of current interest outside the first pillar – and some within it – flexible institutional mechanisms other than majority voting can be used to combat gridlock. The trend is toward differentiation, multitrack structures and ad hoc arrangements. In recent years, nearly every major initiative in the EU has involved (or has provisions to involve) only a subset of EU members:

Preferences, power and equilibrium 209 EMU, social policy, foreign policy, environmental policy, etc. In many of these areas – foreign policy and flanking policies to EMU being prime examples – uniformity is not required for effective policy-making. From the perspective of collective action theory, the EU in these areas is more about coordinating ‘coalitions of the willing’ than avoiding ‘free riding’. Isolationist new members can sit it out with neutral old members, countries with a geographical interest and expertise can work together – and no harm is done. Finally, and most cynically, member governments no doubt favour flexibility, though they do not say so in public, as a means to avoid placing themselves in a position where poorer countries can extort financial side-payments. Overall, as Heather Grabbe has argued, flexibility provides an institutional mechanism to ensure greater decision-making efficiency when ‘the ability and willingness of member-states to be integrated in the EU’s policies . . . vary much more than in the current Union’ (Grabbe 2002: 115). It is easy to offer conjectures about scenarios whereby increased diversity will alter the EU’s institutions, politics and culture. But few withstand close analysis. Enlargement is in fact more likely to reinforce current EU trends toward slower legislative and reform output, greater budgetary conflict over structural funding, more pressure to reform the CAP, greater ‘pillarization’ of governance, a stronger Council vis-à-vis the Commission, more recourse to flexibility and coalitions of the willing, a shift in focus from deepening to widening – and, above all, an emergent ‘constitutional compromise’ (or, as one would say in the UK, a ‘constitutional settlement’) in which the policing of markets is internationalized but social, cultural, educational and other policies remain largely national (Moravcsik and Nicolaïdis 1999; Moravcsik 1998b). Die-hard federalists view this compromise as a prima facie sign of failure; they have provoked a constitutional convention to reinspire Europeans to move the metaphoric ‘bicycle’ of European integration forward. But it’s not a failure. Instead of proving Europe’s constitutional compromise bankrupt, enlargement reveals its maturity and durability. This is true in the sense both that further deepening is no longer necessary to solidify prior reforms, and that widening to include new members, for all of their diversity and backwardness, takes place with relative ease and without a major change of course. At the same time, the EU will have had a hand in building the most unified, prosperous and free European continent in modern history.

Notes 1 This is an enlarged and revised version of an article that appeared in 2003 in East European Politics and Societies, 17(1): 42–57. 2 This is a speculative claim, of course. For the case, see Garton Ash (1998); Vachudova (1999); and Moravcsik (2002). 3 This is distinct from the classic realist focus on the use of overall ‘capabilities’ to back credible threats of costly coercion (e.g., sanctions, military force), which are simply not credible in the EU context. Coercive bargaining of this type is essentially unknown in the EU. For an otherwise insightful analysis that conflates these two processes, see Gruber (2000).

210 Andrew Moravcsik and Milada Anna Vachudova 4 On the interrelationship between economic and geopolitical goals, see Moravcsik (1998a: 472–501). 5 Greece, which entered alone under unusual circumstances, is an exception. 6 The association agreements signed in the early 1990s were a start. They imposed long transition periods for the phase-out of trade barriers in precisely those sectors where the Eastern Europeans had something to export but the EU had powerful interest groups to protect: steel, textiles, chemicals and agriculture. For an overview of the EU’s policy towards its Eastern neighbours, see Sedelmeier and Wallace (2000). 7 From an empirical perspective, Schimmelfennig’s argument is intriguing. Like many empirical analyses resting on norm-based arguments in the field of international relations today, however, it does not distinguish two situations – one in which the promulgation of norms causes subsequent norm-conforming behaviour and another in which long-term structural factors cause both the initial promulgation of the norm and the subsequent behaviour. Arguments like that of Schimmelfennig rest, therefore, to a precarious extent on the hypothetical counterfactual that alternative policies would have better served the ‘national interest’ of Western European governments. The empirical analysis of this episode therefore remains open. 8 In an attempt to gain extra bargaining leverage on the model of Britain in 1975, the Polish government warned in 2001 and 2002 that, even if Polish farmers would be better off getting into the EU in 2004 with much lower payments than old member farmers, in these circumstances the referendum on entering the EU might not pass (Vachudova 2001b). The EU, however, refused to improve the terms for farmers, though it did give Poland some minor concessions in other areas. 9 The 2002 Eurobarometer polls, for example, show that the old policy areas of agriculture and regional funds are of little interest to most voters. See Grabbe (2002: 114). 10 For one speculation about the nature of the linkages, see Lange (1993). 11 Interview with Michel Petite, 1998. This argument recurs in many Commission publications. For the political science orthodoxy on numbers, see Oye (1986). This argument, following the institutionalist paradigm, assumes high transaction costs. For the empirical evidence supporting an opposing (low transaction cost) assessment of EU treaty amendment, one more consistent with this analysis of enlargement, see Moravcsik (1999). 12 In the past, small states have often voted in their self-interest and supported the Commission against the Council, because larger states can more easily dominate the Council. Two circumstances are different: (1) Commission positions may now be less consistent with the interests of the new members than they were with the interests of the Benelux countries in the early years; (2) the relative attractiveness of the Commission as an advocate may decline as the number of smaller, poorer states in the Council increases. 13 The notable exception is Poland, which has kept a remarkably open eastern border, and which is being forced to close that border as a condition of EU membership. Overall, however, the balance is difficult to draw, since little work has been done on how new members may alter the existing balance of power, particularly on issues where decisions are taken by QMV. 14 An exception is agricultural policy, where substantive policy goals will eventually dictate reform. Yet even this natural retrenchment is difficult to engineer. 15 EU policy-making on immigration straddles the first and third pillars.

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10 Geopolitics and the eastern enlargement of the European Union1 Lars S. Skålnes

Introduction Developments in the European Community (EC)/European Union (EU) continue to challenge international relations theory. Despite three decades of scholarly efforts to construct a comprehensive framework within which various aspects of the EC/EU can be systematically analysed, the EU continues to confront analysts with new puzzles that threaten to undermine these efforts. One such puzzle is the enlargement of the EU to include countries in Eastern Europe. This chapter argues that a focus on security or geopolitical considerations – specifically the need to promote stability in Eastern Europe while maintaining influence and power in the Community/Union – explains both the decision to enlarge to the east and the conditions attached to such membership. Other explanations, particularly those that draw on constructivist or sociological insights about identity, values and norms, also offer an account of enlargement and the membership conditions. I argue, however, that a focus on geopolitical considerations provides a superior explanation of two aspects of the decision to enlarge the Community/Union to the east: first, the timing of the decision, reached at the 1993 Copenhagen European Council, and, second, the reconsideration of enlargement strategy, at the December 1999 Helsinki European Council, to open accession negotiations with countries that had been declared unfit for such talks in 1997. Constructivists have argued that ‘the bulk of [the] literature [on why the EU decided to open enlargement negotiations with the Eastern European countries] is underpinned by a maybe surprisingly strong consensus that this question cannot be answered in a rationalist, materialist framework’ (Schimmelfennig and Sedelmeier 2002: 520–21, ch. 1 this volume). I depart from this consensus and offer a rationalist explanation focused on geopolitical considerations, considerations hitherto too often ignored in both the constructivist and the rationalist literature on the EU’s eastern enlargement. The discussion proceeds as follows. First, I specify some hypotheses that follow from a focus on security considerations. Second, I explain why the European Community initially was reluctant to commit itself to an enlargement to the east. Third, I argue that the Community decided to enlarge in 1993 at the Copenhagen Conference because of fears that the reform process was stalling in Eastern Europe

214 Lars S. Skålnes as well as by virtue of the lessons drawn from the Yugoslav crisis in 1991–2. Fourth, I explain why formal accession talks were started in 1998 with five Central and Eastern European (CCE) countries, the Czech Republic, Estonia, Hungary, Poland and Slovenia, while a decision was made to exclude five other CEE countries, Bulgaria, Latvia, Lithuania, Romania and Slovakia, and why this latter decision was revoked in the wake of the Kosovo crisis in 1999. Fifth, I contrast the geopolitical explanation with liberal intergovernmentalism and constructivism. I conclude with a discussion of some additional implications that follow from a geopolitical framework and a caveat with respect to the nature of the evidence presented in this paper.

Geopolitical interests and the transformation of Eastern Europe Although he is not concerned with questions of enlargement of the EC/EU, Andrew Moravcsik has with particular clarity outlined the hypotheses that can be derived from a geopolitical perspective (see Moravcsik 1998: 27–35). I draw in part on his discussion in this section, and modify it to take account of the specific problem of designing EC policies that responded to the developments in Eastern Europe. Relying on some of Moravcsik’s hypotheses has the benefit of reducing the danger that hypotheses are specified in such a way as to stack the deck in favour of a geopolitical explanation. Because space is limited, I will focus on the most important hypotheses in this section, leaving for the conclusion a brief discussion of some additional hypotheses. According to the geopolitical framework, the position of the EC/EU members on the question of eastern enlargement should be a function of politico-military threat.2 The main such threat after the fall of communism was that the wrenching changes brought about by the political and economic transitions taking place in Eastern Europe would lead to political instability and the abandonment of reform as well as to nationalist conflicts along the EC’s borders. The fear was that instability and conflict would have spillover effects that would pose a security threat to Western Europe. This was a particular problem for those countries such as Germany that shared borders with Eastern Europe, as it was likely that they would be most affected by instability (Friis and Murphy 1999: 220; Grabbe and Hughes 1998: 5). Thus, while instability posed a threat to Western Europe as a whole, geographical proximity to Eastern Europe increased the threat. The belief among EC policy-makers was that engagement with Eastern Europe, whether in the form of economic aid, trade agreements or full membership, could promote stability there, in part by strengthening the political position of those Eastern European politicians who favour democracy and a market-oriented economy. The various forms of engagement were associated with varying levels of cost, in the form, say, of increased competition for domestic firms, the need to accept institutional reforms, reduced levels of influence in an expanded EU, and so on. EC members weighed these costs against the benefit of increased stability. Given that geographical proximity increases threat and given the belief that engagement would

Geopolitics and eastern enlargement 215 help reduce it, EC members bordering on Eastern Europe should favour deeper and thus costlier engagements (such as enlargement) while those further removed should favour shallower engagements (such as aid and trade). This leads to the following hypothesis. Hypothesis 1: The higher the threat, the more current members should favour deeper (costlier) engagements with Eastern European countries. Meeting a threat, however, was not the only geopolitical consideration EC members had to take into account when deciding how far to go along the path to enlargement. Eastern enlargement will affect the security and power of the current members in several ways (Gordon 1995: 46–9). First, it is likely to shift the balance of power in the EU in favour of Germany. Germany has traditionally had close economic and political relations with Eastern Europe, and enlargement might be expected to increase support for German positions in EU decision-making. Germany also stands to gain the most economically from eastern enlargement. Germany is by far the most important trading partner for the countries in Eastern Europe, and will benefit the most from the increased trade that will follow enlargement. Enlargement will also create a political environment conducive to foreign investment, a consideration particularly important to Germany given its large investments in Eastern Europe. The increase in German power is a particular problem for France, which has sought to use the EC/EU as an instrument to bind Germany to policies deemed to benefit France. The need to respond to the changes in Eastern Europe after the fall of communism threatened to undermine the French strategy of ‘deepening’ the European Community by creating a European Union. At the same time, however, a French commitment to ‘widening’ the Community to include Eastern Europe was necessary to maintain French influence in Eastern Europe and prevent Germany from establishing a dominant position there. If we assume that states would prefer policies that maintain or increase their influence, we have the following hypothesis. Hypothesis 2: States whose power and influence is likely to diminish as a result of enlargement will oppose it, whereas those whose power and influence will increase will favour it.3 It should be emphasized that the considerations underlying hypotheses 1 and 2 might lead in different directions. Thus, a state might favour enlargement to reduce security threats, while opposing it because it will diminish their power in the EC/EU. How this conflict is resolved should be a function of the level of threat, that is, the higher the threat of instability, the less opposition there should be to enlargement. As long as the level of threat varies over time, the salience of the considerations underlying hypothesis 2 should vary as well, something that should be reflected in policy stances and thus be amenable to empirical analysis. If the need to find solutions to geopolitical problems was the main consideration

216 Lars S. Skålnes motivating EC/EU policies with respect to eastern enlargement, we would expect the timing of these policies to reflect their role as solutions to the problem of instability and regional conflicts in Eastern Europe. Thus, important new initiatives in policy should follow important geopolitical events that one would expect would lead policy-makers to reassess the threat of instability and conflict. This leads to hypothesis 3. Hypothesis 3: Shifts in preferences and policies should follow major geopolitical events that reveal new information.4 The following three sections discuss whether the evidence supports the hypotheses.

Deepening versus widening Starting in 1989, in response to the collapse of communist regimes in Eastern Europe, the EC/EU pursued policies designed to undergird economic and political reforms in Eastern Europe. By making these policies contingent on (continued) political and economic reforms, the policies were designed to promote domestic reforms and, by extension, international stability and security in Eastern Europe. While the goal of promoting stability and security has remained constant, the nature of EC/EU policies has varied significantly over time. Although the Eastern Europeans sought EC membership from the very start, before 1993 the EC/EU refrained from making any commitment to an eastern enlargement. The main reason was that the threat of instability was low enough that EC members such as France, which did not share borders with Eastern European countries, could afford to adopt policy positions designed to preserve or improve their influence on EC policy-making. The absence of a strategic imperative also allowed EC members to open up the policy process to pressures from domestic interest groups, limiting the freedom of the member states to design policies to meet the challenges posed by the political and economic transformations taking place in Eastern Europe. This was particularly evident in the trade negotiations conducted with the Eastern European countries. The result was that the EC refrained from making a commitment to an eastern enlargement. The evidence in this section thus provides support for both hypotheses 1 and 2. In the early 1990s, there was no agreement among the three major EC members that enlargement was desirable. Whereas France favoured a deepening of the Community eventuating in a political union before considering enlargement to the east, Great Britain favoured a widening over deepening. The British were suspected of supporting widening in order to make deepening more difficult (Grabbe and Hughes 1998: 6). Germany straddled the two positions, favouring both a stronger union and enlargement to the east. Concerned about instability in Eastern Europe and the negative consequences this would have, Germany advocated that the Community act quickly in enlarging to the east. The French position in favour of deepening was a response to German unification and motivated in large part by a desire to contain Germany within a

Geopolitics and eastern enlargement 217 political union. Enlargement to the east, the French feared, would shift the balance of power in the Community in favour of and make it more difficult for France to contain Germany. Enlargement, that is, would undermine the French project of ‘deepening’ so as to bind a united Germany more firmly to West and thus assuage French worries about German power in the wake of German unification. Economically, too, France stood to gain relatively little from an eastern enlargement. Enlargement threatened to reduce the benefits to France of the Common Agricultural Policy (CAP) (de la Serre and Lequesne 1993: 146; Gordon 1995: 49; Kramer 1993: 221–2; Smith 1999: 89–90; Sutton 1993: 6; Tiersky 1992: 133; Vernet 1992: 659), and its agricultural products would face stiff competition from Eastern European farm goods. In large part because France lacks Germany’s historic political and economic ties to the region, it has lagged far behind Germany with respect to penetration of Eastern European markets, and French investors have shown little interest in the region (Brada 1991: 31; Gordon 1995: 47–8). The security benefits of enlargement were also considerably smaller to France than to Germany. In contrast to Germany, France shares no borders with Eastern European countries, making it less vulnerable to illegal immigration and other consequences of instability. Initially, then, the three major EC powers could not agree among themselves on a commitment to eventual membership for the Eastern European countries. Germany and Great Britain, supported by Denmark, favoured enlargement. France, supported by in particular Spain, Portugal and Italy, opposed it (Smith 1999: 113, 118, 120–21). The lack of agreement left the field open to the EC Commission, headed by Jacques Delors, which by default took the lead in formulating the initial EC policy towards Eastern Europe, a policy combining trade and aid (Kramer 1993: 222). The Commission first proposed to conclude trade and economic cooperation agreements with those countries deemed to have embarked on political and economic reform. The agreements discriminated among countries mainly based on how far a country had moved along the path of reform. The agreements were accompanied by economic aid, in July 1989 to the most advanced reformers, Hungary and Poland, and later extended to other Eastern European countries as they embarked on the reform path (Kramer 1993: 222–5; Smith 1999: 69–70). Trade agreements and aid, it quickly turned out, did little to satisfy the Eastern Europeans, who wanted closer ties and eventual EC membership. In response to their dissatisfaction, the EC offered association agreements, later termed Europe Agreements. These agreements could be regarded both as the first step towards eventual membership or as a permanent solution and thus as a way to prevent enlargement (Baun 2000: 31–2; Sedelmeier and Wallace 1996: 367, 370; Smith 1999: 91). With the exception of Germany and Great Britain, most of the member states opposed any mention of membership in the agreements. The Commission agreed with the majority, taking pains to emphasize in February 1990 that there was ‘no link either explicit or implicit’ between association and membership. ‘[M]embership is not excluded when the time comes . . . but it is a totally separate question’ (Sedelmeier and Wallace 1996: 370).

218 Lars S. Skålnes In return for additional trade concessions and a political dialogue, the prospective associates had to offer ‘practical evidence of their commitment’ to the rule of law, human rights, a multi-party system, free and fair elections and a market economy. In 1990, only Czechoslovakia, Hungary and Poland could offer such evidence. Negotiations opened with these countries in December 1990 and agreements were signed in December 1991 (Baun 2000: 31–2; Kramer 1992: 14– 15; Kramer 1993: 228; Sedelmeier and Wallace 1996: 367–9; Smith 1999: 93). In contrast, Romania and Bulgaria were left out in the cold because they did not meet the requirements. The attempted coup in the Soviet Union in August 1991, however, prompted the Commission in early September 1991 to propose Europe Agreements with these two countries as well (Smith 1999: 97). During the attempted coup, the Council of Ministers also broadened the Commission’s mandate in the negotiations with Poland, Hungary and Czechoslovakia. The situation in Moscow underscored the importance of bringing to a conclusion the stalled negotiations and made a commitment to more extensive trade concessions possible (Reinicke 1992: 94). By December 1991, however, the EC governments had recovered from the shock of the attempted Soviet coup, and, under pressure from domestic interest groups (Brada 1991: 28–9; Robinson and Wolf 1991; Sedelmeier and Wallace 1996: 371–2), reverted to their previous intransigent stance. The EC member states realized that economic concessions would be necessary if the EC was to influence the reform process in Eastern Europe and thereby promote stability. Thus, they supported at the rhetorical level at least their ‘return to Europe’. When push came to shove during the negotiations that led to the trade and cooperation agreements as well as to the Europe Agreements, however, narrow economic interests took over and the concessions offered were meagre. Although they eventually relented, France, Portugal and Spain, in particular, dragged their feet (Baun 2000: 35; Kramer 1992: 15, 15 n. 4; Sedelmeier and Wallace 1996: 371; Smith 1999: 93–6, 102). In sum, the fact that the EC unfailingly made the various agreements conditional on the pursuit of political and economic reforms is consistent with the claim that EC policy towards Eastern Europe was motivated in large part by a desire to promote stability in Eastern Europe. The different positions of, in particular, France and Germany on the issue of eastern enlargement are consistent with hypothesis 1. Germany’s geographical proximity to Eastern Europe meant that the threat posed by instability was higher than it was for France. The positions of Germany, France and Great Britain support hypothesis 2. Great Britain seems to have regarded enlargement as a way to weaken the supranational aspects of the EU, which would help it to shape the future direction of the EU to accord with its interests. France opposed it because it perceived that its influence would decrease. Germany’s stance in favour of enlargement may have been motivated either by a desire to promote stability (hypothesis 1) or a desire to increase its influence (hypothesis 2), or a combination of both. The easing of the EC’s negotiating stance in the wake of the attempted coup in the Soviet Union as well as the decision to open Europe negotiations with Bulgaria and Romania is consistent with

Geopolitics and eastern enlargement 219 hypothesis 1: as threat increases, the benefits of deeper engagements increase as well, leading to a shift in favour of such engagements.

The decision to enlarge In this section, I explain the timing of the Copenhagen decision – why the EC decided in the summer of 1993 to commit itself to an eventual eastern enlargement – in terms of shifting geopolitical calculations. Specifically, I argue that the commitment to an eastern enlargement was driven by a shift in strategic assessment prompted by the lessons drawn from the conflicts in the wake of the break-up of Yugoslavia and by the first signs that public support for domestic reforms in Eastern Europe was weakening. These events prompted a strategic reassessment, which is reflected in the Copenhagen decision. Economic and political considerations, which until then had served as obstacles to enlargement, were overcome. Faced with continuing pressure from the CEECs that the Community ‘set out a timetable and conditions for future accession’, the European Council meeting in Lisbon in June 1992 requested that the Commission ‘evaluate progress made in the development of the Community’s partnership with Central and Eastern Europe and . . . report to the European Council in Edinburgh suggesting further steps.’ In the report, dated 2 December 1992, the Commission recognized the importance of the security dimension, arguing that ‘intergovernmental settings’ such as those provided by the North Atlantic Cooperation Council, the Forum of Consultation of the Western European Union and the Conference on Security and Cooperation in Europe ‘do not respond fully to [the East European] desire to belong to a coherent security structure. For this, they count increasingly on the Community and on the future European Union.’ It recommended that ‘The European Council should now confirm that it accepts the goal of eventual membership in the European Union for the countries of Central and Eastern Europe when they are able to satisfy the conditions required.’ Such confirmation would ‘provide encouragement to those pursuing reform and make the short term economic and social consequences of adjustment easier to bear.’ It would ‘also provide a stimulus to investment and discourage excessive nationalism.’ Decisions on who would qualify for membership would rest on their ‘capacity . . . to assume the obligations of membership’ as well as progress in implementing economic and political reforms (European Commission 1992: 1–3). The December 1992 Edinburgh European Council, while taking note of the Commission’s report, postponed until the Copenhagen meeting in June 1993 the issue of eventual membership. The European Council in Copenhagen accepted the Commission’s proposal that membership would be granted as soon as associated countries were able to satisfy the requisite economic and political conditions, while adding two additional conditions: first, that the EC would have the capacity to accept new members, and, second, that enlargement would not come at the expense of further European integration (Smith 1999: 118). At Copenhagen, a decision was also made to accelerate the opening of EC markets specified in the Europe Agreements by reducing tariffs and increasing the quotas on all products.

220 Lars S. Skålnes This applied, although to a lesser degree, even to coal and steel, textiles and agriculture, the removal and lowering of which had met with such determined opposition during the negotiations of the Europe Agreements (Baun 2000: 45). To insulate the decision-making process from the interest-group pressures that had limited the concessions during the Europe negotiations, the decisions were made by high-ranking officials who were responsible for making concessions across a range of products. Previously, the negotiations had relied on technical experts at the working-group level, whose task it had been to propose reductions in tariffs and quotas on individual product groups. This system had made it easier for sectoral interests to have their demands for protection heard (Sedelmeier 1994: 27; Sedelmeier and Wallace 1996: 376; Smith 1999: 179). Analysts have pointed to several factors to account for the shift in the EC’s strategy towards Eastern Europe. First, they argue that pressure from the CEECs played an important role (Baun 2000: 46; Sedelmeier and Wallace 1996: 375). However, the CEECs had as early as 1990, before the start of the association negotiations, made clear their ambition to join the EC, pointing to the important role membership would play as an anchor for stability and reform. An explanation relying on this factor cannot account for why the response at Copenhagen was different than it had been during the negotiations of the Europe Agreements. Second, criticism from academic experts of the inadequacies of EC policies in general and the Europe Agreements in particular is claimed to be another contributing factor to the shift in strategy (Baun 2000: 45; Sedelmeier and Wallace 1996: 374). The experts did not agree (Smith and Wallace 1994: 438), however, meaning that arguments were provided both favouring and opposing enlargement. Explaining why some arguments were embedded in policy while others were not requires that we look to other factors besides expert criticisms and opinions, reducing the explanatory power of this variable. Third, several member states favoured it (Baun 2000: 46). This was, however, not new in 1993. Fourth, ‘political engineering and leadership’ by the Commission, working closely with member states favouring enlargement, played an important role (Baun 2000: 46–7; Sedelmeier and Wallace 1996: 375). What needs to be explained is why the Commission, which had emphasized in 1990 that the Europe Agreements did not imply a commitment to membership, changed its position on this question. Finally, Copenhagen satisfied the member states sceptical of enlargement that a commitment to enlargement entailed no concrete steps that would make it a reality in the near future (Torreblanca 2001: 322, 328–30). The supporters of enlargement had, however, never argued that enlargement should take place before the Eastern Europeans and the EC were ready, nor had they demanded a concrete timetable. What they had pushed for was a commitment to enlarge in principle, a commitment that Copenhagen embodied. The 1993 compromise, that is, had been possible earlier. Two factors in particular helped persuade the European Union that a commitment to enlargement could no longer be postponed. First, the rise of protectionist

Geopolitics and eastern enlargement 221 pressures in Eastern Europe increased the urgency of encouraging and helping to lock in reform through membership in the EU. Second, and perhaps more important, strategic priorities changed in the wake of the break-up of the former Yugoslavia. Protectionist pressures and regional instability The introduction of economic reforms in Poland, Hungary and Czechoslovakia initially met with little domestic opposition. The ‘honeymoon’ for free trade soon ended, however. Responding to pressures from interest groups, Czechoslovakia, for instance, reimposed some quantitative restrictions on agricultural goods (Gács 1994: 137–8, 141–3). Similarly, domestic pressures led Hungary to increase protection for both the coal and textile industries, and, in 1992, to introduce steel quotas on imports from other Eastern European countries (ibid.: 139–40). The new Polish customs law passed in 1991 raised average tariffs from 8.6 per cent to 13.6 per cent.5 Further tariff increases on manufactured goods followed in 1992 in response to interest-group pressures (ibid.: 146). Declining support for economic reforms in Eastern Europe, coupled with the election of former communists in several Eastern European countries in 1992 and 1993, provided an important incentive for the EC to rethink the question of membership for the CEECs (Baun 2000: 47; Sedelmeier and Wallace 1996). Continued economic and political reforms were thought to be crucial to domestic and regional stability, a consideration that helped prod those EC member states still sceptical about enlargement to support it. Perhaps even more important in this regard was the EC’s failure to mitigate the conflicts, particularly in Bosnia-Herzegovina, following the break-up of the former Yugoslavia in 1991 and 1992 (Baun 2000: 47; Sedelmeier 1994: 26–7; Sedelmeier and Wallace 1996: 375). The worry was that the Yugoslav conflict and destabilization in Eastern Europe more generally would lead to massive flows of refugees westwards, in the process perhaps exporting instability to the West (Haggard et al. 1993: 177, 189). The carrot of eventual membership in the EC, it was thought, could help provide regional stability and prevent nationalist conflicts of the kind seen in the Balkans. Thus, it is no accident that, after the outbreak of war in the former Yugoslavia, protection of the rights of minorities became one of the requirements for membership (Smith 1999: 139). In short, the stalled reforms and the conflicts in the Balkans brought on board member countries that had hitherto opposed a commitment to enlargement, most significantly, France (Baun 2000: 47; Sedelmeier 1994: 27–8; Sedelmeier and Wallace 1996: 375). France and eastern enlargement The French president, François Mitterrand, initially embarked on a policy designed to slow down eastern enlargement. The problem was that attempts to delay enlargement ran the risk of undermining French influence in Eastern

222 Lars S. Skålnes Europe. Caught on the horns of this dilemma, Mitterrand vacillated. In May 1991, for instance, France and Germany signed a joint declaration expressing support for Eastern European membership of the EC, yet only a month later, at the Prague Conference held to discuss his notion of a European confederation, Mitterrand again cautioned that enlargement to the east could not be contemplated for ‘des dizaines et des dizaines d’années’, thus seemingly confirming the fears of those who interpreted French policy as hostile to the idea of enlargement in the foreseeable future (de la Serre and Lequesne 1993: 156; Sutton 1993: 6–7; Vernet 1992: 660; Torreblanca 2001: 150). The first signs that France had adopted a more conciliatory stance regarding membership for the CEECs came in late 1991 and 1992 (Gordon 1995: 49). In a meeting with Kohl in September 1991 to discuss the conflict in Yugoslavia, Mitterrand declared that he would not oppose enlargement to the east, though he continued to warn against moving too quickly lest the EC be destroyed (Agence France Presse 1991). The fact that France since 1992 had maintained one of the largest contingents of peacekeepers in Bosnia may have contributed to a further softening of Mitterrand’s stance regarding enlargement. The difficulties of operating in Bosnia and the need for NATO operational resources led the French to reassess their relationship with NATO, a relationship that had remained more or less unchanged since the mid-1960s (Smith and Timmins 2000: 32–3). This provides indirect support for the notion that the events in the former Yugoslavia were important enough to bring about a reassessment of French geopolitical interests and strategy. The internal domestic political debate in France reflected the events in Eastern Europe as well. In the aftermath of the attempted coup against Gorbachev in August 1991, Mitterrand’s ‘status-quo’ policy towards Eastern Europe was criticized by all parties for having fundamentally misunderstood the changes taking place in those countries, thereby greatly increasing German influence there (Stark 1992: 121). Motivated by political and security considerations, rightist politicians such as Jacques Chirac, Edouard Balladur and Philippe Séguin strongly supported an eastern enlargement as early as 1992. During the election campaign that brought Balladur to power in March 1993, Mitterrand and the socialists were attacked for their outmoded ‘Cold War’ views and the ‘backwardness’ of their response to the developments in Eastern Europe (Gordon 1995: 49). Although not ignoring economic considerations (i.e., the interests of French farmers in particular), both Balladur and Chirac focused on the political aspects of EU membership. Thus, Balladur argued in a book published in 1992, some months before he took over as prime minister, that the countries of Western Europe should provide a security guarantee to these fragile young democracies; secondly, even if it may seem contrary in the short term to their own trade interests, they should help them make a success of economic reform; and, finally, they should welcome them into the [European] Community – immediately on the political plane, at the appropriate moment on the economic one. (Sutton 1994: 153)

Geopolitics and eastern enlargement 223 In another book published in 1994, Chirac sounded similar notes: ‘The European Union must open its doors to all countries of the European continent, provided of course they have adopted democracy and the market economy and that they show their readiness to participate in the shared adventure.’ Since he had long been known as a forceful advocate for French farming interests and of the CAP, it is not surprising that Chirac tempered his enthusiasm for enlargement by calling for long transition periods for Eastern European agricultural products and emphasizing that political rather than economic union should be the immediate objective (Sutton 1994: 156). One indication that the French and German positions on Eastern Europe were at least partially converging was Balladur’s proposal in mid-1993 for a ‘pact for stability and security in Europe’. Now that the inevitability of enlargement has been accepted, the main objective of the proposal was to promote the resolution of minority conflicts and border disputes and thus ensure that the EC would not be internalizing these problems in the process of enlarging to the east (Friis and Murphy 1999: 221). In an attempt to address the security concerns of the Eastern European states, Balladur envisioned that the countries with Europe Agreements would become ‘associate members’ of the Western European Union, a proposal that received German support some months later. The proposal was presented to the European Council in Copenhagen in June 1993 and became part of the Common Foreign and Security Policy (CSFP) at the December 1993 European Council meeting (Gordon 1995: 50). Nevertheless, just before the Copenhagen summit, France, although having accepted the necessity of enlargement, still seemed worried about its negative effects on the EC and on France’s position within it. Thus, France proposed that the Eastern European countries meet a series of more stringent requirements relating to the level of GNP per capita level, degree of privatization, level of social protection, inflation level and public deficit size before they could join (The Economist 1991; Smith 1999: 117). Meeting resistance from other member states, France put its concerns about German power aside and accepted enlargement, hoping thereby to maintain its influence on the process of enlargement (Smith 1999: 118). Even after Copenhagen, although it had accepted enlargement, France continued to insist that enlargement could only occur after institutional reforms in the EU. France, as well as other Mediterranean countries, also continued to worry that enlargement would shift the centre of gravity to the east and increase German influence in the EU (Smith 1999: 121). In short, the protectionist threat to continued reform in Eastern Europe and the conflicts in the Balkans in 1991–2 increased the threat of instability in Eastern Europe. To promote stability, the EC decided in 1992–3 to accept that enlargement to the east would take place assuming prospective members satisfied the requirements laid out at Copenhagen. This decision is consistent with hypotheses 1 and 3. The increased threat meant that the EC was more prone to accept a deeper or costlier engagement with Eastern Europe, as hypothesis 1 leads us to expect. As hypothesis 3 predicts, the shift in French preferences followed a major geopolitical

224 Lars S. Skålnes event, in this case the conflicts that erupted in the wake of the break-up of Yugoslavia. The evolution of the French position to favour enlargement, coupled with the continued attempts to make sure that enlargement would not undermine France’s position within the EU, is also consistent with hypotheses 1 and 2. Whereas before the Balkan conflicts France had focused on maintaining its influence within the EC, the calculus in the wake of the conflicts was different, leading it to give greater weight to promoting stability in Eastern Europe.

The 1999 Kosovo crisis and the shift in enlargement strategy Once the decision had been made to enlarge to the east, attention turned to how best to prepare the Eastern European countries for membership and to review their progress in meeting the Copenhagen requirements. In July 1997, the Commission devised a long-term strategy for enlargement, the so-called Agenda 2000. Agenda 2000 represented the first major review of the progress the ten candidates had made in meeting the Copenhagen conditions. Although no country fully met the Copenhagen criteria, five candidates – the Czech Republic, Estonia, Hungary, Poland and Slovenia – were judged to have met both the political and the economic conditions. Latvia, Lithuania, Romania and Bulgaria did not meet the economic conditions. Only Slovakia was deemed unfit for membership on political grounds (though it was close to meeting the economic conditions). Accession negotiations started with the Czech Republic, Estonia, Hungary, Poland and Slovenia in March 1998. Such negotiations would start with Bulgaria, Latvia, Lithuania, Malta and Romania ‘as soon as they have made sufficient progress in satisfying the conditions defined by the European Council in Copenhagen.’ By not including all ten countries in the first wave of enlargement, members of the European Parliament criticized the Commission for risking ‘dangerous political divisions’ among prospective members (Strasbourg 1997). The Luxembourg summit, however, rejected this argument. It took a reassessment of the politicomilitary threat following the Kosovo crisis to change EU policy. The initiative to change the policy came from the Commission president, Romano Prodi. In a speech before the European Parliament on 13 October 1999, he advocated a ‘fundamental shift’ in the EU’s enlargement strategy (Maresceau 2001: 9). A different strategy was necessary, Prodi argued, because Recent developments such as the Kosovo crisis raise broader geopolitical questions. Questions about the prospect of membership for European countries which are not yet part of the enlargement process. Questions about our relationship with other neighbours for whom membership is not an issue but with whom we want close and constructive relations. How can we best work together with them to construct a wider European area of peace, stability and prosperity? Now, as we plan our enlargement strategy, is the time to address these questions seriously. (European Commission 1999a)

Geopolitics and eastern enlargement 225 The danger in sticking to the ‘hard-line’ strategy recommended at Luxembourg was that the countries concerned, having already made great efforts and sacrifices, will become disillusioned and turn their backs on us. Their economic policies will begin to diverge, and an historic opportunity will have been lost – perhaps forever. In the changed political landscape of Europe, especially in the Balkan region, some countries may also let slip the progress they have made towards democracy and human rights, and the European Union will have seriously failed the people of those countries. (European Commission 1999a; see also European Commission 1999b) At the December 1999 Helsinki European Council, it was agreed that accession negotiations would begin with the five remaining CEECs (Romania, Bulgaria, Slovakia, Latvia, Lithuania) and Malta. This happened in February 2000. Membership still remained contingent on meeting the Copenhagen criteria. The evidence in this section is consistent with both hypotheses 1 and 3. The lesson from the Kosovo crisis was that the danger to stability was greater than had been previously thought. That is, the security benefits of starting membership talks with all ten prospective applicants (the so-called regatta option) were higher in 1999 than they had been in 1997. Consistent with hypothesis 1, the increased threat led to changes in the cost–benefit calculus and prompted EU members such as Germany to favour accession negotiations and eventual enlargement with all ten countries. Consistent with hypothesis 3, the shift in policy followed a geopolitical event (Kosovo) that revealed new information, that is, a better understanding of the severity of the threat to stability in Eastern Europe, and the role the accession negotiations could play in promoting stability.

Alternative explanations I have emphasized the importance of geopolitical considerations in explaining the EC/EU’s decision to enlarge to the east as well as the reversal of the decision not to begin accession negotiations with the countries that had been deemed unprepared for such negotiations. Prima facie, two frameworks in particular generate plausible alternative explanations for these two decisions, liberal intergovernmentalism (LI) and Frank Schimmelfennig’s rhetorical action perspective. I argue in this section, however, that they both fail to explain the two decisions. Liberal intergovernmentalism LI would expect domestic economic interests to drive the desire for enlargement (Moravcsik 1998: 28, table 1.2). Member states that would benefit the most from foreign investment in and trade with Eastern Europe should push for agreements that would promote increased economic interdependence. Because geographical

226 Lars S. Skålnes proximity is a good predictor of economic interdependence, it follows that EC members that share a common border with prospective members in Eastern Europe should favour enlargement, whereas countries further away should be less enthusiastic. This explains the difference between France and Germany well, though it does not account for the British position. To explain why France would oppose enlargement, we have to factor in the costs of enlargement, which include both the shift in the distribution of power within the EC in favour of Germany as well as the threats to the CAP posed by the accession of Eastern European countries (Schimmelfennig ch. 7 this volume: 145–6). LI explains well EC positions during the negotiations leading up to the trade and cooperation agreements and the Europe Agreements. As LI predicts, the positions were dominated by sectoral interests (Moravcsik 1998: 28, table 1.2), which explains both why the concessions granted to the Eastern European states were so limited as well as the opposition to EC membership for the CEECs. LI, however, does not explain the shift from opposition to support for membership, or why the decision was taken to open up negotiations in 1999 with those countries that had been excluded from such negotiations in 1998. According to LI, ‘in trade and agriculture, positions vary by producer concerns, with more regionally competitive producers favouring liberalization [in our case, enlargement]’ (Moravcsik 1998: 28, table 1.2). At first glance, support for this proposition seems strong. Thus, in 1992, the EC for the first time had a surplus in its trade with all five countries then regarded as first in line for membership, namely Poland, Bulgaria, Czechoslovakia, Hungary and Romania. The overall trade balance with these five countries, however, shows that the EC had been running a surplus since 1990. The latter figure is arguably the most important given the fact that what was at stake in 1993 was whether or not the EC should make a general commitment to eastern enlargement. Even if we consider only the three front-runners, Poland, Hungary, and Czechoslovakia, the EC was running an overall surplus with these countries starting in 1991, having achieved a balance in 1990 (see table 10.1) (Smith 1999: 104, 105, table 6.1). To the extent that such aggregate figures are relevant from LI’s point of view (which is perhaps doubtful), they should have been reflected in the EC’s concessions during the Europe Agreements. As we have seen, however, the EC negotiating stance was as intransigent during the Europe negotiations as they had previously been during the trade and cooperation agreements. If instead we turn to France’s trade with Bulgaria, Czechoslovakia, Hungary, Poland and Romania, again the support for LI seems strong at first glance. France’s trade balance with the five countries taken together shifts from a deficit in 1990 to a surplus in 1991 (see table 10.2). The same is true if we consider trade only with Czechoslovakia, Hungary and Poland. Looking more narrowly at trade in socalled sensitive sectors (food and agricultural products, chemicals, textiles and apparel, and steel), we see that the overall trade balance also moves from a deficit in 1990 to a surplus in 1991. This is true for food and agricultural products as well (see table 10.3). The only exception here is trade with Czechoslovakia, Hungary and Poland, which shifts to a surplus in 1992 instead of 1991. If we assume, as I

Geopolitics and eastern enlargement 227 Table 10.1 EC trade with Eastern Europe, 1988–92 (billion ECU) 1988

1989

1990

1991

1992

Poland Balance

–0.61

0.08

–0.34

1.66

1.07

Czechoslovakia Balance

–0.04

–0.17

0.12

–0.24

0.73

Hungary Balance

0.19

0.4

0.22

–0.13

0.07

Romania Balance

–1.62

–1.86

–0.14

0.45

Bulgaria Balance

0.94

0.95

0.44

0.28

0.21

Overall Balance

–1.14

0.24

1.43

2.53

–0.6

–0.2

Source: Smith (1999: 105, table 6.1).

Table 10.2 France’s trade balances (imports–exports) with Eastern Europe, 1989–92 (million $) 1989

1990

1991

1992

Poland Balance

21

221

–131

–164

Czech and Slovak Republics Balance

36

61

–115

–151

Hungary Balance

83

111

102

74

Romania Balance

334

115

47

–295

Bulgaria Balance

–79

–32

–96

–96

Overall (all five) Balance

395

476

–193

–632

Czech and Slovak Republics, Hungary, Poland Balance

140

393

–144

–241

Source: Cadot and de Melo (1995: 91, table 4.2).

have done in this chapter, that France’s acceptance of eastern enlargement was critical in reaching the decision to enlarge at Copenhagen, then it would seem that LI has an explanation for the Copenhagen decision: whereas trade had previously not been in the interest of sensitive sectors (explaining France’s reluctance to grant concessions in these sectors in the negotiations for the Europe Agreements), the threat of increased competition from Eastern Europe had proved to be unfounded as reflected in France’s surpluses with these countries.

228 Lars S. Skålnes Table 10. 3 French trade balances (imports–exports) in sensitive sectors, 1990–92 (million FF) 1990 Bulgaria Food and agric. products Chemicals Textiles and apparel Steel

Czech and Slovak Republics Food and agric. products Chemicals Textiles and apparel Steel

Hungary Food and agric. products Chemicals Textiles and apparel Steel

Poland Food and agric. products Chemicals Textiles and apparel Steel

Romania Food and agric. products Chemicals Textiles and apparel Steel

Overall (all five) Czech and Slovak Republics, Hungary, Poland Food and agric. products

1991

1992

–164.51 –79.7 17.04 12.15 –215.02

–756.19 71.22 37.58 34.54 –612.85

–418.52 13.72 94.57 10.14 –300.09

394.47 –94.02 177.02 295.46 772.93

–577.34 –100.95 –659.8 259.43 –1,078.66

–918.18 –333.64 258.38 434.7 –558.74

1,274.51 –114.77 166.76 11.94 1,338.44

1,225.16 –80.38 247.35 4.81 1,396.94

861.2 –178.3 271.91 –5.75 949.06

1,786.64 110.25 229.84 66.32 2,193.05

–299.03 –75.66 281.75 68.56 –24.38

–569.81 –360.9 317.58 26.09 –587.04

329 –170.1 218.44 134.35 511.69

–42.38 –57.06 403.98 105.06 409.6

–2,389.65 –107.44 300.63 95.01 –2,101.45

4,601.09 4,304.42 7,924.53

–1,306.29 293.9 –449.78

–2,598.26 –196.72 –3,434.96

Source: Cadot and de Melo (1995: 98, table 4.6).

The problem with this explanation is that the trade balances reflect at least in part the considerable trade barriers still in existence on Eastern European goods, barriers that the trade and cooperation agreements and the Europe Agreements did relatively little to reduce (at least regarding ‘sensitive’ goods). Membership, in contrast, would imply that these barriers would have to come down, something that would not benefit the sectors most opposed to trade concessions to Eastern

Geopolitics and eastern enlargement 229 Europe. In addition, enlargement posed a threat to the CAP, and should thus not have been in the interest of French farmers. Similar reasoning applies to the decision to open accession negotiations with the five additional countries in 1999. The greater the number of prospective members, the greater the probability that the CAP would have to be reformed (although the addition of Poland posed the greatest threat). In sum, while LI explains the limited trade concessions offered in the trade and cooperation agreements and the Europe Agreements, it does not explain the (timing of) the shift from opposition to support for enlargement at Copenhagen or the accession negotiations with countries previously considered unqualified. Constructivism and rhetorical action Constructivists have argued that the EU’s eastern enlargement and, in some cases, also the conditions placed on accession to the EU are best explained in terms of collective identity, fundamental beliefs, values and social norms (Schimmelfennig 2001, ch. 7 this volume; Schimmelfennig and Sedelmeier 2002). The most fully elaborated constructivist theoretical analysis of the EU’s eastern enlargement, Schimmelfennig’s rhetorical action perspective, rests on the notion that actors use rule-based arguments strategically, thereby joining ‘the social and ideational ontology of constructivism – in a non-structuralist, processualist variation – with rationalist instrumentalism’ (Schimmelfennig 2003: 193, 198). Becoming a member of international organizations is a question of adopting the collective identity of the organization. In the case of the EU, that means that new members must share the EU’s liberal values and adhere to its liberal norms, such as the rule of law, democracy, a market-based economy, and the peaceful resolution of international conflicts (Schimmelfennig 2001: 171–3). The emphasis on sharing a liberal collective identity leads us to expect, first, that accession conditions correspond to the EU’s liberal values and norms and, second, that countries selected for accession talks ‘match EU members and distinguish themselves from other nonmembers with regard to their adherence to the liberal community values and norms’ (Schimmelfennig 2001: 175, ch. 7 this volume: 152). The evidence supports the first expectation: the Copenhagen Council required of new members that they share the EU’s values and norms (Schimmelfennig 2001: 176). As argued above, however, making membership conditional on meeting the Copenhagen requirements is consistent with a geopolitical explanation as well. Adherence to the Copenhagen criteria would, it was hoped, promote stability and cooperation in Eastern Europe, and thus improve the politico-military security of current EU members. In other words, making membership conditional on adherence to liberal values is consistent with both a constructivist and a geopolitical perspective. Distinguishing between the two perspectives is easier if we turn our attention to other aspects of the EU’s policy towards Eastern Europe. The first aspect concerns the timing of the Copenhagen decision and the second the decision to open accession negotiations with the five remaining associates in 1999.

230 Lars S. Skålnes First, to explain the Copenhagen decision as well as the reluctance to admit Eastern European countries that characterized early EC policy, Schimmelfennig relies on a causal mechanism termed ‘rhetorical action’. Rhetorical action brings wayward actors pursuing their narrow self-interest back into the fold by making them act in concordance with their obligations as community members. It does so by confronting actors with possible inconsistencies between past rhetoric and current behaviour or past and current rhetoric, thus shaming them into compliance. This was the strategy pursued by the supporters of enlargement, that is, the Eastern Europeans, the Germans, the British and the Commission. The core of Schimmelfennig’s argument is that those who initially opposed enlargement became entrapped by their own rhetoric (Schimmelfennig ch. 7 this volume: esp. 163–5; 2003: esp. ch. 11). This still leaves unexplained, however, why entrapment was successful at Copenhagen in 1993 but had not been so during the Europe Agreement negotiations in 1991. It does not explain, that is, the timing of the shift in EC policy. Second, Schimmelfennig’s approach explains the decision to open accession negotiations with only the five front-runners in 1998, but it does not explain why the decision was made in 1999 to open accession talks with the other five associate countries that had been excluded from such talks the previous year. As Schimmelfennig (2001: 179) notes, his approach explains why Poland, Hungary, the Czech Republic, Estonia and Slovenia were included in the first round of accession talks. But, as he also points out, ‘If the sociological expectation is correct, the five CEECs selected for concrete accession talks in 1997 should . . . have distinguished themselves from the other five associated countries with regard to their compliance with the liberal norms that constitute the European international community’ (Schimmelfennig ch. 7 this volume: 152). Thus, Schimmelfennig’s approach predicts the 1997 decision to open negotiations with only the five front runners, but not the 1999 decision to open talks with the other five associates.6 That decision is better explained in terms of a geopolitical reassessment in the wake of the 1999 Kosovo crisis.

Conclusion Geopolitical considerations have motivated important aspects of EC/EU policy towards Eastern Europe. Besides the emphasis on using EC policy to promote economic and political reforms and by extension stability in Eastern Europe, geopolitical considerations explain why the EC decided to commit itself to enlargement at Copenhagen in 1993 and why accession talks were expanded in 1999 to include countries previously excluded. In so doing, a geopolitical framework proves superior to alternative explanations such as liberal intergovernmentalism and Schimmelfennig’s rhetorical action approach. A caveat is in order, however. Some of the evidence presented here is correlational in nature, and some derives from policy-makers’ public and official statements regarding their motives for adopting various policies. Because such statements may serve various political purposes, they may not accurately reveal

Geopolitics and eastern enlargement 231 policy-makers’ true motives. This means that the conclusions reached in this chapter are inevitably tentative. To alleviate the problem, I have tried wherever relevant to discuss alternative explanations. Another way to strengthen one’s faith in a particular explanation is to investigate whether it is consistent with additional observations and implications (King et al. 1994: esp. 217–18). I end by briefly considering some of these observations. According to Moravcsik, a geopolitical explanation would expect ‘EC/EU policy [to be] consistent with concurrent geopolitical policies in other forums’ (Moravcsik 1998: 28, table 1.2). NATO enlargement and EU enlargement have gone hand in hand. NATO enlargement was first proposed by German policy-makers in 1993, and later supported by the United States and other NATO members. The need to promote stability in Eastern Europe figured prominently in the debate over NATO enlargement in both Germany and the United States (Asmus 2002). Another implication of the geopolitical framework is that the ‘[k]ey actors are foreign and defense ministries, perhaps elite opinion, ruling parties, and chief executives’ (Moravcsik 1998: 28, table 1.2). The evidence presented here suggests that Kohl, Mitterrand, Thatcher, Balladur and Chirac, working with the European Commission, all played important roles in designing EC policy toward Eastern Europe. When security considerations became salient in the wake of the break-up of Yugoslavia and stalling economic reforms in Eastern Europe, they were able to overcome pressure from interest groups that had until then limited the extent of the economic concessions offered the Eastern European countries. Finally, the geopolitical framework implies that a ‘clear issue hierarchy leads officials to accord priority to efficient achievement of geopolitical goals. Efficient adaptation to security situation is seen as “necessary”’ (Moravcsik 1998: 28, table 1.2). The French domestic political debate in 1992–3 provides perhaps the best support for this implication. The right attacked Mitterrand for not paying enough attention to the security situation in Eastern Europe and for misunderstanding it. Thus, Balladur argued that the members of the EC must provide a security guarantee to Eastern Europe ‘even if it may seem contrary . . . to their own trade interests.’

Notes 1 Earlier versions of this essay were presented at the 2001 annual meeting of the American Political Science Association and the 2002 annual convention of the International Studies Association. I would like to thank Daniel Verdier and Courtney Smith for their valuable comments on these. 2 Because space is limited, I focus on the strategies of the three major powers, Great Britain, Germany and France. 3 Moravcsik (1998) does not discuss hypothesis 2. 4 See the discussion in Moravcsik (1998: 34, table 1.2). 5 At the beginning of the economic reform process, the average tariff rate had been 12 per cent (Gács 1994: 145). 6 Schimmelfennig (2003: 278) merely argues that the 1997 decision ‘probably created some institutional momentum toward opening negotiations with [the other five associates] in the near future’.

232 Lars S. Skålnes

References Agence France Presse (1991) ‘EC Can Expand but Not Too Fast: Mitterrand’, 19 September. Asmus, R. D. (2002) Opening NATO’s Door: How the Alliance Remade Itself for a New Era. New York: Columbia University Press. Baun, M. J. (2000) A Wider Europe: The Process and Politics of European Union Enlargement. Lanham, MD: Rowman & Littlefield. Brada, J. C. (1991) ‘The European Community and Czechoslovakia, Hungary, and Poland’, Report on Eastern Europe, 2: 27–32. Cadot, O., and de Melo, J. (1995) ‘France and the CEECs: Adjusting to Another Enlargement’, in R. Faini and R. Portes (eds), European Union Trade with Eastern Europe: Adjustment and Opportunities. London: Centre for Economic Policy Research, 86–122. The Economist (1991) ‘West Meets East’, 19 June: 53. European Commission (1992) Towards a Closer Association with the Countries of Central and Eastern Europe: Report by the Commission to the European Council, Edinburgh, 11–12 December 1992. SEC (92) 2301 final, 2 Dec. Brussels: Commission of the European Communities. European Commission (1999a) ‘Speech by Mr Romano Prodi, President of the European Commission, on Enlargement’, European Parliament Brussels, 13 October, SPEECH/ 99/130. European Commission (1999b) ‘Commission Sets out an Ambitious Accession Strategy and Proposes to Open Accession Negotiations with Six More Candidate Countries’, IP/99/ 751. Brussels. Available at http://europa.eu.int/rapid/start/cgi/guesten.ksh?p_action. getfile=gfanddoc=IP/99/751|0|AGEDandlg=ENandtype=PDF. Friis, L., and Murphy, A. (1999) ‘The European Union and Central and Eastern Europe: Governance and Boundaries’, Journal of Common Market Studies, 37: 211–32. Gács, J. (1994) ‘Trade Liberalization in the CSFR, Hungary and Poland: Rush and Reconsideration’, in J. Gács and G. Winckler (eds), International Trade and Restructuring in Eastern Europe. Heidelberg: Physica-Verlag, 123–51. Gordon, P. H. (1995) France, Germany, and the Western Alliance. Boulder, CO: Westview Press. Grabbe, H., and Hughes, K. (1998) Enlarging the EU Eastwards. London: Pinter. Haggard, S., Levy, M. A., Moravcsik, A., and Nicolaïdis, K. (1993) ‘Integrating the Two Halves of Europe: Theories of Interests, Bargaining, and Institutions’, in R. O. Keohane, J. S. Nye and S. Hoffmann (eds), After the Cold War: International Institutions and State Strategies in Europe, 1989–1991. Cambridge, MA: Harvard University Press, 173–95. King, G., Keohane, R. O., and Verba, S. (1994) Designing Social Inquiry: Scientific Inference in Qualitative Research. Princeton, NJ: Princeton University Press. Kramer, H. (1992) ‘The EC and the Stabilisation of Eastern Europe’, Aussenpolitik, 43: 12– 21. Kramer, H. (1993) ‘The European Community’s Response to Central and Eastern Europe’, Journal of Common Market Studies, 31: 213–44. Maresceau, M. (2001) ‘The EU Pre-Accession Strategies: A Political and Legal Analysis’, in M. Maresceau and E. Lannon (eds), The EU’s Enlargement and Mediterranean Strategies: A Comparative Analysis. New York: Palgrave, 3–28. Moravcsik, A. (1998) The Choice for Europe: Social Purpose and State Power from Messina to Maastricht. Ithaca, NY: Cornell University Press. Reinicke, W. H. (1992) Building a New Europe: The Challenge of System Transformation and Systemic Reform. Washington, DC: Brookings Institution.

Geopolitics and eastern enlargement 233 Robinson, A., and Wolf, M. (1991) ‘Europe’s Reluctant Empire Builders’, Financial Times, 2 December: 15. Schimmelfennig, F. (2001) ‘Liberal Identity and Postnationalist Inclusion: The Eastern Enlargement of the European Union’, in L.-E. Cederman (ed.), Constructing Europe’s Identity: The External Dimension. Boulder, CO: Lynne Rienner, 165–86. Schimmelfennig, F. (2003) The EU, NATO and the Integration of Europe: Rules and Rhetoric. Cambridge: Cambridge University Press. Schimmelfennig, F., and Sedelmeier, U. (2002) ‘Theorizing EU Enlargement: Research Focus, Hypotheses, and the State of Research’, Journal of European Public Policy, 9: 500–28. Sedelmeier, U. (1994) ‘The European Union’s Association Policy towards Central Eastern Europe: Political and Economic Rationales in Conflict’, Sussex European Institute Working Paper, no. 7. Sedelmeier, U., and Wallace, H. (1996) ‘Policies towards Central and Eastern Europe’, in H. Wallace and W. Wallace (eds), Policy-Making in the European Union. Oxford: Oxford University Press, 355–87. de la Serre, F., and Lequesne, C. (1993) ‘France and the European Union’, in A. W. Cafruny and G. G. Rosenthal (eds), The State of the European Community: The Maastricht Debates and Beyond. Boulder, CO: Lynne Rienner, 145–57. Smith, A., and Wallace, H. (1994) ‘The European Union: Towards a Policy for Europe’, International Affairs, 70: 429–44. Smith, K. E. (1999) The Making of EU Foreign Policy: The Case of Eastern Europe, New York: St Martin’s Press. Smith, M. A., and Timmins, G. (2000) Building a Bigger Europe: EU and NATO Enlargement in Comparative Perspective. Aldershot: Ashgate. Stark, H. (1992) ‘Frankreich und der Osten Europas’, in Frankreich-Jahrbuch 1992. Opladen: Verlag Leske und Budrich, 115–26. Strasbourg, S. H. (1997) ‘EC Holds Hand out as States Make Grade’, The Independent, 17 July: 14. Sutton, M. (1993) ‘France and the Maastricht Design’, The World Today, 49: 4–8. Sutton, M. (1994) ‘France and the European Union’s Enlargement Eastwards’, The World Today, 50: 153–6. Tiersky, R. (1992) ‘France in the New Europe’, Foreign Affairs, 71: 131–46. Torreblanca, J. I. (2001) The Reuniting of Europe: Promises, Negotiations and Compromises. Aldershot: Ashgate. Vernet, D. (1992) ‘The Dilemma of French Foreign Policy’, International Affairs, 68: 655–64.

Part IV

The substantive politics of enlargement

11 Sectoral dynamics of EU enlargement Advocacy, access and alliances in a composite policy1 Ulrich Sedelmeier

Introduction Over recent years, our conceptual understanding of EU enlargement has improved considerably. In particular the literature on eastern enlargement began in the late 1990s to address some crucial theoretical questions (Fierke and Wiener ch. 5 this volume; Friis 1998; Friis and Murphy 1999; Schimmelfennig ch. 7 this volume; Sedelmeier 1998, ch. 6 this volume). However, while there have been considerable advances with regard to what could be considered the macro-level of enlargement, this is not matched at the meso-level. Much of the theoretical debate concerning eastern enlargement has focused on the ‘macro-dimension’ of enlargement – the broader dynamics that underpin the EU’s enlargement policy and specifically its decision to enlarge. By contrast, the ‘meso-dimension’ – substantive policy outcomes in distinctive sectoral policy areas that are part of enlargement – has received very little attention. However, this dimension is no less central to EU enlargement. A key question relating to these substantive policy outcomes is which factors facilitate or obstruct an accommodation of the applicants’ preferences in sectoral policies – such as trade liberalization during the association period; regulatory alignment as part of the EU’s accession (and preaccession) conditionality, or the provisions of accession treaties. Previous enlargement episodes suggest that a lack of flexibility by the EU can cause severe problems for the candidates and lead to disgruntled new members. In particular, with reference to prospective members, an inability to accommodate their differences to a certain degree might jeopardize the sustainability of a broader European integration project. However, why the EU enlarges does not necessarily tell us much about these sectoral dynamics of enlargement. With regard specifically to eastern enlargement, the EU’s general endorsement is often at odds with substantive sectoral policy. Thus, the factors that have facilitated an accommodation of the Central and Eastern European countries’ (CEECs’) demand for membership have not led directly to an accommodation of their preferences in substantive policy. Some theoretical studies of the macro-level acknowledge the discrepancy between the general dynamics that lead to enlargement and restrictive policy

238 Ulrich Sedelmeier practice on the substantive detail (Schimmelfennig ch. 7 this volume). Other theoretically informed studies have attempted to problematize this discrepancy more explicitly (Friis 1997; Niblett 1995; Torreblanca 1997; Sedelmeier 1994). However, we still miss a conceptual framework that identifies in a more structured way the factors that determine the likelihood of an accommodation of the applicants’ preferences in substantive sectoral policies, or, in other words, which factors mediate between the broader dynamics of enlargement and specific sectoral outcomes. A key factor that might determine the likelihood of accommodation of the candidates’ preferences is the strength of sectoral interest groups that oppose such an accommodation. Given the unequal bargaining power between the EU and the applicants, liberal intergovernmentalist approaches (e.g., Moravcsik 1993) would suggest that the strength of domestic interest groups whose preferences diverge from those of the CEECs are the key variable constraining an accommodation of the CEECs’ preferences. Indeed, these assumptions underpin – at least implicitly – many of the early analyses of EU policy towards the CEECs that focus explicitly on substantive policy issues, mainly the extent of trade liberalization under the Europe Agreements (EAs). These include contributions from trade economists (see, e.g., Hindley 1993; Messerlin 1993; Rollo and Smith 1993; Baldwin 1994), as well as more theoretically informed studies (Haggard et al. 1993; Nicolaïdis 1993; Guggenbuhl 1995). Put simply, these analyses suggest that, while political considerations and concerns about aggregate welfare gains might incline policymakers to accommodate the CEECs’ preferences, this is undermined by vested economic interests in particular sectors. While these studies show convincingly that the pressure of domestic groups is an important factor, such pluralist and materialist approaches have limits. The strength of domestic groups alone is not always a reliable indicator for the extent to which EU policy accommodates the preferences of the CEECs. In the steel sector, for example, strong interest group opposition did not prevent an accommodation. The EU liberalized trade considerably, despite strong countervailing pressures from EU producers (see section 3 below). This is not the only example in which the EU shifted towards a more accommodating policy despite opposition from domestic groups (see, e.g., Sedelmeier and Wallace 1996: 370–80). Thus, the existence of strong domestic veto groups alone does not always prevent an accommodation of the applicants’ preferences. This chapter draws on evidence from EU policy towards the CEECs in order to develop a conceptual framework that specifies the conditions under which the EU is likely to accommodate the applicants’ preferences in sectoral policies. I argue that in order to understand these sectoral dynamics of enlargement we need to consider not only the strength of societal interest groups, but two further factors, namely the structure of the policy process and sectoral policy paradigms. This argument is based on the following assumptions. First, given the asymmetrical bargaining power between the EU and the applicants, an accommodation of the preferences of the latter depends largely on policy advocates inside the EU. Second, the impact of these policy advocates is significantly affected by the

Sectoral dynamics of EU enlargement 239 nature of enlargement as a ‘composite policy’, i.e., a policy that consists of a ‘macro’-policy and many sectoral ‘meso’-policies and in which distinctive groups of policy-makers have primary responsibility for the macro-policy and the various meso-policies. The impact of such policy advocates then depends (1) on their access to decisions on sectoral policies, and (2) on their ability to form ‘winning’ alliances with sectoral policy-makers. The access of the policy advocates to decision-making depends significantly on the structure of the policy process. As in the case of eastern enlargement the policy advocates are among the macro policy makers, their access is greatest the more centrally coordinated or hierarchical decision-making is. Conversely, the more fragmented the policy process, the more limited is their policy impact and hence the likelihood of an accommodation of the CEECs’ preferences. While the structure of the policy process is a more formal constraint (or resource), materialist approaches do not easily capture a key factor that shapes alliance-building. The preferences of sectoral policy-makers are not simply a reflection of the interests of the strongest societal groups in particular sectors. Rather, they are crucially influenced by particular policy paradigms, i.e., the sets of ideas that respectively underpin policy in specific areas. These policy paradigms hence significantly shape the ability of policy advocates to forge alliances with sectoral policy-makers in favour of an accommodation of the CEECs’ interests. A mismatch between sectoral policy paradigms and the preferences of the CEECs is a key obstacle to successful alliance-building. Conversely, compatibility between paradigms and the applicants’ preferences increases the likelihood of an accommodation of the latter. The chapter proceeds as follows. Section 2 sketches the analytical framework. Its first subsection conceptualizes enlargement as a ‘composite policy’, in which an accommodation of the candidates’ preferences depends largely on the influence of a group of policy advocates. The other two subsections elaborate respectively on the two factors that shape their influence and their ability to counterbalance interest group pressure – the structure of the policy process and sectoral policy paradigms. Section 3 presents evidence from two meso-policy areas in the EU’s eastern enlargement. These policy areas should be ‘hard cases’ for an explanation focusing on interest groups, as in both cases sectoral interest groups were unified in strong opposition to accommodating the CEECs’ preferences. Yet in both cases the EU significantly accommodated the CEECs’ preferences. The case of steel trade liberalization within the association policy illustrates that an emerging alternative policy paradigm enabled alliance-building that led to a significant degree of accommodation, despite strong countervailing interest group pressure and a fragmented policy process. The EU’s requirements for regulatory alignment during the preaccession stage presents a more mixed picture. I argue that variations in the degree of accommodation between social policy and environmental policy can be related to the role of the EU’s internal market paradigm. Section 4 draws the insights from the more inductive case studies together in order to sketch a framework that might be more generalizable for deductive research.

240 Ulrich Sedelmeier

Policy advocacy, access and alliances in a composite policy Policy advocacy in a composite policy Given the asymmetrical bargaining power between the EU and the candidates, the likelihood of an accommodation of the candidates’ preferences depends to a large extent on the advocacy of these preferences by policy-makers inside the EU. In the case of eastern enlargement, such a group of policy advocates emerged around the Commission’s unit for policy towards the CEECs and the cabinets of subsequent external relations Commissioners, Frans Andriessen and Leon Brittan (see, e.g., Sedelmeier and Wallace 1996, 2000). The motivations behind their advocacy are analysed elsewhere.2 Key for the analysis here is that the impact of these policy advocates is crucially shaped by the particular nature of the EU’s enlargement policy. A key characteristic of EU policy towards the CEECs and enlargement more generally is that it is a ‘composite policy’ (Sedelmeier 1998; Sedelmeier and Wallace 2000). It is a broad policy framework, or a ‘macro-policy’, which is constituted by a range of sectoral ‘meso-policies’ In other words, the EU’s enlargement policy draws its substance from distinctive decisions across the range of policy areas which are part of the association policy or accession negotiations. This characteristic requires an analytical distinction between two dimensions of policy: (1) decisions about the macro-level of policy, to determine the overall objectives and parameters; and (2) decisions about the specific detail and substance of policy in particular sectors. Furthermore, the nature of a composite policy implies that different groups of policy-makers, or distinctive policy communities, have primary responsibility for specific parts of this policy. If macro- and meso-policy-makers from each member state simply advance previously agreed national positions in interstate bargaining, the distinction between them would be a merely formal one. However, the intraEU debate about substantive policy is often characterized not so much by national cleavages as by functional cleavages that relate to policy-makers’ bureaucratic position in their administration. This is not to suggest that different member states’ attitudes to enlargement do not vary and that these national differences are insignificant for sectoral policies. However, the policy process is frequently characterized by a transgovernmental cleavage of cross-cutting coalitions that pitches foreign policy-makers collectively against sectoral policy-makers from across the member states (see also Niblett 1995; Torreblanca 1997). This notion of a composite policy in which the sectoral dynamics of enlargement are shaped by the interactions between distinctive policy communities has affinities with a characterization of EU policy towards the CEECs as ‘overlapping games’ (Torreblanca 1998). There are also parallels with an analytical framework that emphasizes that different types of decisions are dealt with respectively by different groups of policy-makers, each guided by distinctive policy rationales (Peterson 1995; Peterson and Bomberg 1999). In the case of (eastern) enlargement, the group of policy-makers which has primary responsibility for policy towards the CEECs includes officials from the

Sectoral dynamics of EU enlargement 241 member states’ foreign ministries and the Commission’s DG for external relations (now DG Enlargement), as well as periodically the heads of state and government or the Commission president. These macro-policy-makers might be generally more inclined to accommodate the preferences of the CEECs. Again, for the purpose of the analysis, we can bracket the reasons for this bias: rationalists would emphasize that they are more likely to define enlargement in terms of longer-term political and security concerns and aggregate welfare gains, constructivists would point out that they are also more likely to be receptive to community norms that prescribe certain standards of ‘appropriate behaviour’ towards the applicants. However, for the policy advocates to have an impact, it is insufficient to influence the macro-policy-makers. The latter cannot take decisions on policy substance within the various meso-areas autonomously. Such decisions have to be negotiated, in a process of horizontal coordination, with those sectoral policy-makers who have primary responsibility for the respective meso-policies. These mesopolicy-makers are, however, less predisposed towards changes that would be necessary to accommodate the preferences of the CEECs. There is an institutional bias towards the status quo and policy change is likely to involve administrative costs and costs to sectoral interest groups. Thus, given the particular characteristics of a composite policy, the impact of the policy advocates depends (1) on their access to policy-making and decision-making on specific issues, as well as (2) on their ability to form alliances with sectoral policymakers that are sufficiently strong to overcome countervailing interest group pressure.3 The following two sections elaborate on the factors that affect respectively access and alliance-building, namely the structure of the policy process and the policy paradigms that underpin EU policy in particular sectors. Access in a composite policy: the structure of the policy process In the case of EU policy towards the CEECs, the policy advocates that promote an accommodation of the CEECs’ preferences in intra-EU debate are among the macro-policy-makers. Their access to sectoral policy decisions is therefore strongly correlated with the structure of the policy process and the degree to which it involves macro- and meso-policy-makers respectively. The literature on intragovernmental policy coordination (see, e.g., Scharpf 1993) and on ‘veto points’ in the policy process (Thelen and Steinmo 1992: 7) is particularly relevant if we want to understand how the structure of the process shapes the access of particular actors to policy decisions. We can broadly distinguish between different structures of the policy process according to their degree of fragmentation or centralization, as well as between two different types of centralized policy processes – hierarchical and centrally coordinated. The more centralized the policy-making process, the greater the influence of the macro-policy-makers and of the policy advocates among them. Hierarchical decision-making either explicitly subordinates the concerns of the meso-policymakers, or implicitly circumvents them. By reducing the access of the mesopolicy-makers to decision-making, the outcomes of such a process are more likely

242 Ulrich Sedelmeier to reflect the concerns and priorities of the macro-policy-makers. Of course the flip-side is that such decisions might insufficiently appreciate the problems that they might create for coherent policy in the meso-areas.4 Decisions that are imposed on a particular sector are therefore likely to remain contested and their sustainability might be doubtful. A centrally coordinated policy process usually takes the form of multilateral consultations between macro policy makers and various groups of sectoral policymakers. The ideal type is a form of ‘positive coordination’ (Scharpf 1993). This might take the form of special task forces or working groups. A key characteristic is that, while sectoral policy-makers would have to agree to policy change, none of them would unilaterally oppose changes in their particular policy area. The inherent pressure on all participants to compromise makes an accommodation of the candidates’ preferences likely. While such accommodation might be more limited than under hierarchical decision-making, it is more likely to be sustainable. At the other end of the spectrum, the more fragmented the policy process, the more likely the preferences of the meso-policy-makers will be reflected in the outcomes in the meso-policy areas. The influence of the meso-policy-makers is greatest if fragmentation means that they can decide policy autonomously, or if the meso-policy-makers have the power to veto changes in their policy area. In this case, there is a strong bias against an accommodation of the applicants’ preferences. In general, it is difficult to identify clearly one structure of the policy process for a given policy area. The structure of the policy process might vary within the same policy area over time, according to the stage of policy-making. Furthermore, precisely because of its importance for granting access, the structure of the policy process itself is subject to political strategies and manipulation by the political actors involved. The development of the EU’s policy towards the CEECs reflects the relevance of the structure of the process in mediating the impact of the policy advocates on substantive sectoral policy outcomes.5 One general feature of the evolving policy was the fragmentation of the policy process. It resulted from the lack of continuous oversight by the foreign ministers in the Council (Sedelmeier and Wallace 1996) and the disengagement of the European Political Cooperation (EPC) framework from the association policy in early 1990 (Nuttall 1992). This greatly weakened the scope for more centralized policy coordination. The policy process largely took the form of bilateral consultations between macro-policy-makers and individual groups of sectoral policy-makers, in which the latter had sufficient autonomy to block concessions in their respective areas. Neither the Council nor the Commission established multilateral consultation networks or task forces for the association policy which might have led to ‘positive coordination’ and agreement on collective burden-sharing across sectors and issues. These constraints were apparent in the process of establishing the Commission’s negotiating directives for the EAs. DG I’s original framework had been fairly accommodating of the CEECs’ preferences. The final negotiating directives turned out to be much more restrictive after the details had been filled in by

Sectoral dynamics of EU enlargement 243 sectoral DGs in the Commission and agreed with sectoral policy-makers in the Council. Likewise, the scope for the CEECs to press for a more far-reaching accommodation of their preferences during the EA negotiations was limited: the negotiations were characterized by a high degree of fragmentation and a hands-off approach by the foreign ministers in the General Affairs Council. Fragmentation of the policy process became most pronounced during the implementation of the EAs. For example, this fragmentation during the implementation phase made it very hard to prevent sectoral interest groups from using trade defence instruments to cancel out some of the concessions that the CEECs had obtained. However, there were also instances in which policy became insulated at the level of the macro-policy-makers, which facilitated an accommodation of the CEECs’ preferences. Such instances of more centralized coordination were apparent during the negotiations of the EAs during 1991. The context of the negotiations allowed the Commission negotiators on a number of occasions to force the General Affairs Council, rather than the Council’s sectoral working groups, to become more directly involved in deciding hierarchically on revisions to the negotiations directives. This strategy also worked in some less publicized instances of circumventing opposition from sectoral policy-makers (see also, e.g., Torreblanca 1998). Similarly, in the lead-up to the Copenhagen European Council in June 1993, the endorsement of the CEECs’ membership perspective was decided by the foreign ministers in the Council, acting in considerable autonomy from sectoral policymakers. The package of trade concessions announced at the European Council was agreed by a high-level group of foreign ministry officials. In the negotiations of the pre-accession strategy, presented at the Essen European Council in December 1994, the German presidency, in close cooperation with the Commission, considerably restricted the access of sectoral policy-makers to the policy process. Discussions were kept at the level of the Permanent Representatives (COREPER), and the final decision was even taken in a ‘COREPER restreint’. More generally, the fact that the story of the association policy is so closely linked to decisions announced at specific European Council meetings also reflects a deliberate strategy by the Commission to use the anticipation of the political bias at the European Council to focus attention in the Council. In sum, a focus on the structure of the policy process suggests that the existence of ‘veto groups’ might not directly or necessarily translate into restrictive policy outcomes. This overview suggests that, while interest group pressure was an important factor that significantly restricted an accommodation of the CEECs’ preferences, there is a strong correlation between the effectiveness of this constraint and the structure of the policy process. The prevalent fragmentation of the association policy helped interest groups to oppose accommodation, while those instances in which policy was more centrally coordinated facilitated accommodation. Still, access to policy-making does not equal influence on policy outcomes. In order to wield influence, the policy advocates need to be able to build sufficiently strong alliances among the sectoral policy-makers involved in this decision. The

244 Ulrich Sedelmeier following section elaborates on the argument that policy paradigms are an important factor affecting the likelihood of successful alliance-building within a particular policy area. Alliance-building in a composite policy: the role of policy paradigms Predictions about the policy advocates’ ability to form winning alliances with sectoral policy-makers depend crucially on our assumptions about the nature of the preferences of the latter. In contrast to pluralist approaches in comparative politics, or a liberal intergovernmentalist approach to the EU, this chapter argues that public policy-makers do not simply act according to the interests of the strongest societal groups. Rather, they have preferences of their own which they might pursue even against societal pressure (see also, e.g., Evans et al. 1985). These preferences are to an important degree shaped by ‘policy paradigms’ (Hall 1993). Policy paradigms are an interpretative framework, based on a coherent set of ideas that underpin policy-makers’ understanding of policy in their respective areas of responsibility: policymakers customarily work within a framework of ideas and standards that specifies not only the goals of policy and the kind of instruments that can be used to attain them, but also the very nature of the problems that need to be addressed. Like a Gestalt, this framework is embedded in the very terminology through which policymakers communicate about their work, and it is influential precisely because so much of it is taken for granted and unamenable to scrutiny as a whole. . . . Policy paradigms can best be seen as one feature of the overall terms of political discourse. They suggest that the policymaking process can be structured by a particular set of ideas, just as it can be structured by a set of institutions. (Hall 1993: 279, 290) Policy paradigms are specific to particular policy areas, as a distinctive feature within the normative institutional structure of these areas. Policy paradigms are not simply causal ideas about means–ends relations for an effective policy. They also incorporate principled ideas about what constitutes a legitimate policy, for example, with regard to goals or appropriate tools, or about priorities between different groups that the policy affects. Paradigms become embedded by acquiring a dominant position in the discourse that characterizes a policy area. This view of the role of policy paradigms has strong affinities with the concept of ‘policy frames’ (Rein and Schön 1991) which has recently found wider application in analyses of EU policy-making (see Jachtenfuchs 1996; Lenschow and Zito 1998; Dudley and Richardson 1999). There are also certain parallels with an analysis of individual EU policy areas as distinctive ‘governance regimes’ (Armstrong and Bulmer 1998). In this chapter, I use the term policy paradigm for the set of ideas that underpins policy in a particular meso-policy area. Policy paradigms shape the preference formation of sectoral policy-makers, albeit not exclusively, but independently from the material structure of the interests in this sector.

Sectoral dynamics of EU enlargement 245 The ability of policy advocates to build successful alliances in the meso-policy areas is thus not simply a function of the configuration of societal interest. The degree of compatibility between the preferences that they promote and sectoral policy paradigms is a key factor shaping alliance-building. A mismatch between the applicants’ preferences and sectoral paradigms might lead sectoral policy-makers to oppose an accommodation of these preferences, even independently of interest group pressure. Conversely, compatibility facilitates accommodation. Such compatibility increases the likelihood that the policy advocates might forge a strategic alliance among sectoral policy-makers that is sufficiently strong to bring about a policy change, even against countervailing interest group pressure. However, the very concept of policy paradigms would lead us to expect that such cases of compatibility are rare. An accommodation of the applicants’ preferences would usually require a change in the status quo of a sector, since accommodation is otherwise highly unlikely to provoke opposition from sectoral interests. Yet the institutional bias in favour of the status quo is precisely so strong because it is usually underpinned by policy paradigms. In addition to interest group pressure, policy paradigms are therefore most likely to form significant obstacles to an accommodation of the applicants’ preferences. The most likely cases where paradigms favour accommodation despite strong opposition from interest groups, are thus cases in which paradigms shift. By definition, we would expect such cases to be rare. The notion of policy paradigms is based precisely on the assumptions of a high degree of stability and taken-forgrantedness of the underlying ideas. However, policy failure and changing circumstances might discredit the ideas which underlie a policy paradigm and the paradigm itself. In this case accommodation might be achieved if such a policy change is compatible with alternative policy paradigms that challenge and successfully replace the dominant paradigm. An important question is therefore whether the policy advocates can form a strategic alliance with sectoral policy-makers who promote an alternative policy paradigm that is more compatible with their preferences. I argue that this is precisely what happened in the case of trade liberalization in the steel sector. A special case of paradigm compatibility, which is, however, particularly relevant for enlargement, is the question of a temporary accommodation of the applicants’ preferences. Applicants might ask for such temporary accommodation during the pre-accession period or in post-accession transition periods. Such accommodation might be possible if at least it is not considered a challenge to dominant sectoral policy paradigm. I argue that this was the case with certain aspects of the internal market. Methodologically, policy paradigms can be identified within the discourse of a particular meso-policy. Public statements and documents in which policy-makers justify their action with reference to certain problem definitions or normative ideas reflect such policy paradigms. Sometimes these might be more implicit. The identification of policy paradigms requires an inductive analysis of the history of development in a particular meso-policy. This analysis has to reveal whether the emergence of a particular policy regime is indeed based on coherent sets of ideas

246 Ulrich Sedelmeier Table 11.1 Influence of policy advocates on sectoral policies in a composite policy Policy process

Policy paradigms

Compatible Incompatible

Fragmented

Centralized

+/– (i) – – (iii)

+ + (ii) –/+ (iv)

about cause–effect relations and legitimacy claims. An assessment of the political impact of policy paradigms requires an analysis of how consensual or contested these understandings are, and to what extent they are challenged by alternative ideas. A key methodological implication is thus that it is difficult to make predictions about the way in which policy paradigms affect a political process prior to the analysis. Table 11.1 summarizes the initial propositions about how the factors that affect the policy advocates’ access and alliance-building structure the influence that they can bring to bear on sectoral policies. If an accommodation of the candidates’ preferences is opposed by sectoral interest groups, their advocacy is unlikely to be successful, unless the conditions for both access and alliance-building are favourable, i.e., the policy process is centrally coordinated and policy paradigms are compatible with the candidates preferences (box ii). If policy paradigms are incompatible, then a centralized policy process might facilitate temporary accommodation, which is, however, unlikely to be sustainable in the longer term (box iv). Even if sectoral policy paradigms are compatible with the candidates’ preferences, advocacy is likely to remain unsuccessful, as long as the policy process remains fragmented (box i), but as soon as access is achieved, a sustainable accommodation is possible. The following section draws on empirical evidence of two episodes of the eastern enlargement policy in which the CEECs’ preferences were accommodated despite interest group opposition, in order to explore the effect of the interplay between policy paradigms, policy process and interest group opposition on the likelihood of accommodation.

Empirical evidence from association and pre-accession policies towards the CEECs Trade liberalization in the steel sector The case of trade liberalization towards the CEECs in the steel sector illustrates how the emergence of an alternative policy paradigm which is more compatible with the preferences of the CEECs facilitated accommodation, despite opposition from interest groups.6 The ability of the policy advocates to form a strategic alliance with those sectoral policy-makers who favoured a change in steel policy more generally played an important role in overcoming sectoral opposition to an accommodation of the CEECs’ preferences.

Sectoral dynamics of EU enlargement 247 The EU’s steel sector is considered one of its most import-sensitive sectors and has traditionally enjoyed a high degree of protection. Before the negotiations of the EAs, steel trade was regulated by a highly restrictive regime of Voluntary Restraint Agreements (VRAs) that imposed both quantitative and price restrictions on CEEC exports (Wang and Winters 1993). In addition, EU producers in the steel sector were particularly strongly opposed to liberalizing trade with the CEECs and there was no countervailing pressure from consuming industries on the EU side. This status quo and the balance of interest group pressure makes the steel sector a ‘hard case’ for which interest group-based explanations would suggest that a policy change in favour of greater market access for the CEECs was highly unlikely. However, the EU accommodated the CEECs’ preferences for free and unconditional access to the EU market to a considerable extent (see also Rollo and Smith 1993). The EAs ended the VRAs and immediately eliminated all quantitative restrictions. Tariffs (which in any case did not constitute a major trade barrier) were phased out. Moreover, the centralization of the policy process in the framework of the EA negotiations enabled the policy advocates to prevent the insertion of provisions that would have maintained the possibility of reintroducing VRAs. Crucially, they also thwarted subsequent attempts to undermine some of the benefits granted to the CEECs. The fragmentation of the policy process in the implementation phase meant that on a few occasions EU producers were able to use trade defence instruments against CEEC companies. However, the policy advocates successfully resisted interest group pressure for the wholesale reintroduction of a restrictive regime as part of the 1993–4 EU plan for the restructuring of the steel industry. While this outcome appears to contradict interest-based expectations, a focus on the changes in the structure of the policy process – the temporary shifts from a predominantly fragmented process to greater central coordination – partly explains the accommodation of the CEECs’ preferences. Crucially, however, the role of the policy paradigm underpinning EU steel policy provides a plausible explanation for the sustainability of accommodation. The policy paradigm which dominated EU steel policy from the inception of the European Coal and Steel Community (ECSC) could be described as a ‘managed restructuring paradigm’. This paradigm is based on the assumption that the specific production and market structure of the steel industry (see, e.g., Glais 1995) makes the nature of competition in this market crucially different from other sectors (see, e.g., Mény and Wright 1986). During periods of depression, the free play of market forces would thus not induce firms to undertake the necessary adjustment measures. It would merely lead to cut-throat competition, in which not necessarily the most economically viable firms would survive. Firms would only restructure and cut over-capacity if this was organized as a collective effort, under the guidance of public policy-makers, and in a stable external environment – i.e., without the disruption of cheap imports. The CEECs’ preferences for the liberalization of market access were thus incompatible with this dominant sectoral policy paradigm. However, in the early 1990s, an alternative policy paradigm, which I call the

248 Ulrich Sedelmeier ‘non-intervention paradigm’, started to emerge (see also Dudley and Richardson 1999). Different factors opened a window of opportunity for a paradigm change. Technological developments, such as the emergence of mini-mills, made it easier for producers to adjust to shifting demand patterns. Changes in the market structure, such as an accelerating trend towards mergers and privatization in the European steel industry, facilitated rationalization and increased competitiveness. Finally, the anticipation of the expiration of the ECSC treaty in 2002 gave rise to a debate as to whether the EU should continue to consider the steel sector as a special case. The ‘non-intervention’ paradigm precisely rejects the idea of the steel sector as a special case. In contrast to the dominant paradigm, it regards external competition as a positive contributing factor to restructuring. This paradigm focuses no longer on the protection of the EU market, but on the need for open markets abroad. It is thus much more compatible with the CEECs’ preferences. However, while EU producers increasingly supported a less regulated international steel trade regime, they were united in strong opposition to greater market access for the CEECs. The ascendancy of the non-intervention paradigm enabled the policy advocates to find support for trade liberalization among some policy-makers in the steel sector. Although this alternative paradigm emerged largely independently from eastern enlargement, the interaction between the policy advocates and supporters of the non-intervention paradigm for EU steel policy played an important role. The sectoral policy-makers who supported the non-intervention paradigm provided arguments and a supportive alliance for the policy advocates’ push for greater CEEC access to the EU steel market. This alliance was sufficiently strong to bring about, and sustain, a significant liberalization of the EU steel market for CEEC exporters, despite the strong opposition from EU steel producers. Conditionality for the regulatory alignment of the CEECs with the internal market The EU’s policy for the regulatory alignment of the CEECs with the internal market illustrates a different way in which sectoral policy paradigms affected the accommodation of the CEECs’ preferences. The general orientation of the Commission’s White Paper on which the EU’s regulatory alignment policy is based, accommodated the CEECs’ preference for selective alignment with product regulations during the pre-accession period. However, while this was particularly the case for environmental policy, this is in contrast to the area of social policy. The process of regulatory alignment is similar to that of regulatory harmonization to remove non-tariff barriers (NTBs) in the single market programme and to the EEA regime which extended the internal market to most of the EFTA countries. Regulatory alignment of the CEECs is based on a Commission White Paper (WP) (Commission 1995) that the Cannes European Council endorsed in June 1995. The WP has the status of non-binding recommendations for the CEECs, while final, legally binding decisions are only taken in actual accession negotiations.7

Sectoral dynamics of EU enlargement 249 Essentially, the CEECs prefer selective regulatory alignment, which would give them greater flexibility to set their own priorities (see Smith et al. 1996; McGowan and Wallace 1996; Young and Wallace 2000). Such flexibility would allow them to opt for early adjustment in areas where they consider it beneficial for their economic restructuring or to prepare their companies for internationalization. Conversely, selective alignment would enable the CEECs to delay alignment in those areas where this involves high costs (either public spending or for private companies) and where the only rationale for doing so is directly related to EU accession. Especially if in such areas EU regulations do not concern product standards but the production process, they might want to implement alignment only during post-accession transition periods. While product standards might constitute NTBs that would undermine the functioning of the internal market, process regulations affect only production costs. Such process regulations that impose considerable costs on CEEC firms, as well as, to some extent, governments, concern primarily measures in the area of EU social policy, such as health and safety at the workplace, and certain elements of EU environmental policy, such as pollution from stationary sources. However, EU producers strongly opposed the CEECs’ preference for selective alignment (UNICE 1997; see also Chiris 1998). Rather, they argued that the EU should demand from CEEC companies strict and early compliance with EU process regulations. Early alignment would reduce competitive advantages that the latter might have from producing according to less stringent regulations. The balance of interest group pressure would therefore suggest that an accommodation of the CEECs’ preferences would be highly unlikely. Furthermore, two central elements of the policy paradigm underpinning the EU’s internal market militated against selective alignment. The first is a distinctive understanding of the nature of economic competition. It is based on a ‘level playingfield’ argument, which suggests that the purpose of internal market regulations is not only to remove NTBs in order to guarantee the free circulation of products. Single market legislation also has to ensure ‘fair’ competition, which requires a harmonization of regulations that concern the production process. This harmonization is necessary, as certain environmental standards, for example, affect firms’ production costs. The second element is the broad acceptance inside the EU that the internal market is not merely based on a rationale of competition and market integration, but that it also serves the protection of broader public policy objectives, notably high levels of social and environmental protection (Wallace and Young 1996). In sum, both these elements of the EU’s internal market paradigm constrain the extent to which EU policy-makers view the CEECs’ demands for selective alignment as feasible and legitimate. However, while these arguments dominate the EU’s discourse on the internal market, the assumptions on which the EU’s internal market paradigm is based are far from generally accepted among economists. The argument can be made that, while the harmonization of product standards is essential for the functioning of the internal market, the harmonization of process standards is not. The latter affect the production costs of firms, and thus indirectly affect competition in the internal

250 Ulrich Sedelmeier market. However, they do not constitute NTBs and therefore do not impede the free circulation of products. Furthermore, it can be argued that there is nothing ‘unfair’ about competition in the absence of harmonized environmental or social standards (see, for example, Smith et al. 1996). From such a perspective of the internal market, there would be no reasons to refuse the CEECs the possibility of selective alignment and for implementing process regulations in the course of long transition periods after accession, rather than at the pre-accession stage. This might grant CEEC firms a certain temporary competitive advantage, but it would not endanger the integrity of the internal market. Despite the fact that strong groups inside the EU, as well as the EU’s internal market paradigm, are opposed to selective alignment, the WP accommodates the CEECs’ preferences to a significant extent. The EU’s regulatory alignment policy was essentially driven by the policy advocates inside the Commission, which included officials from the CEEC unit in DG I and from the cabinet of Leon Brittan, the then external relations Commissioner (Sedelmeier 1998: 140–46). These policy-makers’ understanding of the specific situation in the CEECs led them to question the viability and desirability of early alignment according to the EU’s internal market paradigm. They successfully convinced the policy-makers of DG XV, responsible for the internal market and the drafting of the WP, to take a selective approach to the CEECs’ regulatory alignment. The agreement of DG XV to a more selective approach was on the one hand a pragmatic choice, as the sheer amount of process regulations in agriculture alone would have contradicted the purpose of the WP as a useful guide. On the other hand, however, the widespread acceptance of a narrower version of the internal market paradigm facilitated alliance-building with policy-makers of DG XV. The prevalent view in DG XV was that the core of the internal market consisted of the elimination of NTBs and the free circulation of products, which was compatible with a temporary accommodation of the CEECs’ preferences for selective alignment. The drafting of the WP was carried out in a process of central coordination between DG XV and sectoral DGs. In this process, the former was able to persuade most of the sectoral DGs to concentrate in their particular sections of the WP on product regulations and to exclude process regulations. This selective approach is most clearly reflected in the area of environmental policy, where such process regulations as the pollution from stationary sources are excluded from the WP. Of course, this accommodation of the preferences of the CEECs’ was facilitated by the fact that the WP did not mobilize much interest group pressure, in part because of its non-binding character, in part because of the speed at which it was drafted. Significantly, however, the outcomes of accession negotiations in the area of environmental policy appear to confirm that the EU is prepared to grant transition periods in areas where substantial adaptation of infrastructure is necessary and where substantial investments need to be spread over time. By contrast, however, the area of social policy constitutes an exception to the general rule. Officials from DG V insisted that the WP should include process regulations, such as health and safety at the workplace. Significantly, their oppo-

Sectoral dynamics of EU enlargement 251 sition to selective alignment was not the result of external pressures. Rather than defending the interests of particular interest groups inside the EU, these policymakers defended the dominant internal market paradigm that emphasizes a ‘level playing-field’ and high levels of social and environmental protection. Even a temporary accommodation was incompatible with their specific understanding of, and preference for, the operation of the EU’s internal market. In turn, the presentation of their arguments with reference to assumptions underpinning the broadly accepted internal market paradigm made it hard for DG XV to deny the legitimacy of their resistance to a more flexible approach. In sum, regulatory alignment with the internal market shows two contrasting examples of how policy paradigms structured the interactions of macro- and mesopolicy. The policy advocates’ argument that a temporary accommodation was compatible with a narrower view of the internal market allowed them to build an alliance with policy-makers in DG XV in favour of selective alignment. Environmental policy-makers did not oppose such a temporal accommodation, as they were assured that it did not challenge the dominant internal market paradigm. In the area of social policy, the defence of the dominant paradigm by public policymakers was the main obstacle to accommodating the preferences of the CEECs. This was the case even though, at least at that stage, there was no interest group pressure for doing so.

Interest group pressure, policy process, policy paradigms and the sectoral dynamics of enlargement Table 11.2 summarizes the propositions that emerge from the case studies about how the interplay between the structure of the policy process and sectoral policy paradigms affect the likelihood of an accommodation of the candidates’ preferences if such an accommodation is opposed by the dominant sectoral interest groups. It suggests that interest group opposition is an effective constraint on an accommodation of the applicants’ preferences only in those cases in which the policy process is fragmented and sectoral policy paradigms are incompatible with the applicants’ Table 11.2 Likelihood of an accommodation of applicant preferences in sectoral policies if strongly opposed by sectoral interest groups Policy process

Policy paradigms Compatible

Incompatible

Fragmented

Centralized

Accommodation possible, likely to be sustainable (e.g., steel)

Accommodation likely (e.g., general orientation of WP)

Accommodation unlikely

(Temporary) accommodation possible, but difficult to sustain (e.g., environment, social policy)

252 Ulrich Sedelmeier preferences. Sectoral policy paradigms are a key variable, concerning both the likelihood and the sustainability of accommodation. Incompatibility between sectoral paradigms and preferences is a key obstacle to accommodation, even in a centralized policy process. In such cases, centralization might still make accommodation possible, but only temporary accommodation. In the case of social policy, an incompatible policy paradigm constrained an accommodation even in the absence of sectoral opposition. By contrast, compatibility between paradigms and preferences can lead to accommodation despite interest group opposition. This was the case of the general orientation of the WP on regulatory alignment. Another example is the case of environmental policy in the EFTA enlargement negotiations, which allowed the new members to maintain higher standards of protection. Furthermore, compatible paradigms facilitate accommodation even in a predominantly fragmented policy process. The case of steel trade liberalization illustrates that fragmentation makes it difficult for the policy advocates to gain access to decision-making. However, once access has been achieved, the policy paradigm facilitates alliancebuilding, which makes accommodation possible and likely to be sustainable. However, as suggested earlier, cases in which paradigms are compatible with an accommodation of the applicants’ preferences and interest groups are opposed to their accommodation are likely to be rare (and, conversely, cases in which paradigms are incompatible and interest groups favour an accommodation of the applicants’ preferences). Such cases might be limited to periods of paradigm shifts, which makes it difficult systematically to test the relative importance of paradigm compatibility and interest group pressure. A key question to which the case studies draw attention is the likelihood of temporary accommodation (such as post-accession transition periods) when the candidates’ preferences are incompatible with sectoral policy paradigms. In this regard the contrast between temporary accommodation in the area of environmental policy and resistance to it in social policy is striking. This variation seems to present a puzzle, as in both cases there was no interest group pressure at this stage of the policy process, the policy process was centrally coordinated, and an accommodation of the candidates’ preferences is incompatible with the broader internal market paradigm that underpins both sectors. A tentative starting-point might be to investigate more closely the status of the sectoral paradigms. Arguably, while in the EU there is a strong acceptance of high levels of environmental protection, acceptance of a further expansion of social policy is much more problematic. In other words, while the respective sectoral policy paradigms are strongly consensual within both sectors, their external acceptance in the broader context of the EU differs. While the acceptance of environmental policy outside the sector is high, it is more contested in the case of social policy. In turn, external consensus might make a temporary accommodation of the CEECs’ preferences more easily acceptable for environmental policy-makers. By contrast, for social policy-makers, such temporary accommodation might be considered much more of a threat to their sectoral policy paradigm, which could explain the strong resistance to even a temporary accommodation. Table 11.3

Sectoral dynamics of EU enlargement 253 Table 11.3 Effect of the status of policy paradigms on the likelihood of accommodation Status of policy paradigms within the sector

External status of policy paradigms

Consensual

Contested

Consensual

Temporary accommodation possible through persuasion (e.g., environment)

(unlikely case?)

Contested

Even temporary accommodation unlikely (e.g., social policy)

Accommodation through strategic alliance-building possible [steel (1990–94)]

summarizes these propositions about how the status of policy paradigms that are incompatible with the CEECs’ preferences affects the likelihood of temporary accommodation. Drawing on the insights of the case studies, it also suggests how the status of these paradigms might structure the strategies of the policy advocates. In the case of environmental policy, the intra-sectoral consensus makes the building of strategic alliances difficult, while the external consensuality of the sectoral paradigm might make it possible for policy advocates to persuade sectoral policy-makers to agree to a temporary accommodation. In the case of social policy, even temporary accommodation is unlikely. Persuasion is difficult, as accommodation might threaten the sectoral paradigm, given the lack of external consensus. In cases where the policy paradigm is contested both within the sector and externally (again, typically the case in periods of paradigm shift, as in the case of EU steel policy in the first half of the 1990s), persuasion is unlikely to work, but there is scope for strategic alliance-building within the sector.

Conclusions This chapter has suggested that, although a number of recent studies have started to address the theoretical neglect of EU enlargement, these have focused mainly on the macro-level of enlargement, namely under which conditions the EU decides to enlarge. What is still missing are conceptualizations of the link between the broader dynamics and substantive sectoral policy outcomes which specifies conditions under which the preferences of the candidate countries are accommodated in EU policy. Liberal intergovernmentalism draws attention to one key variable that shapes the likelihood of an accommodation of the candidates’ preferences in individual sectoral policies: the strength of domestic interest groups. However, while interest group pressure is a key factor, as a single-variable explanation it is insufficient for eastern enlargement. I have suggested that an accommodation of the candidates’ preferences depends crucially on policy advocates in the EU. The influence of these policy advocates is structured by the nature of enlargement as a composite policy, in which sectoral decisions are negotiated between the group of policy-makers with primary

254 Ulrich Sedelmeier responsibility for enlargement as such and various groups of sectoral policymakers. The policy advocates’ impact on sectoral policies thus depends (1) on their access to decision-making, which is shaped by the structure of the policy process, as well as (2) their ability to build alliances with sectoral policy-makers. Crucially, alliancebuilding does not depend only on the strength of sectoral interest groups, but also on the compatibility between the candidates’ preferences and the policy paradigms that shape the preferences of the sectoral policy-makers. This chapter has illustrated three ways in which policy paradigms might mediate interest group pressure. In the case of steel trade liberalization, opposition from interest groups was overcome because the policy advocates were able to forge a strategic alliance with sectoral policy-makers who promoted an alternative paradigm. In the case of regulatory alignment with EU environmental policy during the pre-accession stage, the policy advocates were able to persuade the sectoral policy-makers to agree temporarily to a more flexible approach. They were able to argue that such an approach would not endanger the fundamental policy objectives of the single market, while challenging the suitability of certain aspects of the dominant paradigm in the particular context of the CEECs. Finally, in the case of regulatory alignment with EU social policy, the policy paradigm has been an obstacle to an accommodation of the CEECs preferences, despite the absence of interest group opposition. Policy paradigms appear as a central variable not only for the likelihood of accommodation, but also for its sustainability. Even in cases in which a centralized policy process is able to overcome interest group opposition against an accommodation of the candidates’ preferences, such accommodation is difficult to sustain if it is incompatible with underlying sectoral policy paradigms. Conversely, compatibility between preferences and sectoral paradigms facilitates accommodation, despite fragmentation and interest group opposition. However, these cases are rare. Maybe ironically, even in the case of steel, in which a paradigm shift enabled an accommodation of the CEECs’ preferences for unconditional market access to the EU during the association period, this shift towards a ‘non-intervention’ paradigm is likely to make it difficult to accommodate a managed restructuring of the CEECs’ steel industries after accession. The upshot is that, more often than not, policy paradigms appear to be a crucial obstacle to an accommodation of the candidates’ preferences. A key problem is that the ideas that underpin policy paradigms have evolved in a particular socioeconomic context and do not necessarily fit in different contexts. This means that it is not simply rent-seeking by vested interests or a lack of ‘positive’ coordination, but these different contexts, that make mutual adjustment between incumbents and candidates, and anything more than a temporary accommodation of the preferences of the latter, so difficult. Moreover, the taken-for-grantedness of policy paradigms makes it difficult to scrutinize the potential drawbacks of an export of the ideas that underpin them. And even in those sectors – and arguably particularly in those sectors – in which paradigms are contested in the EU, there is great resistance towards considering the viability of their underlying ideas in the context of the candidates.

Sectoral dynamics of EU enlargement 255 Therefore, an important direction for further theoretical and empirical research is to explore the conditions which might facilitate a temporary accommodation of candidates’ preferences that are incompatible with sectoral policy paradigms. As a starting-point, I have suggested that further investigation might focus on the interplay between different actor strategies (persuasion and strategic alliancebuilding) and differences in the status of sectoral policy paradigms (variations in the degree to which they are contested or consensual, both inside a particular sector and in the EU’s broader institutional context).

Notes 1 This chapter was originally published in Journal of European Public Policy, 9(4) (2002): 627–49. 2 For the purpose of the analysis here, we can largely bracket the source of their preferences – whether their advocacy was principled, based on a particularly strong identification with the EU’s identity towards the CEECs (Sedelmeier 1998, ch. 6 this volume), or whether, as rationalists would argue, they were motivated mainly by bureaucratic selfinterest (Schimmelfennig ch. 7 this volume). 3 For a certain parallel to the policy impact of transnational policy entrepreneurs in world politics, see, e.g., Risse-Kappen (1995). 4 For a more general discussion of hierarchical decision-making vs. autonomy of policy networks in the ‘governance’ literature, see, e.g., Jachtenfuchs (2001: 254–5). 5 The evidence in this section draws on Sedelmeier (1998: 43–77). 6 This section draws on Sedelmeier (1998: 86–119). 7 It should be noted, however, that there is some ambiguity in this respect with regard to the Accession Partnerships, which follow on from the WP (Grabbe 1999). In the Accession Partnerships, CEEC governments had to commit themselves to a timetable for the implementation of the WP, which in turn affected the EU’s decision to start accession negotiations with individual CEECs.

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12 Institutions, policy communities and EU enlargement British, Spanish and Central European accession negotiations in the agricultural sector Lorena Ruano

Introduction The last enlargement of the European Union (EU) to the Central and Eastern European countries (CEECs) is often talked about as different from previous ones. Hill (2000) has argued that the strategic and geopolitical implications of this enlargement dwarf those of previous accessions. Another important difference between this and previous enlargements of the EU is the sheer amount of legislation that the new members will have to adopt, since the acquis communautaire is larger and more complex than ever (Avery and Cameron 1998). Furthermore, the Copenhagen Council of 1993 set out a number of admission criteria, absent in previous accessions, which established a high threshold for the entry of new members (Mayhew 2000a). Without denying these particular characteristics, this chapter shows that there are significant similarities with past cases of enlargement, especially with the negotiations of Britain (1961–2 and 1969–73) and Spain (1978– 86) in the agricultural sector. A comparative analysis provides interesting insights into how EU policies change (or remain stable) to accommodate new members. It also demonstrates the usefulness of a historical institutionalist framework combined with a policy networks approach to study an international organization’s enlargement. The chapter develops this theoretically informed comparison in two parts. The first one provides a brief history of the Common Agricultural Policy (CAP) and summarizes the main problems that the British, Spanish and Central European accessions to the EU1 posed in this sector. In the three cases, the costs and benefits of enlargement were most visible in the policy area of agriculture, which has dominated the EU’s budget, thus requiring a reform of the CAP and its finances. Such reforms were always kept to a minimum due to the resistance of the EU’s agricultural policy community and to the path-dependent nature of change in this area, analysed in the second part. The second part explains how enlargement negotiations are ‘unpacked’ into different chapters corresponding to the various policy areas into which the EU is

Institutions, policy communities and enlargement 259 institutionally divided, and highlights a lack of coordination among them. Then, the institutions of the CAP are studied following North’s analysis of the role of rules, their hierarchy and linkages, and the way in which they have a ‘logic of their own’ that favours an incremental, path-dependent style of policy change (North 1990). The last section focuses on the ‘actors’, i.e., the organizations which operate within the CAP institutional framework. It analyses the degree of insulation of the decision-making process from other sectors, membership and exclusion from the policy network, resource dependencies, frequency of interactions and ideological consensus. These factors reinforce the institutional rigidities which resist and, to a large extent, condition change brought by the accession of new members to the EU.

The Common Agricultural Policy and EU enlargement to Britain, Spain and Central Europe Brief history of the CAP The CAP was developed during the early years of the EU, when memories of famine and rationing from World War II still prevailed. Two main instruments were designed to achieve the goals to increase production, raise farmers’ income levels and keep farmers on the land: these were price support and structural policy, with the second remaining marginalized for many years (see Hendricks 1999, and for the following section, Tracy 1989; Fennell 1997; Grant 1997). Price support operated through a complex system of protection at the border (the principle of Community preference) and payments from the EU budget which guaranteed stable prices well above the world market level. The system was popular with almost all farmers, who defended it over the years: the most productive and rich gained most, while the poorest and less productive were at least guaranteed a stable income. It worked fairly well until the early 1970s when the EU became self-sufficient and started accumulating surpluses, which had to be dumped into world markets at additional cost to the EU budget (export subsidies). In 1971, currency instability led to the creation of monetary compensatory amounts (MCAs) to maintain the unity of the EU’s agricultural markets, thus adding to the CAP’s expenses. The costs spiralled out of control and threatened to bankrupt the EU budget by 1979, making reforms unavoidable. The 1980s were marked by constant efforts to reform the CAP, following the steps of the 1960s Mansholt Plan which had unsuccessfully tried to move towards less price support and more structural policy. Yet the fierce resistance of farmers’ associations permitted only minor changes to the system of price support, which did not curb spending sufficiently. Instead, to cope with rising costs, the threshold of member states’ contributions to the budget was raised twice (in 1983 and in 1986). A part of the CAP was redefined through the adoption of the Integrated Mediterranean Programmes (IMPs), devised to cope with Spain’s accession, by linking agriculture to environmental issues and to the structural funds. Although apparently a marginal change, the IMPs planted the seeds of the more successful 1992 MacSharry reforms, which continued the shift towards ‘rural’ (rather than

260 Lorena Ruano merely ‘agricultural’) policy. Such linkage has been crucial to decouple subsidies from production levels and replace them with direct income payments associated to other economic activities, such as tourism or care for the environment. Despite their success, the MacSharry reforms were still not sufficient, and further reforms became necessary to finance the extension of the CAP to Central Europe at the end of the 1990s. The Commission’s ‘Agenda 2000’ proposed to deepen the 1992 MacSharry reforms but, once again, farmers’ associations resisted these changes. Although some cuts were achieved, they stayed very short of the Commission’s original proposals. In sum, although the CAP has been under reform almost since its creation, changes have been marginal and have never questioned the basic principles of the policy. The idea that rural populations need to be subsidized and kept on the land remained intact. Agriculture still dominates the EU budget: around half of the allocations go to the CAP, on top of structural measures that benefit rural populations. However, the accumulation of incremental small changes brought the CAP’s costs under control. In this long process, enlargement has always been a source of pressure for reform. The challenge of Britain’s accession: prices, Community preference and the budget Leaving aside President de Gaulle’s vetoes (1963 and 1967), agricultural issues were the most problematic feature of both rounds of negotiations between Britain and the EU (see Young 1973: x; de la Serre 1987: 37–40; Ludlow 1997). The EU-6, and the French in particular, were anxious that British entry might undo the still nascent CAP. Britain’s system of support, based on a low-cost food policy and a relatively liberal regime for overseas imports, was radically opposed to Community preference and its system of price support (Tracy 1989: 254–69, 330–42). The British government tried to circumvent the agricultural acquis because it implied, first, a sharp increase in food prices at a time when inflation was a threat and, second, the abandonment of its preferential trade with the Commonwealth. The third and major stumbling block surfaced during the second round of negotiations: Britain’s contribution to the budget, a result of the CAP’s financial mechanism which the EU-6 had agreed in April 1970. The way in which the EU collected its ‘own resources’ and spent them meant that Britain’s contributions would be larger than those of the other members once transitional periods expired. The ‘own resources’ consisted mainly of import levies on third countries’ agricultural products, and Britain was by far the largest importer of food in Europe. Given that almost all of the budget’s resources were devoted to funding the CAP, Britain would receive a relatively small part. Although British farmers would gain from it, they represented only a small fraction of the population (2 per cent). The agro-budgetary issue was contentious because its redistributive implications brought in notions of justice and equity. The French and the Commission argued that, in their calculations, the British were not taking into account the benefits of membership arising in other sectors, such as industry, trade and

Institutions, policy communities and enlargement 261 services, and rejected the notion of ‘juste retour’ (Commission 1967: §90–91). However, such gains were almost impossible to quantify, let alone predict, while contributions to the budget and CAP spending were much easier to identify and compare with those of other member states. There could have been three ways of reducing Britain’s burden: changing the CAP as envisaged by the Mansholt Plan (which did not happen), changing the funding of the CAP (which the Community had no intention of doing, having just agreed to it) and reducing agricultural support prices (which was impossible given German opposition) (Neville-Rolfe 1984: 87–100). The Commission’s 1967 Opinion on British entry had been clear on this point: ‘This policy is the result of long and difficult negotiations.. . . Any calling into question of the essential features of this policy upon the accession of new members is therefore ruled out’ (Commission 1967: §53). In the absence of CAP reforms, Britain had to take the acquis as it was and ‘swallow the lot’ (O’Neill 2000: 40). It received only a partial compensation after accession, by changing the pattern of EU spending, with the introduction of the Social and Regional Fund in 1975. Still, the issue resurfaced with Prime Minister Thatcher, who bitterly fought for the budget rebate, which she finally obtained in 1984. The British episode, like the subsequent Spanish and Central European, shows that it was easier to alter the rules of budgetary contributions and to add new headings of spending than to reform the principles of the CAP, especially guaranteed prices. The challenge of Spain’s accession: further surpluses, competition and finances Spain aspired to quick EU membership from 1977 as a way to support its transition to democracy and economic modernization, but it took seven years of negotiations, dominated by agricultural issues, before it joined in 1986. The delay came from the EU’s incapacity to present a common position on agriculture before February 1984, especially because Spain had knocked on their door at a time when the ‘wine lake’ and the ‘butter mountain’ threatened to bankrupt the EU. As a less developed economy, Spain had a large agricultural sector (as world leader for some produce, such as olive oil) and a high proportion of its population still on the land (30 per cent) with much lower wages. Therefore, the main problem during its accession negotiations was – as it was later on with Central Europe – that budgetary resources were insufficient to subsidize Spanish farmers at the same level as their French and Italian colleagues. Moreover, lower costs and productivity in Spanish agriculture left plenty of room for expanding production (which the CAP’s high prices would, in turn, stimulate), threatening further surpluses and increases in the EU’s budgetary expenditure (Commission 1978). To make enlargement affordable, the EU had to reduce the CAP’s level of subsidy for Mediterranean produce and/or increase contributions to the budget. Internal discussions about the reform of the CAP started with the Commission’s proposals of the ‘1980 May Mandate’ and ran ‘in parallel’ with enlargement talks. Spain’s accession thus became hijacked by the ongoing fight inside the EU between

262 Lorena Ruano those insisting on ‘budgetary discipline’ (finance ministers, notably of Germany and Britain) and those resisting it (agriculture ministers, especially from France and Italy), who demanded compensation for Mediterranean farmers who would lose out from increased Spanish competition. The Council could only announce its negotiating position on the ‘sensitive’ products at the end of 1984, after agreement at the Stuttgart Summit in June 1983 on the main points of a marginal reform (to the regimes of olive oil, wine and fruits and vegetables, which left Spain worse off) and an increase to budget contributions. The contents of these proposals were described as ‘very tough’ by Manuel Marín, the Spanish Minister for Relations with the EU and deputy negotiator (Le Monde, 12 June 1983). Long transition periods delayed the approximation of prices (leaving Spanish producers at a competitive disadvantage) and the opening of the EU market to the products in which Spain was most competitive (‘sensitive’ products). The reason for the EU’s insistence on the transition period was that the CAP reform, agreed with much difficulty among the member states between 1981 and 1984, had been insufficient to reduce significantly the costs to the budget that Spanish accession would imply. The raising of the ceiling in national contributions to the budget (also very difficult to agree) solved the EU’s immediate financial problems, but did not allow enough margin to offer Spain a ‘generous’ deal in the agricultural sector (Ruano 2001). Furthermore, with the introduction of the IMPs, the Commission managed to take the issue of Mediterranean agriculture away from the exclusive control of the agricultural policy community by framing its proposed solutions in ‘regional development’ terms, rather than merely agricultural ones. This strategy allowed funding to be obtained for the costs of enlargement in the agricultural sector, which would now appear in the budget as ‘structural policy’, while complying with budgetary discipline and avoiding a thorough reform of the CAP itself. The challenge of eastern enlargement: surpluses, competition and finances Like Spain, the CEECs sought EU membership to help consolidate the process of a transition to democracy and to market economies. Like Spain, they had to wait a long time for the EU to agree a complex reform of the CAP before they were able to start discussions on the substantive chapters of their accession. The problems of extending the CAP to the CEECs were similar to those of Spain’s accession twenty years before. All the candidates, except for the Czech Republic, had much higher levels of employment in agriculture than the EU average (4.8 per cent of the active population in 2000). Poland (18 per cent) was the most problematic, because of its absolute size, but Lithuania (22.5 per cent) and Latvia (17.8 per cent) were close to it. This was aggravated by sharp income and price disparities between the candidates and existing EU members, lower production costs, a much higher contribution of agriculture to their GDP (three to four times those of the EU) and the smaller size of holdings (Mayhew 2000b: 8). Therefore, aligning prices and support measures would have been unaffordable for the EU budget as the CAP stood (see, e.g., Ardy 2000: 93, for estimates).

Institutions, policy communities and enlargement 263 In the same way as Spanish entry was to aggravate the Community’s olive oil and wine lakes, the CEECs’ main products were precisely those which were already in surplus and responsible for most of CAP expenditure: cereal, milk, meat and sugar. Production was expected to increase further, given the incentives embedded in the CAP, and dumping the new surpluses on world markets was to increase expenditure on export subsidies, now incompatible with the EU’s trade commitments at the World Trade Organization (WTO). Also, the quick introduction of EU guaranteed price levels in the CEECs would delay structural reform, intended to reduce the number of people working on the land and increase the size and productivity of holdings. As large rural populations are very costly to the budget, especially since recent reforms shifted expenditure to direct income payments, the Commission insisted on accelerating structural farm reform as part of the pre-accession strategy, which it supported with a transfer of €3.1 billion (Ardy 2000: 95). The EU dealt with these dilemmas exactly as it did with the problems created by Spain’s accession. First, enlargement was linked to a reform of the main regimes that would cause trouble. Second, given that these reforms were insufficient to cope with the consequences of enlargement, the EU’s proposed terms of entry consisted of long transition periods for the full adoption of the CAP by the new members. The Commission (1997) justified the transition periods in agriculture with the large differential in price levels between the two sides. But there was also, as there was for Spain, the intention of avoiding a sharp increase in CAP expenditure, on which the Berlin European Council in 1999 put a ceiling. The German government refused to foot the bill as it did with Spain, making the dispute around the distribution of the costs to the budget more acute than ever. The Commission’s proposals for CAP reform in March 1999 envisaged a reduction of intervention prices of 20 per cent for cereals, 30 per cent for beef and 15 per cent for milk. Direct income payments of various types would compensate for these reductions, while the milk quotas were to be increased. The proposals encountered strong opposition on two fronts. First, from some member states, headed by France, and from farmers across the Union. Second, the finance ministers of Germany, Britain, the Netherlands and Sweden criticized the increase in budget expenses through direct payments (Financial Times, 23 February 1999; The Economist, 4 April 1998; Ardy 2000: 95). The internal disagreements prevented the EU from presenting a position paper on agriculture to the candidate countries before January 2002, thus delaying the discussions on the agricultural chapter until the very end of accession negotiations. The initial EU position, outlined in the Commission’s ‘Agenda 2000’, was very tough: the CEECs would not receive any direct income payments, because these were a compensatory measure for the reduction of a guaranteed price level that CEEC farmers never enjoyed. However, such an arrangement would put them at a competitive disadvantage vis-à-vis their Western counterparts, and entailed the creation of a two-tiered CAP. Since this was politically impossible, the EU’s position paper presented in January 2002 envisaged a slow introduction of such direct payments over a long transition period of ten years, reaching 100 per cent by

264 Lorena Ruano 2013 (Commission 2002). The CEECs reacted angrily that such ‘second-class’ treatment was ‘unacceptable’ – which is exactly the same wording used by the Spaniards in 1983 (El País, 29 January 2002, 18 February 2002, 5 March 2002). The proposals became particularly contested in Poland, where the People’s Party, based on an agricultural constituency, put Polish negotiators under pressure to obtain a more generous deal from the EU by announcing that it would otherwise campaign against accession in the referendum.2 Farmers elsewhere in Central Europe also criticized these conditions (BBC News online, 4 December 2002). In addition, those inside the EU favouring further CAP reforms opposed the proposals, because a commitment to phase in direct payments to new members would make it more difficult to phase them out for the enlarged Union in the future. The dispute inside the EU was finally settled on the eve of the Brussels European Council in October 2002, when a Franco-German deal put an upper limit to agricultural budget expenditure between 2003 and 2013 in exchange for a freezing of CAP reforms between 2004 and 2006. This agreement gave the Commission and the presidency a mandate to finalize enlargement negotiations, but it did little to improve the EU’s negotiating position, and the issue of direct payments lingered on until literally the very last minute of negotiations at the Copenhagen European Council in December 2002. A compromise package, formulated by the Danish presidency and approved by the member states the night before, proposed to allow the candidate countries to ‘top-up’ direct payments with national funds up to 30 per cent above the phasing in levels. Up to 40 per cent of these ‘top-ups’ could be co-financed by the EU budget (from their own allocations) until 2007 (Commission 2002). The candidate countries accepted the agricultural package in exchange for the creation of a ‘cash-flow facility’ in the enlargement budget that provided €900 million for Poland in 2004 and €300 million for the other nine acceding countries. In the end, as with Spain, the problem was solved by shifting non-agricultural funds into agriculture and bringing in long transition periods for the acceding countries, while CAP reforms themselves remained limited to what was acceptable to the agricultural policy community. In sum, the main problem of enlargement to Britain, Spain and the CEECs has been similar: the extension of the CAP to the new members affected the distributional arrangements among existing members and called for a reform of the budget and of the policy itself. Resistance to such reforms kept them at a minimum, shifting the costs of enlargement to the applicants in the form of ungenerous entry conditions. The applicants accepted these unfavourable terms of accession in return for side-payments in other areas (see Moravcsik and Vachudova, ch. 9 this volume). The absence of comparative studies of enlargement rounds has led to a neglect of these striking similarities in studies of EU integration. The remainder of this chapter provides a plausible, theoretically guided explanation of how the CAP was able to deflect pressures for reform induced by enlargement. The disputes about the CAP in the successive enlargement rounds cut across all states along a sectoral

Institutions, policy communities and enlargement 265 cleavage, which confronted agricultural actors with those in charge of finances and other areas, both at the national and at the EU level. The chapter therefore draws on institutionalist and policy networks approaches to ‘unpack’ the state and explain the limited, path-dependent changes of the CAP.

Institutions, policy communities and CAP stability Unpacking enlargement: the sectoral division of the EU Once the decision to accept new members is taken at the highest level, the broad objective of enlargement is ‘unpacked’ into a set of more manageable and concrete issues. The nature of this unpacking is determined by the EU’s institutional configuration. A key feature in the functionalist design of EU institutions is an institutional division of labour and technical, sectoral specialization. The ‘Monnet method’, which sought to depoliticize issues and make them susceptible to rational policy-making through disaggregation, is the origin of the strong sectoral division of the EU’s institutions. Inside the Commission, Directorate Generals (DGs) correspond to functional divisions. Even the Council of Ministers, representing the member states (territorial partition), is divided into specialized Councils. The disaggregation of accession negotiations into different ‘chapters’, which correspond to such functional divisions inside the EU, is an example of how institutional structures shape enlargement processes. This division of labour creates areas of ‘local rationality’ with self-contained collections of rules, which evolve independently in different domains (March and Olsen 1989: 26). As a result, the nature and contents of the acquis that applicants have to adopt varies from one policy area to another. In some areas, alignment with EU regulations requires liberalization and deregulation, but in others it needs intervention, such as resource transfers, which entail highly visible costs and easily mobilize opposition. In this respect, agriculture is substantially different from other EU policy areas, for its high degree of public intervention, protectionism, and funding from the common budget. For the British, Spanish and CEECs, adopting the CAP implied a notable rise in the degree of regulation and public intervention in their agricultural regimes, which were relatively more liberal before accession. Their entry had clear distributional consequences and mobilized opposition on both sides. Enlargement negotiations also vary from one sector to another, depending on whether the changes are necessary only for the new member, or whether they require revising existing EU rules. At first glance, it would seem that the ‘classical method’ of enlargement, reflected in the Commission’s insistence on the immutable nature of the acquis, shifts the adjustment burden onto the new member (Preston 1997: 18–22). However, in redistributive policy areas such as agriculture, new actors cannot be included without some modifications to EU rules. In these areas, negotiations are likely to be more complex, because the incumbents have to agree first on the reforms. That is why agriculture was problematic in these three enlargement rounds, despite the different characteristics of the applicant countries

266 Lorena Ruano and the various historical contexts and institutional configurations of the EU in which they took place. Another substantive variation across negotiating chapters concerns the number and intensity of linkages they have with other policy areas. While issues are connected to each other, their negotiation in a fragmented decision-making structure produces incoherent results. For example, inside the Commission, separate DGs process various aspects of the same issue, but follow different procedures and pursue dissimilar – or even conflicting – goals. Each DG jealously guards its competence and is often reluctant to cooperate with other DGs. The discrepancies in size and political weight of each DG have made some sectors, agriculture among them, disproportionately powerful, with DG Agriculture controlling nearly 70 per cent of the EU budget until 1988 (Wallace 1983: 59–60). The strong institutional insulation between sectors in the Council of Ministers has allowed agriculture ministers to oppose their own national finance ministers, thus amplifying the coordination gap, which is already acute in some member states (Wright 1996: 152; Kassim et al. 2000). During both Spanish and CEEC negotiations, this interdepartmental division led to the opposition of the German government to a reduction of guaranteed prices in the Agriculture Council while simultaneously advocating budgetary discipline in the Council of Finance Ministers (CFM).3 The insulation of the Council of Agriculture Ministers (CAM) is stronger than that in other sectors. In most EU policy areas, the Committee of Permanent Representatives (COREPER) prepares ministerial negotiations, which facilitates taking account of other interests when formulating their positions. By contrast, meetings of the CAM are prepared by the Special Committee on Agriculture (SCA), composed of senior national civil servants, which insulates agriculture ministers from the pressures that other ministers face (Rieger 1996: 108). The EU has devised several ways of coping with the problem of interdepartmental coordination. Inside the Commission, the president exercises this role, and special groups of Commissioners are established to handle clusters of related issues. In May 1983, for example, the Council instructed a working party of Directors General to examine the main outstanding problems in the areas of Mediterranean agriculture and its financing to unblock the Iberian negotiations for the Stuttgart European Council of 1983. The lack of coordination has similar effects as in intra-state policy formulation: problems have to be resolved at the highest level of the decision-making hierarchy: the rotating Council presidency and European Council meetings. This mechanism did not exist during the British accession negotiations. Horizontal coordination was therefore restricted to bilateral meetings of the heads of state and government (e.g., the Pompidou–Heath summit in 1971). In the Spanish case, discussions of detailed agricultural prices and quotas at the European Councils of Stuttgart and Fontainebleau were symptoms of a lack of horizontal coordination at lower levels of the EU’s decision-making structure. For eastern enlargement, the European Councils of Berlin in 1999 and of Brussels in October 2002 took the crucial decisions on agriculture and the budget.

Institutions, policy communities and enlargement 267 The institutions of the CAP and path-dependent change Individual policy areas present different institutional configurations with their accompanying ‘local’ or ‘bounded’ rationalities, which shape the way in which enlargement negotiations unfold. Specific rules and norms guide beliefs and behaviour in the agricultural sector. This chapter uses the concept ‘institutions’ as defined by North (1990: 3), which refers only to rules or ‘arenas’, and distinguishes them from ‘organizations’, which are the players or actors that operate within that framework. The institutions of the CAP were created in a series of negotiations which set out the constraints and opportunities within which agriculture would subsequently be managed at the Community level. North explains that rules are organized hierarchically, and vary from a general level, at which he locates constitutions (articles 32 to 39 of the Rome Treaty in this case), to specific regulations and contracts (e.g., level of production which triggers distillation in the wine regime). The higher up they are in the hierarchy, the costlier rule changes become, because other sets of rules depend on them, which explains why changes are more likely to occur at the margins (i.e., recontracting under the same framework) than at the level of general principles. The Treaty of Rome, which sets out the objectives of the CAP, ranks high in the hierarchy of rules that constitute the CAP system of governance. As such, these rules proved very resistant to reform in the course of the three enlargements studied here, and their wording in successive treaties remain almost unchanged. At the next level down the hierarchy of rules, the Agricultural Code of 1962 specified that the key instruments for the implementation of the CAP were guaranteed prices and Community preference, marginalizing the option of structural measures, which remained largely under the control of national authorities. These decisions, designed to promote self-sufficiency and cushion farmers from ‘market failures’, were based on a tight equilibrium among the EU-6, which reflected the ideas, goals and relative power of the existing players. These bargains became the framework for subsequent decisions, and triggered the creation of further and more detailed rules and organizations to put policy into practice. This process triggered the establishment of the various commodity markets from 1962 to 1969, constituted by a myriad of regulations and directives. Over time, this institutional level has experienced the highest rate of change, as actors had to adapt to exogenous changes, such as variations in world prices and production. Most of the changes induced by enlargement took place at this level, leaving the basic principles of the CAP almost intact. During Britain’s accession, the EU agreed to a series of specific changes, such as quotas for New Zealand products and sugar from the Caribbean, but rejected an outright revision of the principles (increasing production, maintaining farmers’ incomes) and instruments (guaranteed prices, Community preference) of the CAP, which Britain openly questioned. Equally, the EU devised a ‘special mechanism’, a budget rebate, which applied only to its particular case, to address the UK’s unfavourable budgetary situation, instead of revising the overall budgetary arrangements. Not even a more powerful position as full member of the

268 Lorena Ruano EU enabled Britain to obtain a substantial modification of the rules establishing the agro-budgetary acquis. Similarly, the threat of bankruptcy from Spanish accession led to revisions and changes in the regulations and directives concerning Mediterranean products (wine, olive oil, fruits and vegetables), which eventually resulted in the IMPs. Although these programmes reintroduced the use of structural measures, they did not challenge the fundamental idea that agriculture ought to be subsidized, or the way in which the EU obtained its ‘own resources’. Even under the most severe budgetary pressure, the Fontainebleau European Council agreed in 1984 to add a further €5 billion to fund the IMPs, by means of raising the VAT-based levy on member states. These ‘changes at the margins’, or ‘recontracting within the same broad framework’, did not really tackle the underlying problem of overproduction. By 1987, the EU found itself facing exactly the same problem: the exhaustion of its ‘own resources’ (Gardner 1987: 167–70; Laffan and Shackleton 1996: 79). Moreover, had the problems of the first enlargement been addressed fully, the second one would not have faced so many obstacles: one of the main causes delaying the Spanish accession was precisely the row about the British rebate. In the case of eastern enlargement, CAP reforms continued the 1992 MacSharry reforms. They gradually shifted subsidies from guaranteed prices to direct income payments to curb the growth of expenditure, but did not question the idea of supporting farm incomes. Moreover, the agreement between France and Germany, which unblocked the final package, openly postponed CAP reform until 2006. Reforms were so insufficient to cope with the costs of enlargement that the EU sought not to extend direct income payments to new members, at the risk of creating a two-tiered CAP. These three cases of accession negotiations were similar not only in the sense that they challenged the CAP and its budgetary arrangements, but also in the way in which this challenge was met: by introducing the minimum of change needed to meet new conditions. Incrementalism – the continuation of past policies by making minor adjustments despite their poor performance – prevailed, not ‘rational policy-making’. Historical institutionalism offers valuable insights to explain this institutional ‘lock in’ and path-dependent change. The existence of previous rules in a given policy area favours a ‘reactive’ approach to policy-making on the part of all actors. The CAP, as one of the most long-standing common policies, had already by 1969 a very large, technical and detailed acquis. Change remained incremental, with the member states and the Commission predisposed only to marginal adjustment rather than radical change (Wallace 1983: 47). The European agricultural policy community A shift of focus from rules and norms to the actors, defined as the organizations which interact with the above described institutional framework, complements institutionalist theory with a ‘meso-level’ approach that facilitates empirical research. The ‘policy network’ approach works with three sets of variables which are clearly identifiable: membership, interactions and resources (Marsh and

Institutions, policy communities and enlargement 269 Rhodes 1992; see also Thatcher 1998). By looking at these characteristics of a policy network, it is possible to classify forms of interest intermediation between private and public actors, both national and supranational, in the agricultural sector. This focus is important because not all policy areas are configured in the same way. Policy networks can vary from tightly integrated ‘policy communities’ (such as agriculture), where actors tend to share ideas about the policy, its problems and solutions, to loosely linked and pluralistic ‘issue networks’ (such as technology). This difference accounts for particular policy outcomes and the extent to which policy changes. Actors’ relations in the CAP exhibit all the characteristics of a policy community. A restricted and stable membership ensures ideological consensus among the actors inside the community. A ‘local rationality’ has developed which excludes radical ideas about reform. The structural dependencies between the actors of this community tend to reinforce their common views. Membership and the ‘mobilization of bias’ The first question to address when analysing a policy network is: who has an interest in this policy problem? However, not all stakeholders participate in the decision-making process. The ‘mobilization of bias’, that is, the way in which institutions structure conflict and distribute power unequally among actors by giving them different degrees of access to the policy process, is a central concept in policy network analysis because it determines membership. This is why Smith (1992: 32) distinguished between the ‘inner’ and ‘outer’ circles of a policy community, while Marsh and Rhodes (1992: 259) refer to the ‘attentive publics’ of a policy network. Consumers, taxpayers, environmental groups and the applicant countries belong to the ‘attentive public’ or ‘outer circle’ of the EU agricultural policy community. Although they are stakeholders, their access to the decision-making process is limited and sporadic. In contrast, the ‘inner circle’ is limited to those actors who participate regularly in the formulation and implementation of the policy. These actors include, first, the national governments – more precisely, national ministries of agriculture, represented in the CAM. All of them have close relationships with their national farm organizations and see it as their role to win the best possible deal for their own farmers. Their attitude partly accounts for the rapid increase in the cost of the CAP in the 1970s and early 1980s. Second, the ‘inner circle’ includes the Commission’s DG Agriculture (formerly DG VI), in charge of the formulation of CAP proposals and their implementation and, therefore, with an inbuilt interest in the development of this important policy (‘mission creep’). It is one of the largest DGs, with over 1000 staff spread across eleven administrative units to address the full range of agricultural policy issues, from the various commodity markets to international trade. Managing such a complicated policy as the CAP has made DG Agriculture partly responsible for the incremental policy-making in the sector, and its routinized procedures are behind its reputation for conservatism (O’Hagan 1996: 253).

270 Lorena Ruano Finally, the ‘inner circle’ includes the producers’ organizations, articulated at local, national or transnational level through the European umbrella organization COPA (Comité des Organisations Professionnelles Agricoles des Pays de la Communauté Economique Européenne). Its monopoly of farm representation was intended to spare the Commission from having to arbitrate between and aggregate conflicting agricultural interests, by subsuming and aggregating their enormous diversity under a single voice (Meynaud and Sidjanski 1971: 172).4 Functional monopolies of interest intermediation are one of the most common ways of restricting membership of, and access to, a tight policy community. Controlling the number and nature of demands on the system makes outcomes more predictable and is therefore a primary source of policy inertia. The fact that governments have traditionally intervened in agricultural markets, and become the ‘paymasters’ of the industry, has made representation through interest groups largely state-sponsored, or at least encouraged, because the authorities need to consult the interests affected by and involved in their decisions. This has made farmers’ associations powerful, as their cooperation is indispensable at the formulation and implementation stages. This relationship is reproduced at the European level on a larger scale, where DG Agriculture, despite its size, is still understaffed (Mazey and Richardson 1994) in comparison to national ministries and thus depends more on farmers’ associations for implementation (Wilson 1977: 36). In this way, the high degree of mobilization of farmers at the European level is due to the fact that their incomes depend directly on the decisions taken in Brussels, and because EU authorities need and consult them constantly. At the national level, agricultural interests also exhibit an unusual degree of organization when compared to other sectors, and farmers have tended to capitalize on their electoral significance as well as on their capacity to mobilize their members and take them onto the streets if necessary. The membership of this policy network has been reduced (to DG Agriculture, the CAM and producers’ organizations) and become stable over time (in the sense that no new actors have been included in the ‘inner circle’), both of which are characteristics of policy communities as defined by Marsh and Rhodes. These actors share a set of common beliefs about the CAP which, for them, transforms the issue of budgetary discipline into a discussion of whether subsidies should take the form of guidance measures instead of guaranteed prices. Related to membership is the issue of exclusion, i.e., the way in which a policy community deals with those interests which are affected by its actions but kept outside its boundaries. The complexity and technicality of the CAP’s rules form the most important barrier, which ensures that those actors who lack the specialized knowledge are excluded, or else they ‘go native’ once they acquire the necessary knowledge to participate meaningfully. The technical nature of the policy discourages participation from outsiders and reduces their demand for representation in the policy process (Smith 1992: 32; Gardner 1987: 177). Despite the turn towards ‘rural’ policy with the MacSharry reforms, which brought other actors to the network from the policy areas of environment, tourism and develop-

Institutions, policy communities and enlargement 271 ment, their participation is still sporadic when compared to that of the actors of the ‘inner circle’. Consumers, the ‘natural enemies’ of producers, have been excluded from the decision-making process. The CAP’s declared objective of reasonable prices for consumers (EEC Treaty, article 39.1) is therefore ignored in favour of the objective to ensure a fair standard of living for the ‘over-represented’ producers. First, EU institutions and activities are built in a way that emphasizes production, and the exclusion of consumers is not unique to the agricultural sector, despite the Commission’s efforts to help them organize and to have them represented (Meynaud and Sidjansky 1971: 349–81). Second, consumer associations lack resources of their own and the capability to mobilize members and ‘take to the streets’. They have to monitor a very large number of policy areas apart from agriculture, so their actions tend to be dispersed and their power diffused. Third, the average European consumer is not aware of the detailed workings of the CAP. Fourth, the Comité de Contact des Consommateurs de la Communauté Européenne, which is the arena where consumers participate at the EU level, has complained about not being consulted at the stage of policy formulation, but only at an advanced stage, after the essential principles of a proposal have been set up, which reduces their influence (ibid.: 361). In this way, the informal rules about consultation, which are part of CAP institutions, contribute to the exclusion of consumer views. Just as EU consumers are excluded from the policy process, so there is not much room left for the accommodation of the applicant countries. The conduct of accession negotiations tends to favour the incumbents’ interests over those of the applicants (Ruano 2001: ch. 3). In the British case, Commonwealth sugar producers complained that they ‘did not have votes to set against the power of the beet sugar lobby in France’, which advocated the strictest application of the Community preference principle to their detriment, via the French agriculture minister in the CAM (Young 1973: 159). Spanish interest groups were also excluded from the process of reforming the acquis for wine, olive oil and fisheries, the central issues of the negotiations. Neither did the views of CEEC farmers influence the formulation of ‘Agenda 2000’. This exclusion made applicants bear most of the adaptation, while the existing members minimized theirs by changing the acquis prior to negotiations: the budget rules in the case of Britain, the regimes for wine and olive oil before talking to Spain, or those for milk and beef before negotiations with Poland. As a consequence, once inside, both Britain and Spain attempted to renegotiate the most unfavourable terms of their accession. What the Polish will do remains to be seen. Another crucial actor which is kept on the sidelines of the agricultural policy community is the Council of Finance Ministers (CFM), which in principle has to sanction expenditure. However, the establishment of the SCA, as independent from COREPER, has also institutionally insulated the CAP from finance ministers. The status of agricultural guaranteed spending as part of the EU legal commitments has further reduced the moderating role of the CFM, and of the

272 Lorena Ruano European Parliament, despite their role in the annual budgetary cycle (Laffan and Shackleton 1996: 74; Rieger 1996: 110). At the domestic level, fixing guaranteed prices at the CAM meant that all member states have lost important means of controlling agricultural expenditure. Although budgetary constraints have brought about gradual change in the CAP, the agricultural policy community has managed to translate reform on its own terms. Interactions: resource exchanges and structural dependencies The exclusion of actors who oppose the operation of the CAP reinforces the common ideology inside the policy community. How is such a closed community maintained? Marsh and Rhodes suggest that how actors relate to each other, and whether their resource exchanges produce positive outcomes for all, constitutes the main incentive to keep the system as it stands. The first element to analyse in the resource exchanges among actors of the European agricultural policy community is the framework which structures such exchanges. The CAP framework represents a distortion of original EU principles. It ignores the general preference for a market allocation of resources in favour of redistributive intervention. Public authorities set prices on the grounds of sociopolitical objectives – a fair standard of living for farmers – a practice which has encouraged ‘rent-seeking’ behaviour. The CAP is ‘a self-contained world’ which cannot be judged on purely economic criteria of rationality or efficiency (Rieger 1996: 100). The interventionist nature of the CAP, one of the EU’s longest-standing policies, is therefore at the root of the relations between actors inside this policy community. The CAP’s annual fixing of guaranteed prices built a cyclical routine of interaction and contacts between the main actors, which, over time, has made relations between the groups highly stable and institutionalized in regular meetings and informal events. This stability is an uncommon feature in other EU policy areas, where, according to Richardson (1996: 11), uncertainty prevails and the rules of the game are still disputed. Such stability explains the incremental nature of policy-making. The timing and nature of the involvement of farmers’ interest groups in the policy process have increased with respect to their previous position in purely national settings, because the EU institutional layer has provided more access points to the decision-making process (Van Schendelen 1994: 10). First, in the consultation phase, COPA has ‘constitutional rights’ of consultation, and its leader meets with the Commissioner for Agriculture every four to six weeks, while farmers’ representatives dominate many committees (Gardner 1987: 170). The influence of agricultural lobbies during the drafting phase inside DG Agriculture is felt through personal contacts. Moreover, given the high degree of technical specialization, there seems to be considerable job mobility for individuals from posts in farmers’ associations to work in the national ministries of agriculture and in DG Agriculture. This is an additional source of personal contacts and shared ideas among the three sets of organizations inside this policy community.

Institutions, policy communities and enlargement 273 When defending a distinctively national agricultural interest, the influence of these groups depends primarily on how much pressure they can put on their national governments to defend their interests at the EU level in the SCA and the CAM where Commission proposals are approved or rejected. In most cases, there is a close policy community at the national level which works for the defence of the national agricultural interests at the European level.5 Many of these associations also participate in the implementation of policy, where they further interact with national public administrations and the Commission. In sum, the organizations which represent agricultural producers intervene at all the stages of the policy process, from consultation to implementation. The fact that this is an interventionist policy means that public authorities (both the Commission and national agriculture ministries) cannot work in this area without two precious resources which the farmers’ associations possess: detailed and specialized information, and the organizational infrastructure for implementation and political control. This coincides with Marsh and Rhodes’s view that the key resources, which give interest groups privileged access to the decision-making process, are economic position and specialized knowledge. In this way, producers and professional groups are consulted and their interests become ‘vested’; they dominate the policy community and keep it closed to outsiders. Farmers also depend on public authorities for their incomes, and this mutual dependence for precious resources explains the symbiotic nature of the relationships and their stability. The symbiosis is such that the roles of actors appear to have been reversed. The elites of farmers’ associations ‘sell’ to their members the agricultural policy decided by the authorities, and use their organizational capacity to exercise political control. On the other hand, ministers of agriculture voice farmers’ demands and defend their interests, while DG Agriculture ‘sees its role as that of a farm support organization’ (Smith 1992: 31). This confusion of roles is possible because there is an underlying ideological consensus among the actors, which also facilitates job mobility among the three kinds of organizations (national ministries, DG Agriculture and farmers’ associations). Thus, knowledge is a crucial resource, and, although cognitive boundaries are intangible, they remain decisive as means of exclusion and cohesion.

Conclusion The CAP is the EU’s main redistributive policy and still absorbs the largest proportion of its budget. This has made the financial costs of British, Spanish and eastern enlargement highly visible in the agricultural sector, requiring a reform of the CAP in each case. Yet the CAP’s path-dependent evolution has prevented the radical revisions that were necessary to cope with the disruptions that each enlargement brought to the agricultural sector. This chapter has traced the existence of a policy community in the agricultural sector at the European level, which has managed to keep changes to a minimum and reforms on its own terms. The number of participants in agricultural decisionmaking is generally limited to DG Agriculture, the CAM and the farmers’

274 Lorena Ruano associations, who lobby collectively through COPA or through national channels. Producers’ interests have clearly dominated policy outcomes, while actors which could present a potential threat to the status quo (consumers, the CFM, applicant countries) are excluded by a lack of horizontal coordination and cognitive barriers. Interactions between the organizations are not only frequent but are also cyclical, which creates a high degree of continuity in the policy. The consequences for enlargement of this resistance to reform are manifold. First, enlargement negotiations have, in all three cases, become tangled with bitter disputes inside the EU, thus delaying and complicating the discussion of the agricultural chapter with the applicants, leaving it to the very end of negotiations and putting the applicants in a ‘take-it-or-leave-it situation’. Second, the EU presented the candidates with tough conditions for their incorporation in this sector, which passed much of the costs of adaptation on to the applicants. In the Spanish and Central European cases, it meant opening up their markets, but without the full extent of support until the end of long transition periods; for Britain, it constituted a very disadvantageous budgetary arrangement which poisoned the relation of that new member with the rest of the EU. As compensatory measures, the other redistributive arrangements of the EU, in particular the structural funds, changed considerably. In the case of Spain’s accession, the creation of the IMPs and of the cohesion fund helped to maintain the CAP more or less intact. This also happened after the first enlargement when the regional fund was created to compensate Britain for an agro-budgetary arrangement that did not suit its characteristics. Most recently, the reform of the thresholds for allocating structural funds, together with transitional budgetary rebates, has constituted a sweetener for the harsh deal the CEECs had to swallow in the agricultural sector. Finally, drawing on institutionalist and policy networks approaches, this chapter has provided a theoretically informed explanation of the CAP’s ability to prevent radical changes despite recurrent pressures induced by successive rounds of enlargement. This approach shows why the CAP tail seems to wag the EU dog when it comes to accession negotiations.

Notes 1 For simplicity, the term ‘EU’ will also be used to refer to the European Communities (EC) of earlier periods. 2 The deputy prime minister and agriculture minister, Jaroslaw Kalinowki, as leader of the coalition partner in the government and also the head of the Peasant Party, assumed a crucial position in the talks between Poland and the EU. For the Polish position during the last negotiating sessions see BBC News online, 3 December 2002; European Report (14 December 2002). 3 For Spain, see Agra Europe (15 February 1985): 1. For the CEECs, see The Economist (4 April 1998). 4 This monopoly of representation is also observable at the national level in several member states, for example in Germany and Britain. 5 For a comparative analysis of the national networks, see Ruano (2001: ch. 5).

Institutions, policy communities and enlargement 275

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276 Lorena Ruano O’Hagan, P. (1996) ‘EU Agricultural Policy-Making towards Poland, 1989–1995, and its Implications for Policy Network Theory’. PhD dissertation, Oxford University. O’Neill, C. (2000) Britain’s Entry into the European Community: Report on the Negotiations of 1970– 1972. London: Frank Cass. Preston, C. (1997) Enlargement and Integration in the European Union. London: Routledge. Richardson, J. (1996) ‘Policy-Making in the European Union: Interests, Ideas and Garbage Cans of Primeval Soup’, in J. Richardson (ed.), European Union: Power and Policy-Making. London: Routledge. Rieger, E. (1996) ‘The Common Agricultural Policy’, in H. Wallace and W. Wallace (eds), Policy-Making in the European Union. 3rd edn, Oxford: Oxford University Press. Ruano, L. (2001) ‘Institutions, the Common Agricultural Policy, and the European Community’s Enlargement to Spain, 1977–1986’. PhD dissertation, Oxford University. de la Serre, F. (1987) La Grande Bretagne et la Communauté Européenne. Paris: Presses Universitaires de France. Smith, M. J. (1992) ‘The Agricultural Policy Community: Maintaining a Closed Relationship’, in D. Marsh and R. A. W. Rhodes (eds), Policy Networks in British Government. Oxford: Clarendon Press. Thatcher, M. (1998) ‘The Development of Policy Network Analyses: From Modest Origins to Overarching Frameworks’, Journal of Theoretical Politics, 10: 239–416. Tracy, M. (1989) Government and Agriculture in Western Europe: 1880–1988. 3rd edn, London: Harvester Wheatsheaf. Van Schendelen, M. P. C. M. (ed.) (1994) National Public and Private EU Lobbying. Aldershot: Dartmouth. Wallace, H. (1983) ‘Negotiation, Conflict and Compromise: The Elusive Pursuit of Common Policies’, in H. Wallace, W. Wallace and C. Webb (eds), Policy-Making in the European Community. 2nd edn, London: Wiley & Sons. Wilson, G. K. (1977) Special Interests and Policymaking: Agricultural Policies and Politics in Britain and the United States of America, 1956–70. London: Wiley & Sons. Wright, V. (1996) ‘The National Co-ordination of European Policy-Making: Negotiating the Quagmire’, in J. Richardson (ed.), European Union: Power and Policy-Making. London: Routledge. Young, S. Z. (1973) Terms of Entry: Britain’s Negotiations with the European Community, 1970–72. London: Heinemann.

Part V

Theory, enlargement and European integration

13 Deepening and widening integration theory Markus Jachtenfuchs

Can there be a theory of integration? The debate of whether the European Union constitutes an n of 1 and whether as a consequence inductive generalizations from the study of the EU cannot lead to generally applicable knowledge is almost as old as the study of the EU. Much confusion has been created rather than solved by this debate. The best scholarship of the old structuring dichotomy in research on European integration – the debate between neo-functionalism (Haas 1964) and intergovernmentalism (Hoffmann 1966) – has always aimed at developing general theories and at looking at the EU from such a general point of view. The substantive theories at stake varied, however. In the case of neo-functionalism, it was a theory of societal modernization which largely relied on economic, political and social actors as primary agents for change. In the case of intergovernmentalism, it was a theory of international competition that saw states as the main agents. Whereas Haas stressed the unifying effects of modernization, Hoffmann argued that similar trends lead to different outcomes because they were transformed by largely differing national traditions and by the competitive nature of the international system. Both authors are here taken as protagonists of a much larger debate. They tried to explain a series of events, namely institution-building in the European Union, by different theories. As theoretical accounts of European integration which added theoretical depth and empirical richness to more general accounts, they can be considered as ‘integration theories’. Both shared the same explanandum, namely the development path and the shape of the Euro-polity. Hence, they can be considered as competing theories. The present debate is more diffuse. Ernst Haas (1971: 26) had already complained that different integration theories had different or underspecified dependent variables and were thus not really competing but complementary or partly overlapping. Today, this is even more true. Some argue that the EU since the 1960s has achieved a degree of maturation that makes it comparable to a state-like political system. In consequence, what we see in the EU is ‘politics like any other’ that can and should be analysed by the tools and theories of comparative politics (Hix 1994; Hurrell and Menon 1996). Competing theories in this case would be theories of electoral choice, coalition formation, etc., and the EU would be just one case among many countries, coalitions, etc., although a rather special one.

280 Markus Jachtenfuchs The governance perspective makes a similar argument (Jachtenfuchs 2001). Its guiding question is the impact of different institutional settings and actor constellations on policy outcomes. Like the comparative politics approach, it applies general theories to the concrete case of the EU or treats it as one case in a broader sample. In a simplified manner, one could distinguish the different streams of research by their dependent variable: classical integration theory (neofunctionalism and intergovernmentalism) is interested in the polity, the comparative politics perspective in politics, and the governance approach in policy outcomes. This is just another way of expressing the old metaphor of blind men and the elephant (Puchala 1971). There is no single theory of European integration, or even a competition among several theories to achieve that status, but a number of different theories that are only in part mutually exclusive or competing with each other. In addition to these broad approaches which correspond largely to the standard subdisciplines of political science, a number of partial theories (e.g., on ‘judicial politics’), broad problem-oriented perspectives, including normative theory (e.g., on ‘democracy’), or more abstract theories bridging the gap between different spheres of action and different subdisciplines (e.g., ‘actor-centred institutionalism’) have been applied to various aspects of European integration, leaving aside theories from other disciplines. The discovery that a phenomenon in society is multifaceted is certainly not new among scholars working in the field of European integration. What is changing as compared to the initial phase of theorizing about the EU in the 1960s, however, is the significantly higher degree of theoretical pluralism and the mutual irrelevance of approaches. New insights in, say, coalition formation in the European Parliament do not have any impact on theorising about EU constitutional bargains because these theories have different fields of application which do not overlap. Neo-functionalism, in contrast, was, despite its broad foundation in a more general theory of modernization, a frontal assault on realism, the prevailing theory of international relations at the time. In the early days, European integration was the subject of a controversy within international relations about the relative importance of ‘second image’ vs. ‘third image’ explanations, about the relevance of state actors vs. societal actors and about the possibility of creating durable peace by overcoming the anarchical structure of the international system. This clear embeddedness in one single subdiscipline has been lost.

Is the rationalism–constructivism divide helpful? For many observers, international relations is now engaged in another grand debate between rationalism and constructivism (Risse 2002). The problem with this juxtaposition is that it is one between meta-theories or paradigms. These metatheories do not lead directly to testable expectations about observable outcomes but have first to be transformed into substantive theories. Some even doubt the possibility that meta-theories can be tested against each other but argue instead

Deepening and widening integration theory 281 that they constitute equally acceptable ways of explaining and understanding the world which can only be assessed within their own framework of rationality or by meta-criteria such as internal consistency and scope (Meyers 1990). At the present state of the debate, rationalism is clearly the established research programme and has a high degree of theoretical refinement and coherence. Constructivism is the challenger to the established programme and is still struggling to find its shape, as witnessed by a considerable number of review articles about what constructivism really is (e.g., Guzzini 2000) and an intensive debate most notably in the European Journal of International Relations. Some scholars, including the editors of this volume, believe that the debate between rationalism and constructivism could also serve as a major scientific cleavage for research on European integration in general and on enlargement in particular. Such a clear dichotomy, it is submitted, helps to develop clear theoretical positions, distinct cause–effect relationships and testable hypotheses. It could thus contribute to a better understanding not only of world politics but also of European integration understood in the classical tradition as a subfield of international relations. If their status as meta-theories is taken seriously, both rationalism and constructivism could create variations among the substantive theories of European integration. There could be rationalist as well as constructivist versions of neofunctionalism and intergovernmentalism, of comparative politics approaches as well as within the governance perspective. This is at first an interesting way of retrospective classification of theoretical debates because it quickly turns out that the main protagonists of past debates, most notably neo-functionalism and intergovernmentalism, are quite firmly established within the rationalist camp. The radical variant of constructivism which used to figure under labels such as postmodernism, post-structuralism, etc., is most clearly an alternative research programme to the prevailing rationalist mainstream. It rejects causal explanations, the need or even the possibility to formulate testable hypotheses, and often claims that social reality is accessible to research only in the form of discourse. Science, in this view, can have no direct grip on reality. Works on European integration from that perspective (e.g., Diez 1999) claim that they can see issues and connections that rationalism is not equipped to see. Hence, both offer complementary perspectives that cannot be tested against each other. Scientific rigour is possible and necessary in both cases; however, a rationalist reconstruction of such constructivist work for the purpose of ‘testing’ it does injustice to the latter because it tests not the constructivist ‘hypothesis’ but a reconstruction remote from the original. The bulk of empirical constructivist work seems to be somehow afraid of drawing these radical consequences and instead sticks to a vaguely defined empirical mainstream. This makes them subject to methodological standards of rationalist theories and open for empirical testing. Often, constructivist work fares badly in this competition (cf. the special issue of the Journal of European Public Policy on ‘The Social Construction of Europe’ [vol. 6, no. 4, 1999] and the pertinent criticism by Moravcsik 1999). One should take into account that constructivist concepts,

282 Markus Jachtenfuchs theories and methods are not yet as developed as is the case for its rationalist counterparts (Risse and Wiener 1999). But the problem lies deeper. Meta-theory bias is a problem for constructivism because it leads to the neglect of empirical results. And asking constructivists what substantively new insights they have on European integration is not a sign of indecent positivism that a good constructivist should not even bother to answer. That de Gaulle had very particular views on European integration or on French national security is not an exciting new constructivist discovery. Nor is it very surprising that there have been many plans for the institutional shape of the European Union, some of which became politically relevant whereas others did not. Some constructivists seem to be caught in the dilemma between a radical constructivism that is not appealing to them and the fear that beautiful empirical discoveries might be tested and found invalid. But constructivism must not be an excuse for bad science. Arguments about the ontological primacy of constructivism do not help out. Even if it is true and an important insight that the basic categories of international relations such as the anarchical nature of the international system or the state are socially constructed instead of being natural givens, empirical claims of constructivists that something was ‘true’ can and must be tested. The question is, against what? When it touches empirical ground, the current controversy between rationalists and constructivists seems to boil down to a debate about the explanatory power of material interests on the one hand and ideas or interests on the other (for the case of EU enlargement, see, e.g., Schimmelfennig ch. 7 this volume). On first glance, this appears to be a welcome operationalization of a controversy that seems sometimes quite esoteric. At closer inspection, however, the assessment is less positive. First, as material interests stand for rationalism and ideas or identities for constructivism, the relative importance of one or the other factor seems to amount to a victory of one theory over the other. Linking the fate of meta-theoretical orientations to one single causal factor comes across as unfortunate. Second, this dichotomic either/or view is a hindrance to pursuing the more important question about the conditions under which interests, ideas and identities matter respectively. That both material interests and ideas or identities matter for political outcomes is a truism for those not familiar with the rationalism– constructivism controversy. However, the desire to see one theoretical side win the battle leads to phrasing hypotheses about the influence of interests or ideas/ identities in an either/or way or to unconvincing statements about what rationalism allegedly cannot explain or even see and the premature refutation of constructivist claims. We are currently experiencing a period in the development of the social sciences that could be characterized by the bridging of old cleavages between interests and institutions, agency and structure, qualitative and quantitative methods (Goodin and Klingemann 1996: 11). Research on European integration should not go into the opposite direction and forego the opportunities for cumulative knowledge offered by synthetic thinking.

Deepening and widening integration theory 283

Implications for research on enlargement The contributions to this volume all have a strong theoretically inspired research question. This makes them interesting even for readers who are less concerned with the details of the enlargement process. But it also makes them vulnerable to being overly rigorous in their approach and thus leaving possible empirical insights as well as contributions to broader theoretical debates unexplored. When reading the chapters in this volume from a perspective which looks less at their contribution to debates between theories but more at their assessment of causal factors, it becomes quickly obvious that all of them (although to varying degrees) look at a rather small set of agents, causal factors and boundary conditions for explaining outcomes. These agents and factors are the standard tools of political science: interest groups, political parties, governments, ideas and institutional frameworks. Apart from Sedelmeier’s contribution (ch. 11 this volume) which looks explicitly at sectoral interests, a dichotomy between business interests and trade unions seems to be most important. Business umbrella associations both within the EU and in applicant countries seem to favour enlargement if the country’s economy is in a competitive position. On the whole business umbrella associations seem to be generally favourable to enlargement. Their positions may be explained by the expected losses or benefits of sectoral associations (or, more precisely, of their members) on the basis of the assumption that umbrella associations are strongly subject to the ‘logic of membership’, i.e., to the interests of their member associations. The crucial issue in the interests vs. ideas debate is whether the position of member associations can be explained by their position in the international economy or whether ideational factors also have to be taken into account. Hypothetically, one could assume that ideas play a major role only in cases of cognitive deficits – when enterprises and sectoral business associations do not really know what to expect. When the effects of enlargement are clear, actors do not have much choice because their survival is at stake: associations within an uncompetitive sector are unlikely to support enlargement. That the Austrian Federation of Industrialists was strongly in favour of EU membership can be explained on the basis of material interests. Equally unsurprising is the support of internationally oriented capital. The same applies to trade unions in exportoriented sectors (Bieler ch. 4 this volume). But why did the uncompetitive parts of the Austrian economy give in? If one side of the pro-/anti-membership divide is overwhelmingly strong, the outcome is easy to explain. A stalemate is more difficult to account for. Bieler offers an idea-oriented explanation: the anti-membership faction (the position of which can be explained on the basis of material interests) was not able to offer an appealing alternative political project. Hence, export-oriented sectors were able to win political support because their political project resonated with the positions of the political centre. This is just a brief example of how interests and ideas could be used concurrently in an explanatory argument without having to assume a causal primacy

284 Markus Jachtenfuchs of either factor from the outset. Social actors can be rational without being either narrow-minded materialists or quixotic idealists. Very similar questions to the one discussed above are explored in Moravcsik’s The Choice for Europe (1998), but the potential of taking issue with his theoretical framework on the basis of solid empirical research remains unexplored here. Visions about the nation-state as discussed by Gstöhl (ch. 2 this volume) could lead to the same type of reasoning. Rational-choice theories are not the only ones that can be criticized for having preferred to ‘confirm’ their approach by looking at easy cases instead of subjecting it to hard cases (Green and Shapiro 1994). This criticism has led to an overreaction – far too many cases are too easily claimed to be hard ones. As a problemoriented approach seems to have a lower reputation than a theory-oriented one or even a meta-theory-oriented one, authors too often do not even look at potential alternative or supplementary explanations. Testing theories is not the only legitimate way of doing good science, and building strawmen for the simple purposes of having something to test is certainly a futile exercise. But if differing perspectives on an issue are available in the literature, they should not be ignored simply because they belong to the wrong meta-theoretical camp. Apart from taking into account results of different theories on an observable level where they are comparable, knowledge may increase because an available analytical model is broadened and specified. The controversy between various theories of European integration has emphasized the differences between these theories at the expense of their common ground. Under the surface of the heated controversy about whether states or social actors were the driving forces of integration, whether ideas or interests were superior, a broadly shared understanding of European polity-building has emerged which allows us to treat allegedly big issues about structure and agency, ideas and interests etc., as empirical questions. This understanding can briefly be characterized as follows (for more detail, see Jachtenfuchs 2002: 24–7, 214–19). First, polity-making decisions in the EU are first and foremost taken by state executives in large multilateral negotiations. During these negotiations, the supranational EU institutions play only a minor role. Second, preferences of state executives are created in domestic political processes. The most important causal factors explaining these preferences are the pressure of domestic groups, political ideologies about a legitimate political order, and the desire of governments to be re-elected. Third, preferences of domestic actors can in part be understood as direct reactions to structural stimuli. This applies mostly to purely economic issues where the market institutionalizes the elimination of actors with ‘false’ preferences. In other areas, structural theories of preference formation are not (yet?) available. Fourth, it is still unclear what happens if strong structurally determined preferences and strong ideationally determined preferences clash. This would be a major field for open-minded empirical studies by both rationalists and constructivists. Although this common ground may look rather rationalist (see Pollack 2001) and hence one-sided to some, this is not the case. The key is an open approach to preference formation and decision-making that tries to make systematic arguments about the role of ideas or identities and interests with respect to different sectors,

Deepening and widening integration theory 285 time horizons, etc., instead of trying to ‘prove’ the causal primacy of either factor at any price. Such a problem-oriented approach is able to widen the scope of integration theory by making shared knowledge between the different branches of integration theory (polity-, politics- and policy-orientations) possible and at the same time to deepen it by linking it to more general questions of social theory, such as the grand old questions of the interrelationship between institutions, interests and ideas (Scharpf 1997). By opening a field of new inquiry in preference formation and forms of institutional adaptations, research on EU enlargement offers exciting new possibilities here.

References Diez, T. (1999) ‘Speaking “Europe”: The Politics of Integration Discourse’, Journal of European Public Policy, 6(5): 598–613. Goodin, R. E., and Klingemann, H.-D. (1996) ‘Political Science. The Discipline’, in R. E. Goodin and H.-D. Klingemann (eds), A New Handbook of Political Science. Oxford: Oxford University Press, 3–49. Green, D. P., and Shapiro, I. (1994) Pathologies of Rational Choice Theory: A Critique of Applications in Political Science. New Haven, CT: Yale University Press. Guzzini, S. (2000) ‘A Reconstruction of Constructivism in International Relations’, European Journal of International Relations, 6(2): 147–82. Haas, E. B. (1964) ‘Technocracy, Pluralism, and the New Europe’, in S. R. Graubard (ed.), A New Europe? Boston, MA: Hougton Mifflin, 62–88. Haas, E. B. (1971) ‘The Study of Regional Integration: Reflections on the Joy and Anguish of Pretheorizing’, in L. N. Lindberg and S. A. Scheingold (eds), Regional Integration: Theory and Research. Cambridge, MA: Harvard University Press, 3–42. Hix, S. (1994) ‘The Study of the European Community: The Challenge to Comparative Politics’, West European Politics, 17(1): 1–30. Hoffmann, S. (1966) ‘Obstinate or Obsolete? The Fate of the Nation-State and the Case of Western Europe’, Daedalus, 95(3): 862–915. Hurrell, A., and Menon, A. (1996) ‘Politics Like Any Other? Comparative Politics, International Relations and the Study of the EU’, West European Politics, 19(2): 386–402. Jachtenfuchs, M. (2001) ‘The Governance Approach to European Integration’, Journal of Common Market Studies, 39(2): 245–64. Jachtenfuchs, M. (2002) Die Konstruktion Europas: Verfassungsideen und institutionelle Entwicklung. Baden-Baden: Nomos. Meyers, R. (1990) ‘Metatheoretische und methodologische Betrachtungen zur Theorie der internationalen Beziehungen’, in V. Rittberger (ed.), Theorien der Internationalen Beziehungen: Bestandsaufnahmen und Forschungsperspektiven. Opladen: Westdeutscher Verlag, 48–68. Moravcsik, A. (1998) The Choice for Europe: Social Purpose and State Power from Messina to Maastricht. Ithaca, NY: Cornell University Press. Moravcsik, A. (1999) ‘Is Something Rotten in the State of Denmark? Constructivism and European Integration’, Journal of European Public Policy, 6(5): 669–81. Pollack, M. (2001) ‘International Relations Theory and European Integration’, Journal of Common Market Studies, 39(2): 221–44. Puchala, D. (1971) ‘Of Blind Men, Elephants and International Integration’, Journal of Common Market Studies, 10(2): 267–84.

286 Markus Jachtenfuchs Risse, T. (2002) ‘Rationalism, Constructivism, and the Study of International Institutions: An Emerging Synthesis?’, in I. Katznelson and H. V. Milner (eds) Political Science: The State of the Discipline. New York: Norton. Risse, T., and Wiener, A. (1999) ‘“Something Rotten” and the Social Construction of Social Constructivisms: A Comment on Comments’, Journal of European Public Policy, 6(5): 775–82. Scharpf, F. W. (1997) Games Real Actors Play: Actor-Centered Institutionalism in Policy Research. Boulder, CO: Westview Press.

14 Enlarging the European Union Reflections on the challenge of analysis Helen Wallace

Introduction At last enlargement of the European Union (EU) has become a subject for theoretical reflection as well as for empirical commentary and advocacy arguments. Chapters in this book address the analysis of EU enlargement from a variety of theoretical standpoints and from a range of empirically based observations. This development in EU studies is both welcome and overdue. Among the contributions here we find a mixture of theoretical reflections, empirically grounded insights, methodological experiments, and endeavours to establish comparative frames of reference. All of these are welcome stimuli to the debate about EU enlargement – and yet the refinement of the questions that is their product leads in a way to yet more questions. In this final chapter four sets of further questions are identified, as a goad to those who follow. These sets of questions concern comparison, alternatives to EU integration, the vectors of integration, and issues of political consent.

Comparison The editors of this volume rightly advocate the cause of comparison. In particular they suggest that more theoretically and methodologically sophisticated analyses of EU enlargement might enable more comparison to be made with enlargement processes in other international organizations. In the other articles in the book we also find comparisons made with other waves of enlargement in EU history. I shall comment on both of these and add a third dimension of potential comparison, namely with enlarging – or dissolving – federations. Comparisons with other international organizations Schimmelfennig and Sedelmeier (ch. 1 this volume) encourage us to compare EU enlargement with that of other international organizations in Europe, especially the Council of Europe and the North Atlantic Treaty Organization (NATO). The rationale for these as comparators is assumed more than it is justified, although in one sense the justification is indeed self-evident. Here is the EU as one among

288 Helen Wallace several European organizations to which the countries of Central and Eastern Europe have sought accession. Comparison across these organizations is of course worthwhile, and indeed it is especially welcome to find the EU and NATO drawn into the same comparative frame, not least since the end of the Cold War was both the trigger for the enlargement conundrum and a decisive challenge to the postWorld War II settlement in Europe. However, the basis for even this obvious set of comparisons would benefit from further explication on two grounds. One is the distinction between single-issue organizations and multi-issue organizations. NATO is after all a single-issue organization in which a single criterion broadly speaking has to be satisfied, namely whether or not enlargement of the club helps or hinders its single chief purpose, the promotion of European defence and security. Of course reality is a little more complex, since there are several ways of defining this chief purpose, but nonetheless the core criterion stands in a pre-eminent position. Contrast NATO with the EU, which operates across a wide and growing range of issue areas, where both the incumbent members and the would-be members have a considerable variety of concerns to address in terms of both norms and interests. It is to be expected that decisions about EU enlargement would therefore be likely to involve a wide range of factors and thus need multivariate analysis. Hence explanations that veer towards stressing a single key variable seem intrinsically implausible. The second ground for giving further thought to how comparisons are made has to do with the distinction between ‘deep’ integration and ‘shallow’ integration. A key feature of the EU, which makes it different from most international organizations, including NATO and the Council of Europe, is that the EU process consists of an attempt to develop a deep form of integration, with polity-like features and extensive penetration of state sovereignty. Thus choices by both incumbents and candidates about enlargement and accession imply a consideration of how these might affect both the character of the EU and its polity ambitions and the residual autonomy of a member – or would-be member – state. Incidentally such a consideration involves complex speculation about possible future evolutions and not only judgements about already established features of the EU. In the light of these observations some further thought could usefully be given to alternative comparisons. Thus, for example, perhaps the EU case could be compared with the North Atlantic Free Trade Area, where enlargement is also an issue, to the extent that this might be judged a form of multi-issue integration, even in the eyes of some an attempt at deep integration. Examples of shallow and singleissue organizations are easier to find, although perhaps somewhat less interesting. Comparison over time It is a welcome feature of this volume that it includes several attempts to compare the current enlargement with previous phases of enlargement. In practice in this collection this line of comparison is mostly limited to setting the enlargement towards Central and Eastern Europe against the most recent prior phase of

Enlarging the EU: reflections 289 enlargement to include members from the European Free Trade Association (EFTA). The authors tend to make strong contrasts between these two experiences of enlargement. The reasons for this perhaps need to be stressed more explicitly. After all the EFTA accedents to the EU were well-established democracies with well-established market economies, albeit with considerable variations among them. They were and are ‘mature’ democracies with well-established economic interests and well-established interest groups embedded in the political process. Thus, for example, it is hard to agree with the claim by Gstöhl (ch. 2 this volume) that fishing and farming were ‘marginal’ in importance in Norway, either economically or politically, especially given the extraordinarily important role of fish production in the Norwegian economy and its exports. For me at least, a much more fruitful set of comparisons can be made with the phase of Mediterranean enlargement, as Ruano (ch. 12 this volume) has argued pervasively. This earlier phase of incorporating three countries escaping from forms of political autocracy and economic underdevelopment seem more apposite for sustained comparison with the current enlargement towards Central and Eastern Europe. In addition there is now a long enough experience of the impact of enlargement on Greece, Portugal and Spain to permit the generation of hypotheses about both ‘pre’- and ‘post’-accession impacts. A further issue here is how views and practice within the EU as regards enlargement might have altered as the EU itself has changed. Here again the theme of ‘deep’ integration is relevant, since one might expect EU attitudes towards enlargement to change as the intra-EU integration process evolves and extends into a wider range of policy sectors and societal domains. In this sense, as is widely recognized, the acquis communautaire is fluid rather than fixed, and hence an unstable basis for judging the credentials of candidates, just as it is an unstable basis from which candidates have been forced to judge the possible or probable implications of accession. In this context, perhaps, we should also bear in mind some of the consequences for previous ‘new members’ of finding that they had joined a club which altered after their accession. A persistent uncomfortableness with this feature of the EU has, after all, been a recurrent feature of British post-accession experience. Comparison with (con)federal experiences To the extent that the EU is engaged in deep integration and is accompanied by polity-building activities, it merits comparison with federal or confederal experiences of enlarging – or shrinking – membership. One or two interesting efforts have been made to compare EU enlargement with the experience of the United States in expanding the federation during the nineteenth century. Perhaps there is scope for examining at least a little the impact of the eastwards expansion of the Federal Republic of Germany since 1991, not least since this example has played some part in shaping German public opinion about EU enlargement. There are rather few examples of ‘successful’ federal enlargements. On the other hand there is quite a list of collapsed or weakened federations. It is ironic to

290 Helen Wallace note that in the 1960s (here personal recollection is compelling!) the two most frequently quoted examples of successful political and economic integration across diverse societal conditions were Lebanon and Yugoslavia. Both of these federations subsequently went through profound turmoil, and their remnants remain fractured and dispersed polities. The Soviet Union is another recent example, while the persistent tensions within the Russian Federation remain a potent example of the limits to integration. My point here is simply to plead for further reflection about the scope for comparison, both for intellectual analysis and because these examples of dissolving federal experiments almost certainly play a part in framing the mental maps of policy-makers and of public opinion.

Alternatives to EU integration It is common for discussion of the current phase of EU enlargement to suggest that there is little or no alternative for candidates, while there is an option for the EU of refusing enlargement. But perhaps this question also deserves further elucidation. Here and there in this volume there are suggestions that the articulation of alternatives might be rewarding. Alternatives for potential and actual candidates At least in abstract terms one can envisage several kinds of alternatives to EU membership for neighbouring European countries. One is to prefer a form of autonomy to the explicitly penetrated sovereignty that flows from EU integration. This was after all a key element in the consideration of the EU issue across the EFTA countries, as it had been in the UK. In all of these countries opinion was split at both elite and popular levels, and indeed there remains a spectrum of opinion on this issue across these countries. After all there have been two failed referenda in Norway on EU membership and one in Switzerland on membership of the shallower regime of the European Economic Area. As the democratic processes ‘mature’ across Central and Eastern Europe, one might expect more articulation of the apparent choice between a form of autonomy and EU integration. A different version of this might be to choose a ‘free-rider’ strategy. Thus some would argue that the politics of Norway and Switzerland have focused around an option of free-riding, in the knowledge that the integrated EU would nonetheless condition their environment in Europe and promote helpful outcomes in wider international settings. It would on the face of it be surprising if Central and Eastern Europe did not produce one or two free-riders. In theory at least there is an option for non-members of the EU to form alternative groupings. Here again comparison over time could be illuminating. Actually EFTA was a rather content-free alternative to the EC/EU, offering the symbolism of a counter-club, while producing very little in terms of collective goods. Most practitioners and commentators assume that EFTA-like groupings are unlikely to emerge in Central and Eastern Europe. Such initiatives as have

Enlarging the EU: reflections 291 been taken – for example, the Central European Free Trade Area (CEFTA) – have, however, borne sparse fruit. The case of Russia and its neighbourhood is a different case. Here then the analysis might be extended to efforts to explain why it is that alternatives to the EU seem to stand so small a chance of flourishing, even when the demands of membership are so much weaker than those required by the complex system of the EU, with its ‘hard’ rules and ‘hard’ law. Apart from these weak options, the alternative to EU membership is often portrayed as a kind of wilderness of exclusion, a scenario of weak voice and asymmetrical dependency. Indeed we can already observe that in Southeastern Europe several countries (some of them ‘stateless’ countries) are cast as protectorates of the EU rather than potential members – at least for the foreseeable future. Incidentally the surprise of Mattli and Plümper (ch. 3 this volume) at the failure of Macedonia to apply for EU membership, contrary to what their model would have predicted, is actually rather straightforward to understand against the backcloth of events in that country and its neighbouring territories over the past decade. It can furthermore be argued that the geopolitics and troublesome economics of postCold War Europe have revealed a range of countries around the peripheries of EU Europe at vastly lower levels of economic and political development than the plausible candidates which gained accession in 2004. Along the hard-to-draw boundary between plausible and less plausible EU candidates sit countries such as Romania, which have next to them examples of non-functioning and nonperforming countries, such as Moldova or Ukraine or Belarus. These troubled countries provide stark illustrations of failed modernization, suggesting that the quest for EU accession has to be partly understood as an attempt to tie the process of modernization to the transformation towards EU acceptability. One coda to this point is worth adding. The earlier phase of Mediterranean enlargement suggests that part of the crucial dynamics of accession to the EU was the forward linkage with domestic modernization and transformation. To the extent that EU enlargement is delayed and that some potential candidate countries succeed by themselves in sustaining domestic transformation, entry to the EU may emerge as politically less essential. Or at least we might expect some voices to become more sceptical about the salience of EU accession. Here Turkey is a more plausible example than the countries of Central and Eastern Europe. Alternatives to enlargement for existing EU members The various authors in this collection make a number of different claims as to the motives of EU policy-makers for accepting EU enlargement, ranging from the promotion of particular norms to the pursuit of specific interests and the projection of power across the continent. These points are all of course important and deserve exploration, but they also need to be assessed against plausible alternatives to enlargement. Thus, to take one illustration, some German economic interests stand to gain from bringing Central and Eastern European countries ‘inside the tent’, to use one entrepreneur’s phrase, while other German economic interests stand potentially to lose from the weakened scope for lower cost outward

292 Helen Wallace processing. Just this one broad example demonstrates the need for fine-grained analysis to avoid compressed simplification, as, for example, when Mattli and Plümper (ch. 3 this volume) suggest that British economic interests stand particularly to gain from eastern enlargement, a surprising comment about a country which has one of lowest levels of economic exposure in this part of Europe. One way of thinking about the question of alternatives for current EU members is as a choice between having unpredictable partners inside the club and the prospect of awkward dependents beyond the boundary of the club. Tempting though it might sometimes have seemed to freeze the membership at the status quo ante 2004, in practice this seemed not actually to be an alternative, not least since the map of Europe cannot in this sense actually be reinvented. And would those neighbouring countries be likely to be more disciplined and more amenable inside or outside? This question can be played across both norm-based and interestbased explanations of EU integration and EU policies. Behind and beyond the question, whether one comes at it from the norms or from the interests, is the problem of uncertainty. In other words, EU policy-makers can at best make only informed guesses about the possible impacts of enlargement, more or less guided by more or less firm preferences. Indeed one of the striking features of EU enlargement policy is that the day-to-day handling of both assistance programmes and accession negotiations seems to be based on such consistent certainty about EU arguments and practice, while the broader reflections about the macroimplications of enlargement – or non-enlargement – seem to be based on flimsy speculation and uncertain, even contradictory, propositions. Witness here the continuing lack of agreement about what reforms need to be made to the EU to handle the impacts of enlargement on the EU itself.

Vectors of integration A persistent conundrum in the study of European integration is the difficulty of evaluating the relative weight of political and economic factors in propelling, or inhibiting, integration. In this volume the explanations of policy in Western Europe, both within the EU and in the EFTA countries, include some mixture of both economic and political factors, whether to do with norms or to do with interests. In contrast, the accounts included here give much more weight to political than to economic factors in the characterization of Central and Eastern European policies. Perhaps this is a sustainable argument, but surely then it needs to be addressed more explicitly. Thus in further analytical reflections it would be valuable to approach the debate in a more systematically comparative way, namely by examining both economic and political factors across both incumbent and candidate countries. Hence more attention should be given to the weight of economic interests in Central and Eastern Europe, especially now that over a decade has passed since marketization began to be implanted, and as economic actors have started to acquire some visibility and influence in the domestic political processes of the countries concerned. Many specialists on the region would also interpose that there are very

Enlarging the EU: reflections 293 particular features of the socio-political legacies in a part of Europe where the ‘nation-state’ has not been the predominant form of political organization. Hence how integration serves or inhibits efforts to find an appropriate and successful model of state-building may be a crucial concern. Moreover this concern is somewhat different in kind from the challenge faced in the early years of Western European integration, where the rebuilding of the state was also relevant, but where the experience has been of integration proceeding gradually among states that had rather firm and in most cases increasingly self-confident identities. In Western Europe the debate continues over whether EU integration has ‘rescued’ the state or undermined it. It is surely time to begin a period of reflection of whether and how this debate should be understood against the rather different histories of Central and Eastern Europe.

Issues of political consent Whatever the challenge of explaining policy-makers’ priorities and preferences in both existing and candidate (or would-be candidate) countries, we are faced with the further challenge of comprehending the evolution of public opinion across this same range of countries. We know three things about Western European public opinion. First, in all EU member states there is a spectrum of favourable and unfavourable opinion towards the integration project as such (albeit with considerable variation among countries). Second, we know that Western European electorates seem to be increasingly hard to mobilize around the core issues of EU integration, as declining turnout in European Parliament elections shows, and as the first negative Irish referendum on the Treaty of Nice seemed to demonstrate rather clearly. Third, by and large Western European electorates seem at best unenthused by enlargement, even hostile, although again with significant variations across countries. In these circumstances we should surely expect to find variations both within countries and between countries in Central and Eastern Europe as well. And indeed this seemed to be the emerging evidence of public opinion polling in the region. Although in the actual tests of electoral opinion the then candidate countries all produced positive endorsements of EU accession, many did so on low turnouts. Schimmelfennig and Sedelmeier plead in their introduction to this volume for a sustained effort to locate the analysis of EU enlargement within the mainstream of international relations theorizing. Let me complement their plea by a call for a similar effort to locate the study of enlargement and its domestic political ingredients in the field of comparative politics. Whether the predominant explanations of critical factors is drawn from interest-based explanations or from reasoning about the articulation of norms, there is much room for further crosscountry evidence-gathering and interpretative analysis. This would have the merit of forcing us to pay much more attention to a range of variables that might be relevant to explanations of public and electoral opinion. It could provide much firmer evidence with which to confirm or to rebut claims that opinion formation in Central and Eastern Europe follows different patterns from those in Western

294 Helen Wallace Europe. Moreover, beyond the intellectual arena studies of this kind could have considerable resonance in a context where many of the policy practitioners engaged in the enlargement process – in both incumbent and candidate countries – seem curiously ill-equipped to judge how policy practice affects public opinion formation.

Conclusion This welcome volume will be a valuable addition to the literature on EU enlargement. It would be an excellent consequence of this endeavour if it were to prompt others to address some of the questions on which the authors here touch only the tips of the icebergs. Indeed it would also be an excellent consequence if it were to provoke a wave of serious argument between contending approaches, in order still further to sharpen up the analysis of this very important contemporary issue.

Index

accession 8, 175; criteria see Copenhagen Criteria; negotiations 165 acquis communautaire 59, 88, 100–1, 110, 112, 152, 161, 201–2, 258, 261, 265, 268, 289 ‘Agenda 2000’ see Commission alliances 239, 241, 244–6, 254 Amsterdam Treaty see European Union Andriessen, Frans 150, 162, 164, 240 application for membership 53, 60, 174 appropriateness, logic of 10, 130–1, 151, 157; see also social constructivism arguing see persuasion association 8, 142, 150, 223, 239; agreement see European Agreement asymmetry 21, 24, 149, 199, 201, 239; see also bargaining, power Austria 18–19, 35, 75, 77, 81, 82–4, 90, 110–11, 144–5, 200–1, 283 Austrian Federation of Industrialists (VÖI) 82, 85 Austrian Freedom Party (FPÖ) 83 Austrian Green Party (GA) 83, 90 Austrian People’s Party (ÖVP) 82, 83 Azerbaijan 70 Balkans 3, 221, 224–5; see also BosniaHerzegovina; Croatia; Kosovo; Macedonia; Slovenia; Stability Pact; Yugoslavia Balladur, Edouard 149, 222–3, 231 Baltic countries 113, 145; see also Estonia; Latvia; Lithuania bargaining 16, 120, 154, 166, 200–1, 206; power 14, 21, 143, 148–9, 154, 199, 203, 238, 267, 269; see also rationalism Belarus 52, 291 Belgium 131, 136, 144, 147, 163, 205 Bildt, Carl 42

Bosnia-Herzegovina 221, 222 Brittan, Leon 162, 240, 250 Bulgaria 3, 55, 145, 149, 153, 160, 162, 207, 218, 226 CAP (Common Agricultural Policy) 34, 146, 149, 203, 205, 208–9, 217, 223, 226, 229, 258–60, 264, 267–8, 271–2, 274 Caribbean 267 Carrington, Lord 106 CEFTA (Central European Free Trade Association) 291 Chirac, Jacques 222–3, 231 civilization 173, 178, 181, 192; see also Huntington, Samuel Clinton, William 113 club theory see international organizations Cold War 114, 222; during the 100, 103, 106, 115, 122, 158 (see also East–West conflict); end of 3, 4, 18, 23, 38–9, 42, 45, 75, 86, 90, 99, 101, 104, 109–14, 159, 288, 291 COMECON (Council for Mutual Economic Assistance) 55, 56 Commission, European 3, 15, 23, 59, 88–9, 122, 130, 144, 162–5, 201, 208–9, 217, 230, 242–3, 250, 260–6, 271, 273; ‘Agenda 2000’ 128, 150, 165, 224, 260, 263, 271; DG Agriculture 269, 270, 272–4; DG Enlargement 241; DG External Relations 126, 127, 129, 241; White Paper 88, 133, 150, 248 Common Foreign and Security Policy (CFSP) 76, 152, 223 Commonwealth 271 Communism 60, 91, 107, 158, 203; see also Soviet Union community 15, 104, 142, 158–9, 172–3, 192, 194, 229

296

Index

constructivism see social constructivism cooperation agreements 52 Copenhagen Criteria 88, 150, 160, 165, 201, 223–5, 229; see also European Council COREPER (Committee of Permanent Representatives) 243, 266, 271 cost/benefits of accession 12–13, 19, 21–2, 54, 56–7, 59, 61, 70, 101, 130, 132, 136, 143, 145, 147, 174, 198, 203–4, 214 Council of Europe 22, 158, 172–4, 179, 181, 186, 192–4, 287–8 Croatia 3, 75, 207 CSCE (Conference on Security and Cooperation in Europe) 22, 99; see also OSCE culture 20, 53, 178, 192, 194 customs union 56 Cyprus 3, 75, 147 Czech Republic 56, 113, 262; economic data 59, 87 Czechoslovakia 106, 161–2, 164, 218, 226; see also Czech Republic; Slovakia DeClerq, Willy 162 de Gaulle, Charles 260, 282 Delors, Jacques 120, 162, 217 Denmark 21, 34–5, 41–2, 44, 48, 130, 134, 144–5, 165, 200, 204, 217 Dini, Lamberto 166 Dooge Committee Report 124 East–West conflict 38, 46, 160; see also Cold War EBRD (European Bank for Reconstruction and Development) 55 economies of scale 35–6 EFTA (European Free Trade Area) 33–6, 76, 289–90, 292; enlargement 3, 4, 16– 20, 24, 38, 75, 77, 81–5, 252 Ene, Constantine 160 England see Great Britain ENLABASE (Enlargement Database) 174 enlargement: definition of 4, 5–6, 59; dimensions of 6–9; impact of 6, 8; literature on 4–5 environmental policy 249–51 Erlander, Tage 42 Estonia 145 Europe Agreement 55, 125, 127–32, 165, 217–20, 223, 226–9, 238, 242–3, 247 European Central Bank 75 European Coal and Steel Community (ECSC) 35, 103, 158, 247

European Commission see Commission, European European Council 130, 209; Amsterdam (1997) 110, 133, 134–5, 150 (see also Amsterdam Treaty); Berlin (1999) 121, 128, 165, 263, 266; Brussels (2002) 266; Cannes (1994) 88, 248; Cologne (1999) 111, 128; Copenhagen: (1993) 52, 55, 109, 127–9, 132–4, 150, 152, 165, 213, 219–20, 223, 227, 229, 230, 243 (see also Copenhagen Criteria); (2002) 264; Edinburgh (1992) 129–32, 134, 165, 219; Essen (1994) 128, 133–4, 165, 243; Fontainebleau 266, 268; Helsinki (1999) 213, 225; Lisbon (1992) 129–30, 150, 162, 165, 219; Luxembourg (1997) 120, 127–8, 224–5; Madrid (1995) 128, 133–4, 150; Rhodes (1988) 124; Rome (1990) 124, Strasbourg (1989) 124; Stuttgart (1983) 262, 266 European Economic Area (EEA) 5, 19, 33, 290 European Investment Bank (EIB) 55, 59 European Monetary Union (EMU) 4, 5, 75, 152, 208, 209 European Parliament 14, 112, 162, 224, 272, 280, 293; Ostlander Report 112 European Political Cooperation (EPC) 242 European Union (EU): Amsterdam Treaty 109, 128, 163, 165; budget 3, 121, 146, 149, 208, 266; enlargement see enlargement; as a hegemonic project 19, 80, 83, 85, 86, 90; Nice Treaty 121, 293; Single European Act 4, 75, 99, 109, 206, 207; treaty on (Maastricht Treaty) 75, 76, 99, 102, 109, 123, 132, 134, 149, 152, 163, 207 Europeanization see theories of regional integration event history analysis 172, 175–6 Finland 19, 35, 41, 75, 144, 145, 200 fisheries 35, 47, 78, 289 foreign direct investment (FDI) 59, 81, 84, 89, 202 France 39, 57, 103, 131, 144–7, 149, 163–4, 200, 206, 208, 215–18, 222–9, 260, 271; economic data 228 Freedom House dataset 152–3 GATT (General Agreement on Tariffs and Trade) 203 Georgia 160

Index Germany 21, 35, 38–9, 44, 52, 57, 103, 111, 128, 144–8, 162–4, 204, 205–8, 214–17, 218, 222, 226, 230–1, 243, 263, 289, 291; Ostpolitik 52 González, Felipe 131 Gorbachev, Michail 86 Great Britain 21, 35, 44, 48, 57, 111, 128, 130, 144–8, 163, 200, 204–9, 216–18, 226, 230, 258–64, 267, 271, 274, 290, 292 Great Depression 43 Greece 68, 123, 144–7, 153, 163, 200, 207, 289 Gross National Product (GNP) data 201, 203, 207, 223, 262 Haider, Jörg 83 Hallstein, Walter 123, 158 Haughey, Francis 124 Havel, Vaclav 163, 164 Heath, Edward 106, 266 Helsinki Final Act 103, 105–9 Hungary 56, 113, 160, 217–18, 226; economic data 59, 87 Huntington, Samuel 173–4, 178, 181; see also civilization Iceland 18, 33, 35 identification 15 identity 34, 46, 130, 135, 162, 172, 229; definition of 40, 125–6, 151–2, 173; national see Norway, Sweden, Switzerland; European 22, 100–1, 107–9, 112, 114, 122–7, 132, 143, 151, 154, 159–60; as a theoretical concept 9, 16, 23–4, 39, 58, 101, 115, 173 IGC (Intergovernmental Conference) see European Council, Amsterdam Iliescu, Ion 163 IMF (International Monetary Fund) 88 immigration 54, 55, 148, 217 institutionalism 4, 9, 13, 15, 24 institutionalization 5, 53, 71, 174 interdependence 144, 148, 200 interest groups 61–4, 71, 77, 238–9, 252, 254, 271 international organizations: as clubs 11–14, 24, 162–3, 288; see also COMECON; Council of Europe; CEFTA; CSCE; EBRD; EFTA; European Union; GATT; IMF; NAFTA; NATO; OECD; OSCE; United Nations; Warsaw Pact; WTO

297

Ireland 34, 121, 124, 144–7, 200, 207; referendum in 208, 293 Italy 144–7, 149, 163, 165, 205, 217, 261 Jeszenczky, Geza 160 Kazakhstan 70 Kinkel, Klaus 52, 162 Klima, Viktor 111 Kodolanyi, Janos 161 Kohl, Helmut 222, 231 Kosovo 21, 214, 224–5, 230 Latvia 67, 153, 262 Lebanon 290 Liechtenstein 33, 35 Lithuania 153, 262 Lund, Gunnar 166 Luxembourg 131, 136, 144, 147 Luxembourg group 120, 128, 142, 150, 152–3, 205, 214, 226, 228; see also Cyprus; Czech Republic; Estonia; Hungary; Poland; Slovenia Maastricht Treaty see European Union Macedonia 68, 207, 291 Macmillan, Harold 34 MacSharry reforms 259, 260, 268, 270 Malta 3, 75 Mansholt Plan 259 Marshall Plan 114, 207 Mečiar, Vladimir 163 Mediterranean 33, 75, 147, 205, 207, 223, 259, 262, 268, 289, 291 membership application see application for membership Mexico 8, 201 Militarized Interstate Disputes dataset (MIDS) 178, 180, 186, 192, 194 Mitterrand, François 149, 158, 164, 221–2, 231 Moldova 291 multinational corporations (MNCs) 56–7, 76–8, 81, 84–5, 89 NAFTA (North Atlantic Free Trade Area) 8, 288 NATO (North Atlantic Treaty Organization) 22, 35, 41, 75, 99–106, 112, 172–4, 179, 180–1, 186, 189, 191–4, 222, 230, 287; Brussels summit (1994) 113; Partnership for Peace (PfP) 113 Netherlands 144, 147, 200, 205, 263

298

Index

neutrality 18, 35, 39, 48, 75, 186, 192, 194; Norwegian 44; Swedish 38, 41; Swiss 38, 44–5, New Zealand 267 Nice Treaty see European Union non-alignment see neutrality non-tariff barriers 36, 247–9 Norway 18, 19, 33, 34, 41, 75, 77, 289, 290; economic data 37; identity 39–47; referendum in 44, 47 OECD 33 ontology 10, 151, 280–2; see also rationalism; social constructivism Oostlander Report see European Parliament OSCE (Organization for Security and Cooperation in Europe) 112, 172, 174, 178, 181 Ostpolitik see Germany Partnership for Peace (PfP) see NATO persuasion 16, 157, 254 Petersen, Niels Helveg 166 PHARE 55, 59, 88 Poland 56, 67, 87, 91, 100, 106, 113, 160, 207–8, 217–18, 226, 262–4, 271; economic data 59 Polity IV dataset 67–70, 176, 181, 186, 189, 192–4 Pompidou, Georges 266 Portugal 33, 36, 57, 121, 123, 144–9, 200, 207, 217–18, 289 Prodi, Romano 224 qualified majority voting (QMV) 12, 208 rationalism 4, 9–14, 20–1, 25, 39–40, 77, 90, 101, 121, 129–30, 137, 142, 153, 166, 213, 280–4; see also bargaining reforms 60–1, 121, 202 rhetorical action 23, 142, 154–66, 166, 225, 229–30 rhetorical entrapment 58, 131, 133, 142, 163–6, 204 Romania 3, 55, 145, 153, 160–3, 207, 218, 226, 291 Russia 41, 52, 67, 99, 112–13, 178; see also Soviet Union Scandinavia 18, 33 Schengen Agreement 5, 205, 208 Schmidt, Helmut 207 Schröder, Gerhard 111

Single European Act see European Union Sinowatz, Fred 83 Slovakia 113, 152, 153, 163 Slovenia 149, 230 social constructivism 4, 9, 14–16, 19–22, 25, 39–40, 53, 58, 100–3, 115, 121, 125, 136–7, 142, 151–4, 166, 173, 203–4, 213, 214, 229, 280–3; poststructuralism 281 Soviet Union 56, 75, 87, 100, 103, 104, 107, 115, 162, 218, 290; see also Communism Spain 57, 121, 123, 131, 144–7, 149, 161, 200, 207, 217, 218, 258–64, 271, 274, 289 Stability Pact 149 see also Balkans; Balladur Suchocka, Hanna 131 Sweden 18–19, 33–4, 42, 75, 77, 81, 84–5, 91, 144–5, 165, 200, 205, 263; economic data 37, 84; identity 39, 40–2, 46, 47; referendum in 78, 84 Swedish Social Democratic Party (SAP) 84 Swedish Trade Union Confederation 84, 85 Switzerland 5, 19, 33–4, 44–6, 290; economic data 37; identity 39–40, 46–7; referendum in 45 TACIS 55 Thatcher, Margaret 162, 164, 207, 231, 261 theories of regional integration 3–4, 77, 279–80, 284–5; liberal intergovernmentalism 4, 142, 144, 147, 154, 214, 225–9, 238, 244, 253, 279–80; Europeanization 3, 9, 15; neo-functionalism 3, 76, 279–80; neoGramscian 77–81; supranationalism 4; trans-actionalism 3 trade 54–9, 145, 149, 227, 238; liberalization 246–8, 252 transnational corporations (TNCs) see multinational corporations Treaty on the European Union see European Union Turkey 75, 163, 178, 291 Ugglas, Margaretha af 47 UK see Great Britain Ukraine 52, 291 unemployment 55 United Nations (UN) 55 USA 8, 104, 113, 124, 201, 231, 289 Uzbekistan 70

Index Van Ham, Peter 161 Van den Broek, Hans 164 Védrine, Hubert 164 Visegrád (countries) 113, 131; see also Czech Republic; Hungary; Poland; Slovakia Von Weizsäcker, Richard 161 Vranitzky, Franz 83 Walesa, Lech 164

299

Warsaw Pact 107 White Paper see Commission Wilson, Harold 206 World War II 35, 41, 44, 259, 288 WTO (World Trade Organization) 203, 263 Yeltsin, Boris 112 Yugoslavia 21, 68, 214, 219, 221–2, 224, 231, 290