You are on page 1of 39

Cambridge University Press International Organization Foundation

Negotiating the Single European Act: National Interests and Conventional Statecraft in the European Community Author(s): Andrew Moravcsik Source: International Organization, Vol. 45, No. 1 (Winter, 1991), pp. 19-56 Published by: The MIT Press Stable URL: http://www.jstor.org/stable/2706695 Accessed: 14/09/2010 06:31
Your use of the JSTOR archive indicates your acceptance of JSTOR's Terms and Conditions of Use, available at http://www.jstor.org/page/info/about/policies/terms.jsp. JSTOR's Terms and Conditions of Use provides, in part, that unless you have obtained prior permission, you may not download an entire issue of a journal or multiple copies of articles, and you may use content in the JSTOR archive only for your personal, non-commercial use. Please contact the publisher regarding any further use of this work. Publisher contact information may be obtained at http://www.jstor.org/action/showPublisher?publisherCode=uwisc and http://www.jstor.org/action/showPublisher?publisherCode=mitpress. Each copy of any part of a JSTOR transmission must contain the same copyright notice that appears on the screen or printed page of such transmission. JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of content in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new forms of scholarship. For more information about JSTOR, please contact support@jstor.org.

University of Wisconsin Press, The MIT Press, Cambridge University Press, International Organization Foundation are collaborating with JSTOR to digitize, preserve and extend access to International Organization.

http://www.jstor.org

theSingleEuropeanAct: Negotiating national interests and conventional in theEuropeanCommunity statecraft


Andrew Moravcsik

The EuropeanCommunity (EC) is experiencing its mostimportant period of reform sincethecompletion of theCommon Market in 1968.This new impulse towardEuropeanintegration-the of Europe,the "relaunching" French callit-was unexpected. Thelate1970s andearly1980s wereperiods of "Europessimism" and "Eurosclerosis," whenpoliticians andacademics alikelostfaith inEuropean institutions. Thecurrent is oneofoptimism period andinstitutional momentum. The sourceofthistransformation was theSingle European Act (SEA), a document approved by European headsofgovin 1986.1 ernment The SEA linksliberalization of the Europeanmarket withprocedural The first halfof thisreform reform. package,incorporating 279 proposals inthe1985EC Commission contained White Paper,aimsto create"an area without internal frontiers in whichthefreemovement of goods,persons,
For advice,encouragement, and comments on earlier I am indebted drafts, to Anne-Marie DavidDessler, Burley, James Caporaso, Geoffrey Garrett, Peter Ernst Gourevitch, Haas, Peter Hall, Stanley PeterKatzenstein, Hoffmann, Robert Keohane,Stephen Krasner, Julius Moravcsik, KalypsoNicolafdis, Joseph Nye,DianeOrentlicher, PaulPierson, Alec Stone,Helen ananonymous Wallace, FareedZakaria, andtheparticipants referee, incolloquiums atHarvard University, Stanford University, theUniversity ofChicago, and theUniversity ofCalifornia at San Diego. I am grateful to theEuropean Visitors' Community Program andtheCenter for European Harvard Studies, forfinancial University, and logistical support. An earlier, more thoroughly version of thisanalysis documented appeared as Working Paperno. 21, Harvard Center forEuropean University Studies, October Cambridge, Massachusetts, 1989. 1 The bestnegotiating oftheSEA, written history byan intelligent insider whotookcomprehensive notes,is JeanDe Ruyt's L'acte unique europeen: Commentaire(The SingleEuAct:Commentary) ropean (Bruxelles: Editions de l'Universite de Bruxelles, 1987).For other useful histories and commentaries, see PeterLudlow,Beyond 1992:Europeand Its Western Partners (Brussels: Center forEuropean PolicyStudies,1989);Michael The1992 Calingaert, D.C.: National ington, Planning Association, Volle,Grossbritannien 1988);and Angelika und
der europiiische Einigungsprozess ChallengefromEurope: Developmentof the European Community's InternalMarket (Wash(Great Britain and the process of European integration)

1989, see JochenThies and Wolfgang Wagner,eds., Auf dem Wege zum Binnenmarkt: Europaische Integration und deutscherFoderalismus (On the way to the internal market:European International Organization45, 1, Winter1991 ? 1991bytheWorld Peace Foundation and theMassachusetts Institute ofTechnology

(Bonn:Forschungsinstitut derDeutschen Gesellschaft fiir Auswairtige Politik, February 1989), of important pp. 46-76. For a collection German and documents articles between 1985and

20 International Organization To realizethisgoal, Europeanleaders and capitalis ensured."2 services, themselves to addressing issuesneversuccessfully tackled in a committed such as the comprehensive multinational forum, liberalization of tradein and theremoval of domestic thatact as nontariff services regulations barto setdetailed and uniform riers. Previous standards attempts European for had proventime-consuming domestic regulations ("harmonization") and theWhite fruitless. With thisin mind, Papercalledfora "new approach" lessinvasive ofliberalization basedon "mutual form recognition"-a whereby wouldbe harmonized. standards onlyminimal oftheSEA reform consists ofprocedural The secondhalf reforms package in thegoverning decisionmaking to streamline designed bodyof the EC, theCouncilofMinisters. SinceJanuary 1966,qualified majority voting had beenlimited inpractice inwhich bythe"Luxembourg compromise," France theright asserted to vetoa proposal in theCouncilofMinisters unilaterally that a "vital" or "veryimportant" interest was at stake.3 by declaring The intheCouncil SEA expands theuse ofqualified ofMinisters, majority voting to theinternal market.4 although onlyon matters pertaining forthetiming and thecontent ofthereform Whataccounts packagethat succeedwhenso many relaunched Europe?Whydid thisreform previous thesequestions, this had failed?As a first efforts steptowardanswering thatled to theapproval ofthe article a history ofthenegotiations presents formulates and evaluates SEA by theEuropeanCouncilin February 1986, thefindtheir for twostylized explanations unexpected success,andrelates ingsto theories ofinternational cooperation. the prominent view thatinstitutional reform reThe findings challenge andpan-European an elitealliance between EC officials business sulted from is moreconsistent withthealterinterest groups.The negotiating history

Fora pathfur Politik, 1989). federalism) (Bonn:Verlag Internationale integration andGerman to account fortheSEA, an account offered by twopolitical scientists and breaking attempt see Wayne Sandholtz and John Zysman, "1992: hypotheses, incorporating nearly all existing Politics 42 (October 1989),pp. 95-128.For an exBargain,"World Recasting theEuropean andprevious see RoyPryce, ofthe1992 ed., The negotiations negotiations, cellent comparison of 1992as a Dynamics of EuropeanUnion(London:CroomHelm,1987).On theprovisions economic see Kalypso Nicolaidis, "MutualRecognition: negotiation, newform ofmultilateral in Network Promethde Perspectives no. 10, Politics, The New Frontier of Multilateralism?" Paris,June1989, pp. 21-34. White bytheSEA. 2. Article Paper,as amended 8A ofthe1985EC Commission was announced which totheworld ina press 3. TheLuxembourg compromise, communique, as an attempt ithas beeninterpreted to circumvent has no legalstanding. Quitetheopposite, in Article ofRome. outlined 236oftheTreaty legalprocedures ofa few minor initiatives inclusion ofcollaborative research theexception 4. With (suchas the theSEA), other areas of European under integrationpotential and development programs further sociallegislation, reform, policy, procedural monetary including political cooperation, ofEC membership-are issuessuchas theenlargement subject andfundamental constitutional normajority thenewapproach to neither voting.

Act 21 SingleEuropean between restedon interstate thatEC reform bargains nativeexplanation Anessential was the for reform andGermany. precondition Britain, France, coalitions ofruling oftheeconomic party policyprescriptions convergence theelection of theBritish Conservative party in thesecountries following policyin 1983.Also esof FrenchSocialistparty in 1979and thereversal thatFranceand Germany gainedby sentialwas the negotiating leverage Britain a "two-track" Europeandexcluding ofcreating exploiting thethreat is moreconinstitutionalist" explanation from it. This "intergovernmental structural realist" withwhatRobertKeohane calls the "modified sistent of natraditional conceptions a viewthatstresses viewof regime change, thanit is withsupranational variants of neoand power,5 tionalinterests For thesourceof stateinterests, however, theory. functionalist integration domestic structural theories and toward polturn awayfrom scholars must invite further explanations of severalcompeting itics,wheretheexistence research. Explanationsforthe successof the SEA Journalistic academicanalysis,and interviews withEuropean reportage, widerange officials reveala bewilderingly ofexplanations, somecontradicPaperand theWhite content, and processofadopting tory, forthetiming, I interviewed "Whenthe theSEA. One French in Brussels quipped, official accounts The various claimspaternity!" little boyturns outwell,everyone thefirst cluster twosylized stressing theindependent explanations, around andthesecondemphasizing activism ortransnational actors ofinternational statesof Europe. leadersofthemostpowerful bargaining between
Supranational institutionalism

recur in accounts ofEC reform: consistently factors Threesupranational theParliament and Court;lobEC institutions, particularly pressure from and thepolitical businessinterest entrepregroups; bying by transnational led by President JacquesDelorsand Internal oftheCommission, neurship thesesupranational Cockfield.6 Market LordArthur Together Commissioner
5. See RobertKeohane, After Hegemony: Collaborationand Discord in the WorldPolitical Economy (Princeton,N.J.: Princeton University Press, 1984),pp. 61-64; and RobertKeohane, ed., Neo-Realism and Its Critics(New York: Columbia University Press, 1986), pp. 192-95. In After Hegemony,p. 63, Keohane writesthat"the conceptofinternational regimeis consistent withboth the importance of differential power and witha sophisticated view of self-interest." It is not, however, consistentwith a strongview of domestic politics as an independentdeterminant of interest. 6. These factors are stressed by Calingaert in The 1992 Challenge from Europe and by Sandholtzand Zysman in "1992." See also Axel Krause, "What After European Integration?" 2 (Autumn1988), pp. 46-55; and Peter Ludlow, "Beyond 1992," European European Affairs 2 (Autumn1988), pp. 19-21. Affairs

22 International Organization an accountof reform factors offer guidedby actorsand institutions acting "above" thenation-state. In the EuropeanParliament, within the EC institutions. resolutions and theprograms of twogroups, one "maximalist" reports supported and the in approach. The first other "minimalist" which included Italgroup, many iansand quitea number ofGermans, advocated federalism and a European inthescopeofEC activities, broadexpansion backedbyprocedural reforms thepoweroftheParliament.7 on increasing focusing particularly Following foranimalnames,theseactivists the Europarliamentary penchant called themselves the "CrocodileGroup,"after theStrasbourg restaurant where met.Led by thevenerable Altiero a founding father theyfirst of Spinelli, in theEuropeanParliament theEC, their efforts culminated resolution of 1984 a "Draft theEuropean February proposing Union"Treaty Establishing a new,moreambitious document to replacetheTreaty ofRome. The secondgroup, founded in 1981 andconsisting ofParliament members of federalism and parliamentary who were skeptical reform, focusedon with national leadersto liberalize theinternal working market. Theseactivistscalledthemselves the"KangarooGroup,"basedon theAustralian marto "hop overborders."Theirefforts supial'sability werefunded by symbusiness interests pathetic British and Dutch),and they (primarily counted Basil de Ferranti, a leadingBritish industrialist and Toryparliamentarian, their leaders.8 The Kangaroos among encouraged studies parliamentary on economic andin 1983 a public launched infavor topics ofa detailed campaign EC timetable forabolishing administrative, technical, and fiscal barriers, a reference in thedraft to which was included treaty. executive officer ofPhilips, in the1950swas initiated European integration whilein itscurrent "industrial" by politicians, phaseitis initiated by busiThe evidencepresented ness leaders.9 to date by partisans of thisview the actionsof pan-European stresses businessinterest groups.The Commission has long sought the development to encourage of a sortof pannetwork thesegroups European corporatist bygranting access to privileged thepolicyprocess,though thiseffort has metwith little success.'0
7. Forstrong claims about theimportance ofthis ininspiring group reform, see Marina Gazzo, "Introduction," in Marina Gazzo, ed., Towards EuropeanUnion (Brussels: AgenceEurope, 1985),vol. 1, pp. 7-10. The advent of direct elections to theEuropean Parliament in 1979, whichendowedthebodywithdemocratic legitimacy, gave theactivities of thegroupnew impetus.

European institutions. Between 1980 and 1985,pressureforreform grew

Transnationalbusiness interest groups. Accordingto Wisse Dekker, chief

8. See Michel Albertand James Ball, Toward European Economic Recovery in the 1980s: Report to the European Parliament(New York: Praeger, 1984).

9. Speechby WisseDekker, Geneva,25 October 1988. 10.Philippe andWolfgang Schmitter Streeck, Interests "Organized andtheEurope of 1992," to theAmerican paperpresented Enterprise Institute, Washington, D.C., 6-8 March1990.

SingleEuropean Act 23 In themid-1980s, business interest at times groups, working together with EC officials, hopedto bolsterthe competitiveness of Europeanfirms by for a more calling liberal EC market. Viscount Etienne theinternal Davignon, market commissioner from 1976through 1984,brought together a group of largeEuropeaninformation in 1981to form technology firms the ThornDavignon Commission, which for developed proposals technology programs and Europeantechnical norms and reportedly also discussedmarket liberIn 1983, PehrGyllenhammer, alization. thechief executive ofVolvo, officer and WisseDekker theRoundtable found ofEuropean helped Industrialists, made up of the heads of a number of Europe's largest multinational corsomeof whomwereselectedon Davignon'ssuggestion.11 porations, Once theSEA was adopted, theRoundtable formed a "watchdog" committee to In February press for itsimplementation. theUnion 1984, desConf6derations de l'Industrie et des Employeurs d'Europe (UNICE), the leadingEC industrial interest and it has been active group,called formajority voting, sincethenin promoting market liberalization.'2 in theautumn In a seriesof speechesdelivered of 1984and early1985, Dekkerproposedwhatbecame the best-known businessplan formarket the "Europa 1990" plan.'3Its focuson internal liberalization, market libits division eralization, of the taskintocategories (reform of fiscal, comand government mercial, technical, of procurement policies),its ideology economies of thelinkbetween of scale, itsrecognition liberalcommercial its identification ization of theultimate and tax harmonization, goal witha ofitsother certain details wereechoedin Delors' proposal date,and many to theEuropeanParliament a fewmonths laterand in theWhite Paperof June1985.Transnational business somehaveargued, was "indispressure, pensable"to thepassageof theSEA.'4 armof theEC. WhenDelorswas nominated viewedas theagenda-setting of theCommission, he immediately a majoriniforthepresidency sought theEC. Whenhe assumedtheoffice in January tiative to rejuvenate 1985,
11. Sandholtz and Zysman, "1992," p. 117. 12. For a discussion oftheroleofbusiness, see Lawrence G. Franko, "Europe 1992:The Impacton GlobalCorporate and Multinational Strategy Corporate Strategy," mimeograph, University of Massachusetts, Boston,September 1989;Sandholtz and Zysman, "1992," pp. 108and 116-20;FinancialTimes, 14 February 1984;Axel Krause,"ManyGroups Lobbyon Implementation of Market Plan," EuropeMagazine,July-August 1988,pp. 24-25; Ludlow,

Internationalpolitical leaders. The Commission has traditionally been

Beyond 1992,pp. 27-30; Calingaert,The 1992 ChallengefromEurope, p. 8; and Helen Wallace, 13. For Dekker's proposals, see Europe 1990: An Agenda for Action (Eindhoven: N.V.

inthe "Making Multilateralism Work: Negotiations European Chatham Community," mimeograph, House, London, August 1988, p. 7.

Philips, 1984). Thefour oftheDekker aspects planwereadministrative simplification ofborder ofthevalue-added harmonization tax(VAT), standardization formalities, oftechnical norms, and liberalization of government Dekkeroutlined thenew roleof business in procurement. and Perspectives," a speechdelivered "Europe's EconomicPower:Potential to the Swiss Institute forInternational Studies, Geneva,25 October 1988. 14. See Sandholtz and Zysman, "1992," p. 128.

24 International Organization and laborleadersin each oftheEuropean he visited government, business, reforms. todiscusspossible tohisaccount, he considered capitals According reform inthree areas-the EC decision-making institutions, European monetarypolicy,and political and defensecollaboration-before deciding to ''return to the origins"of the EC, the construction of a singleinternal market.'5 Like JeanMonnet twodecadesbefore, Delorsidentified thegoal with a date.He aimedto render theachievement oftheprogram irreversible it by 1992,coeval with theduration by 1988and to complete of twofourIt is commonly yearterms of commissioners. thatDelorsused the argued institutional as a platform from which to forge the powerofthepresidency linkbetween theprocedural improvements proposed byParliament and the internal market liberalization advocated business byBrussels-based groups. to thisview,he encouraged Cockfield to elaborate theinternal According market thesense of ecoagendain theWhite Paperand thenexaggerated of European nomic declineto securetheapproval headsofgovernment.'6
and neofunctionalism Supranational institutionalism

witha certain This explanation is consistent variant of neofunctionalist In The Uniting theory. of Europe,ErnstHaas distinguishes between processes of integration thattakeplace at whathe calledthe"supranational" and "national"levels.Threekeyelements ofthesupranational processare theability in sucha wayas ofa central institution (theEC) "to assertitself thetendency tocause strong ornegative positive expectations," of"business
15.Jacques Delorset al., La Francepar l'Europe(Francethrough Europe)(Paris:Bernard Grasset, as theopening 1988), pp. 47 and 50-51.The toneis heroic, words ofthechapter on Delors' initiative (p. 47) illustrate: "January 1985:thewinter was harsh.In Brussels, as in Paris,peoplewereshivering. On thetopfloor of theBerlaymont, in a vastoffice that didn't Delorsgathered hisclosestassociates yetseemquitelivedin,Jacques around him." and Zysman, 16. Sandholtz "1992," p. 98. 17. Ibid., pp. 96-97; see also pp. 100,108-9,and 128fora discussion of thekeyroleof and Zysman supranational actors.Sandholtz criticize buttheir neofunctionalism, description is infact oftheintegration with process compatible neofunctionalism inallbuta few particulars. For other supranational interpretations, see Ludlow, Beyond 1992,pp. 27-30;Calingaert, The 1992Challenge from Europe;and HelenWallace,"Europaische inIntegration" (European in Thiesand Wagner, tegration), AufdemWegezumBinnenmarkt, pp. 127-28.

ership for 1992 came fromoutside the national settings.... theCommission.'I17

An elitealliancebetween transnationally organized bigbusinessgroups and EC officials, led by Delors,constitutes thecore of the supranational institutionalist forthe 1992initiative. The explanation is theoexplanation inthat each ofitselements coherent theautonomy retically emphasizes and influence institutions andtransnational enjoyed byinternational groups acthave recently scholars ing"above thestate." Two leading thatthe argued actorsdecisively thepolitics keyroleplayedby supranational distinguishes thoseoftheTreaty oftheSEA from ofRomethree decadesearlier: "LeadIt came from

Act 25 SingleEuropean to confines in an effort their former national beyond and labor. .. to unite supranaby a resourceful policy,"and the"demonstration makecommon without tionalexecutivethatends alreadyagreedto cannotbe attained actors An examination oftheroleof supranational steps."18 further united though variant ofneofunctionalism, this particular ininitiating theSEA tests model. not,ofcourse,theentire
institutionalism Intergovernmental

the success of the 1992initiative approachto explaining An alternative between heads of government in the three focuseson interstate bargains which can be called "instatesof theEC. This approach, largest member ofpower stresses thecentral importance institutionalism,"''9 tergovernmental in theinternot simply dictated by position withthe latter and interests, is based institutionalism national (see Table 1). Intergovernmental system lowest-common-denominator on threeprinciples: intergovernmentalism, transfers of sovereignty. and strict limits on future bargaining, the EC has been based on Fromits inception, Intergovernmentalism. itsleading states. Heads ofgovernment, between member interstate bargains initiate and negotiate and advisers, backedby a smallgroupof ministers or theEuropean Council.Each initiatives in theCouncilofMinisters major thelens of its own policypreferences; viewsthe EC through government means.20 Even is thecontinuation ofdomestic byother EC politics policies theprincipal political form oftheir whensocietal interests aretransnational, remains national. expression universal incentives orthreats topromote regime mon"capableofproviding the and logrolling, the widespread use of linkages and without formation the relative of the member intheEC reflect struck powerpositions bargains with butlarger states off states.Smallstatescan be bought side-payments, in thescope or rulesof exercisea de factovetooverfundamental changes remains economic liberalization. Thus, of theEC, which thecore element
ofEurope: Political, Social and Economic Forces, 1950-1957 18. ErnstB. Haas, The Uniting (London: Stevens & Sons, 1958), pp. xiii-xiv; see also pp. 389 and 483-84 and chaps. 8-12, influenceof an active supranationalexecutive and of in which Haas stressed the federating groups. Haas and Schmittersubsequentlystressed "creative personal action" transnational using organizationalresources and skills, as seen, for example, when a centralintegrationist and package deals. See ErnstB. Haas and PhilippeSchmitleader is able to promotetrade-offs International Organization Patternsof PoliticalIntegration," ter,"Economics and Differential 18 (Autumn1964), pp. 736-37. This idea was picked up by latertheorists.See JosephS. Nye, Jr., Peace in Parts: Integrationand Conflictin InternationalOrganization (Boston: Little, Brown, 1971), pp. 69 and 71-72. thisrubric. to Anne-MarieBurleyfor suggesting 19. I am grateful see Paul Taylor, The Limitsof on intergovernmentalism, 20. For summariesof the literature European Integration(Beckenham, U.K.: Croom Helm, 1983); and Helen Wallace, William in theEuropean Communities (London: Wiley, Wallace, and Carole Webb, eds., Policy-Making 1977).

Lowest-common-denominator bargaining. Withouta "European hege-

26 International Organization
TABLE 1. Comparison of two approaches to explainingthe success of the 1992 initiative

Parameter initiKey actors ating thenegotiations and compromises

Supranational institutionalism Transnational interest and supranational groups officials

Intergovernmental institutionalism Heads ofgovernment and topofficialsofthelargest member with states, specific policy goals determined domestic bytheir political andbytheprefersystem encesofpolicymakers, technoand crats, political parties, interest groups Lowest-common-denominator (vetogroup) decisions the among member largest with states, smaller states receiving side-payments and larger states subject to threats ofexclusion issue-areas that are subject Rigid to change onlybyfuirther interstateagreement under theunanimity rule

ofthe Nature bargaining

and linkages that Logrolling thecommon interupgrade est ofmember states

Nature ofthe agreement

and spillFluidissue-areas over

tendsto converge toward the lowestcommon bargaining denominator of largestateinterests. The bargains consisted initially ofbilateral agreements betweenFranceand Germany; now theyconsistof trilateral agreements including Britain.2' The onlytoolthat can impel a state to acceptan outcome on a major issue thatit does notprefer to thestatus quo is thethreat ofexclusion. Once an international institution has been created, exclusion can be expensive both becausethenonmember forfeits input intofurther decisionmaking and because itforgoes whatever Iftwomajor benefits result. statescan isolatethe third andcredibly threaten itwith exclusion andifsuchexclusion undermines thesubstantive interests oftheexcluded thecoercive state, threat maybring aboutan agreement at a levelof integration above thelowestcommon denominator. Protection of sovereignty. The decisionto join a regime involves some sacrifice of national in exchange sovereignty forcertain advantages. PoliBritain, Franceand Germany U.K.: Gower,1986), (Aldershot, pp. 156-74.
munity,"in Roger Morgan and Caroline Bray, eds., Partnersand Rivals in Western Europe:

21. HelenWallace,"Bilateral, Trilateral andMultilateral Negotiations intheEuropean Com-

Act 27 SingleEuropean erosion ofsovereignty thefuture against countries their safeguard cymakers to sovereigntymembers of regime consent theunanimous by demanding to central authority open-ended Theyalso avoid granting reforms. related insteadto preferring on theirsovereignty, infringe thatmight institutions suchas theCouncilof Minisinstitutions intergovernmental workthrough and bodiessuchas theCommission supranational thanthrough ters,rather Parliament.
and modified institutionalism Intergovernmental realism structural

on furand constraints interstate bargains, interests, national Convergent for explanation institutionalist theintergovernmental ther reform constitute the in thatit stresses coherent is theoretically the SEA. This explanation institutions international leaders vis-a-vis ofnational andinfluence autonomy theoutcomes in determining of powerresources as wellas theimportance bargains. ofintergovernmental ofwhat affirms foundations therealist institutionalism Intergovernmental forrealist"explanation of regime structural Keohanecalls the "modified intheinternational actors Statesaretheprincipal mation andmaintenance.22 power. and relative reflect nationalinterests bargains system.Interstate framea common byproviding politics shapeinterstate regimes International intercostsofinterstate and transaction workthatreducestheuncertainty have preserved Keohaneargues,regimes system, actions.In the postwar declineoftheUnited after therelative of cooperation established patterns normaintained neither created by theEC regime, though States.Similarly, choose until themajor European powers interstate fixes bargains a hegemon, changes. to negotiate from differs decisively institutionalism ofintergovernmental Theemphasis in thatit locatesthesources structural however, realism, thatof modified butalso in the notonlyinthechanging powerdistribution reform ofregime are entities ofstates.Statesare not"black boxes"; they interests changing are responsible to domestic whichthemselves to governments, entrusted in ways whichare changeovertime,often Stateinterests constituencies. in to shifts be traced cannot decisivefortheintegration processbutwhich therelative powerof states. and 1992 Nationalinterests thatan analysisof the 1992iniapproachsuggests The intergovernmental of Germany, the underlying preferences mustbeginby examining tiative issue-areas four As indicated above, Delorsidentified France,and Britain.
pp. 192-95.
22. See Keohane, AfterHegemony, pp. 61-64; and Keohane, Neo-Realism and Its Critics,

28 International Organization
TABLE

2. Preferencesof the threelargestEC memberstates, 1980-86


France

Reform

Germany

Britain

Strengthening mon- Opposed,at least etary coordination until flows capital are liberalized Strengthening political and defense cooperation Opposed;advocatescodifying current cooperation In favor ofrevising thetreaty to Parliastrengthen ment's role;opposedto the comLuxembourg infavor promise; ofmore majority voting

In favor; advocates a toward moving central European bank In favor ofcreating of theposition SecretariatGeneral; opposed to extending defense cooperation

Opposed;is nota in the participant EMS Opposed;advocatescodifying current cooperation

Instituting procedural reform in EC decisioninstitutions making

In favor ofrevising Opposedto revising thetreaty or draft- thetreaty; in favor oftheLuxemto inga newtreaty allowfor"varibourg compromise able geometry" butadvocates inafter programs; formal efforts to facilitate more ma1984, opposedto Parstrengthening jority voting liament's role,opposedto the comLuxembourg andin promise, favor ofmoremajority voting In favor in principle,butonlyif budgetary issues are resolved prior to liberalization

theinLiberalizing ternal market

In favor in principle Opposedat first; after in1983, in favor creasingly

thatmight have servedas thevehicleformajorEC reform: monetary coand defense ordination, political cooperation, institutional reform, and internal A glance atthenational liberalization. market preferences for monetary and forpolitical and defense coordination thatthere cooperation suggests ofa formal was little sincein bothcases Francewas possibility agreement, and Germany in the reform opposedby Britain (see Table 2). Procedural EC decision-making institutions and liberalization of the internal market offered and laterbecame the two components morepromise of the 1992 initiative.
Germany:consistentsupport

thethree member statesoftheEC, Germany Among has enjoyed largest sincethelate 1950stheleastpartisan to further opposition Europeaninte-

Act 29 SingleEuropean on theEC fornearly half gration. As Europe'sleading exporter, dependent from economicintegration. its exports, Germany profits directly German leaderof the Free Democrats, Minister Hans-Dietrich Foreign Genscher, of Europeanpolitical has also been a strong supporter cooperation, which he viewsas a vitalcomplement to Ostpolitik.23 Moreover, a greater rolefor theEuropean Parliament is widely viewed as a desirable steptoward political union.24 On theother hand,in themid-1980s, was suspicious Germany of was ambivalent aboutalproposals fora Europeandefense organization, tering theagricultural policyso it wouldpay moreor receiveless, and was at least untilcapitalflowswere opposedto further monetary integration,
liberalized.25

France: the road to Damascus

all but Although traditionally pro-European, the FrenchSocialistparty fewyearsof the Mitterrand ignored the EC during thefirst presidency.26 of Francedid call formorequalified majority voting and, to the surprise a majority thethreatened many, supported voteto override British vetoof unthecerealpricepackagein May 1982.But substantive disagreements forEC reform. The mostimportant dermined Franco-German cooperation of thisperiod, one in October1981on un espace social Frenchinitiatives to much.The first which was an antiunempeen,didnotamount initiative, billedas the initial ployment program of fiscalstimulation step towarda in either Bonnor Londonand was fewfriends "socialistEurope," found at theCouncil.The secondoffered fortechnology neverdiscussed support in theprocessofadoption policiesalready by theEC. thisperiod outsider reflected itsunorFrance'sroleas a European during economicpolicies,whichran counter to the moreconthodoxdomestic and Britain. Until1983,Frencheconomic servative policiesof Germany led policywas conceivedby themoreradicalwingof the Socialistparty, and Pierre Nasuchas Jean-Pierre Chevenement bypoliticians Beregovoy. to increase and increases in intervention direct tionalization, employment,
at theopening session oftheintergovernmental 23. Fora summary ofGenscher's comments vol. 2, pp. 28-29. conference, see Gazzo, Towards EuropeanUnity, onnewpowers for the seeGazzo, Parliament, 24.Fora summary ofGermany's draft proposal see Gisela Hendriks, policy, 25. For a discussion of German viewsabouttheagricultural and the CAP: NationalInterests and the European Community," International "Germany standagainst moreintensive monetary Affairs 65 (Winter 1988-89), pp. 75-87. The German of increased was condition capitalmobility cooperation softened in 1988-89, once theinitial being met. draws thefirst Mitterrand during presidency heavily 26.Thisaccount ofFrench foreign policy
ou le triomphe des apparences, 1981-1985 on Gabriel Robin's La diplomatiede Mitterrand Towards European Unity,vol. 1, pp. 39-40.

euroeuropeen and anotherin the autumnof 1983 on un espace industriel

1981-1985) (Paris: Editions dela Bievre, (Mitterrand's diplomacy orthe triumph ofappearances, 1985).

Organization 30 International conbusiness andfinancial international undermined spending socialwelfare had government French March 1983, the By economy. in the French fidence Monthe franc within the European of twodevaluations negotiated already The governments fora third. heading (EMS) and was rapidly etary System made it clearthata conGermany, states, particularly of other European with wasincompatible continued membership policies tinuation ofexpansive in theEMS. proMitterrand to movetoward autarky-import urged ManySocialists of the EMS-to protect expanand repudiation capitalcontrols, tection, oftheSocialist inthemoderate party, wing sionist domestic policies.Others MichelRocardand JacquesDelors and backed by politicians represented advocatedconeconomic technocracy, by theFrench unanimously nearly policyconexternal freetrade,and an austerity EMS membership, tinued and cutsin publicexpenditures. Some moderates of wage restraint sisting fundamentals traditional French theeconomic underlying that also realized Although fortheCommon Policy(CAP) wereshifting. Agricultural support thegovernment notmovetoo quickly dictated that against domestic politics a largenetbeneficiary the from Francewas no longer interests, agricultural after theentry ofSpainandPortugal wereeven anditsprospects EC budget,
bleaker.27

intheEMS, announced toremain on 21 March1983, decision Mitterrand's inFrench butalso inFrench domestic politics notonly marked a turning point theEC. WhiletheEMS decisionmayhave been influenced policytoward indesireto remain factors "European," other in partby an independent have of the autarkic policies,whichwould ultimately cluded the failure as thepolicy to impose as much austerity theFrench government compelled which allowedMitterparty, oftheCommunist they chose,and thedecline French decision economic with Socialists.28 moderate randto alignhimself
spending agricultural and his ministers mayhave been lookingfora way to limit 27. Mitterrand it. This would account forthe attempts to cast withoutappearingto be responsibleforlimiting became more Thatcheras a scapegoat and for the fact thatalthoughthe French government and the French ministers reform spoke out occasionally about accommodatingof agricultural of generousagriculovergeneroussupport,France remainedone of the staunchestsupporters turalsubsidies as late as the Brussels summitof February 1988. See Paul Taylor, "The New and in the 1980s," in Juliet Lodge, ed., The European Community Dynamicsof EC Integration the Challenge of the Future (London: Pinter,1989), p. 6. decision is disputed.The decisive economic argument 28. The reasoningbehindMitterrand's appears to have been made by the French treasuryvia Laurent Fabius, who told Mitterrand compel the confidencein the economy and ultimately thatleaving the EMS would undermine The decisive as would continuedmembership. to impose as muchausterity Frenchgovernment political conditionappears to have been the decline of the French Communistparty,which to align himselfwiththe moderatewing of the Socialist party.See David allowed Mitterrand Cameron, The Colors of a Rose: On the AmbiguousRecord of French Socialism (Cambridge, Mass.: Harvard UniversityCenter for European Studies, 1987); Peter Hall, Governingthe in Britainand France (New York: OxfordUniEconomy: The Politics of State Intervention versityPress, 1986), pp. 193 and 201 ff.;OrganizationforEconomic Cooperation and Development(OECD), WhyEconomic Policies Change Course (Paris: OECD, 1988),pp. 56-64; and PhilippeBauchard, La guerredes deux roses: Du reve d la realite,1981-1985 (The war of two roses: From dream to reality,1981-1985) (Paris: BernardGrasset, 1986).

SingleEuropean Act 31 inthehands ofRocard, vested was thus making Delors,andother politicians intheir convinced ofthevirtues ofconservative economic policiesandfirm belief thatFrancemust workwithin Europeto achieveitseconomic goals. inJanuary With 1984oftheFrench in theCouncil theadvent presidency to theEuropean ofMinisters andwith elections Parliament just twomonths to theEuropean he hadespousedsincethe away,Mitterrand-true idealism 1940s butundoubtedly ofthepolitical also conscious to be gained advantage outofnecessity-announced a major bymaking a virtue initiative diplomatic a relaunching ofEurope.From that a decisive for point on,Mitterrand played roleinsettling French andconcessions European disputes. leadership helped andbudget resolve British French agricultural complaints. negotiators began internal liberalization to support market and collaborative and deresearch Mitterrand velopment. beganto adopttherhetoric ofEuropean federalism. He spoke of reconsidering the Luxembourg compromise and supporting as longas it was limited procedural reform, to the Counciland theCommission a radicaldemocratization of EC politics.29 Aland did not imply though committed to using theEC to combat economic theFrench decline, remained uncertain whether government internal monetary policy, market anddevelopment liberalization, or cooperative research should be theheart of thenew initiative. Thus,Mitterrand, without beingentirely surewhere theinitiative was leading, becametheprimary spokesman forrelaunching Europe. One seniorFrenchdiplomat observeddryly, "MonsieurMitterrand'sterm as president of theEuropeanCouncilhas becomehis road to
Damascus. "30

Britain:the road to Milan

With Franceconverted totheEuropean remained themajor cause,Britain internal obstacle to an initiative market andprocedural liberalization linking reform. Britain's intotheEC in 1973had expanded theCommunity entry it.Insofar without as Thatcher was pro-European, strengthening itwas largely becauseshesaw theEC almost as an organization for exclusively promoting in theindustrial economic liberalism and servicesectors.By British stanthisrepresented a considerable sincetheopdards,however, commitment, Labourparty was against market liberalization and against position Euroabolished controls peanintegration. Having in 1979, exchange having begun liberalization oftelecommunications services in 1981, having publicly prom-

29. Mitterrand, speechdelivered to theEuropean Parliament, 24 May 1984;reBrussels, printed in Gazzo, Towards EuropeanUnion, vol. 1, pp. 82-85. 30. Robin, La diplomatie de Mitterrand, p. 145;see also p. 219. Foranother, equally ironic " 'J'ai faitun reve . . .' Le but morepositive assessment, see Philippe Moreau-Defarges, president Mitterrand, artisan de l'union europeenne" ("I hada dream . . ." President Francois Mitterrand, craftsman of European union), Politique Etrangere 50 (Fall 1985),pp. Francois 359-75.

32 International Organization ised to lowerEuropeanairfares, and,lastbutnotleast,beingfully aware andinsurance that thecity ofLondoncontained highly competitive banking Thatcher ofservices.3' sectors, beganto call for pan-European deregulation The British also favored government costrengthening Europeanpolitical an independent without operation, although creating bureaucracy. British to EC policy In the early 1980s,the mostimportant objection the heavy British deficit underthe CAP. Withits small, stemmed from inareasnotgenerously sector concentrated efficient agricultural subsidized in sheephusbandry), Britain bytheCAP (for example, gained little from the thatcomprise 70 percent of the EC budget. At the agricultural programs was by farthelargest same time,Britain to the percapitanet contributor to get "her money back" from theEC, and budget. Thatcher campaigned British to thebudgetary herfrugality bolstered opposition policy.Whenshe that she insisted oftheBritish was electedto office, two-thirds deficit over and thatpermanent be madeto thepastfewyearsbe rebated adjustments future limit and to prevent agricultural spending budgetary disequilibria. thantemporary More was at stakein the British objections budgetary In 1973,Britain had beenforced to accepttheagricultural and imbalances. For thosewho had worked EC institutions. fordecades in theComisting and whosaw theCAP as partoftheinitial Franco-German munity bargain at the heartof the EC, the British demandcalled intoquestion the very foundation of European cooperation.French ForeignMinister Claude in 1982that"the United declared Cheysson Kingdom [seeks] juste retour, which is nota Community idea. We and theBritish are notspeaking ofthe '32 samecommunity.' TheThatcher evenmore than government, British previous governments, and Parliament was waryofattempts to strengthen theCommission and to intoareas notdirectly connected with expandEC competence trade,such and sociallegislation. as indirect taxation Thatcher also firmly opposedforinCouncil inpart malchanges becauseofa suspicion procedures, ofwritten a suspicion sharedby mostBritish conservatives. Although constitutions, she was opposedto anytreaty that undermined changes thesovereign prerogatives recognized by theLuxembourg she recognized the compromise, needforsomemovement awayfrom unanimous decisionmaking and thus favored meansofencouraging informal majority voting.
31. The Conservative government beganpushing deregulation ofservices during theBritish presidency of the Councilin 1981.See SimonBulmer and William Paterson, The Federal

budgetary policies as part of the acquis communautaire, the corpus of ex-

26 January 1982.HoweechoedCheysson's 32. Cheysson, citedinFinancial Times, of point view:"The negotiation launched at Stuttgart andcontinued at Athens inDecember 1983 is not andtheCAP. Itis about thewhole future ofEurope." justaboutthebudget shapeanddirection See Geoffrey Howe, "The Future of theEuropean Community: Britain's Approach to the Negotiations," International Affairs 60 (Spring 1984), p. 190.

Republic of Germanyand the European Community (London: Allen & Unwin, 1987), p. 48.

Act 33 SingleEuropean an agenda forEurope: a policyhistory Setting of the 1992 initiative


From the heightof "Europessimism" to the French presidency

Disputesover the apogee of Europessimism. The early 1980smarked reand budgetary theaccessionof Spainand Portugal, policy, agricultural Europe proliferated: theEC intoSubgroups Ideas ofsplitting form festered. The divergent Integration. abgestufte Community, a deux vitesses,a two-tier axis traditional their undermined policiesofFranceandGermany economic of the ofthelaunching theexception within theEC. With of collaboration in InforforResearchand Development Programme EuropeanStrategic commitment (ESPRIT) in 1983,appealsfora renewed Technology mation theGenscherofthese appeals, Themost significant cametonaught. toEurope interpreted are sometimes Declaration, andtheStuttgart initiative Columbo theutter theydemonstrate of the SEA.33In fact,however, as precursors 1984. before forreform absenceofa Europeanconsensus calling was a Council declaration initiative of1981 TheGenscher-Columbo It was proposed bytheGertoward unity. movement European forgreater and who was later joinedby his Italiancounterpart, minister, manforeign theinitiative ministers The twoforeign justified backedbytheCommission. malaisein the EC, and institutional recession to economic withreference of the development statesprevented betweenmember but disagreements To addressthecomplecooperation. outside ofpolitical proposals, specific in theCouncilsince which had beendiscussed market, tionoftheinternal was commissioned. in 1974,a report itsinception theGenscher-Columbo andambiguous legalstatus, Despiteitsvagueness in Europe criticized by France,whoseinterest was immediately initiative a socialist toward Europe, forsteps to sporadic proposals was stilllimited thesine remained ofthebudget resolution wrangle whom for andbyBritain, French Chandernagor, Andre else. overanything qua nonfornegotiations Assemblee the before observed sarcastically Affairs, Minister forEuropean theroof to buildEuropefrom weretrying thatsome Europeans Nationale down.34
Market: Integration andIntergovern33. See DavidCameron, "Sovereign Statesina Single at theBrookings Institution, Washmentalism intheEuropean Community," paperpresented that therootsoftheSEA can be traced to ington, D.C., 29-30March1990.Cameron argues initiative prior to 1981was considered the1970s.Butno internal market anddecision-making seriously byanyofthethree major parties. de Mitterrand, p. 219. See also Gianni 34. Chandernagor, citedin Robin,La diplomatie on European Union,' Bonvicini, "The Genscher-Columbo Planand the'SolemnDeclaration andJoseph Union, pp. 174-87; Weiler, "The 1981-1983," inPryce, TheDynamics ofEuropean ofIndecision," Revued'Integration EuGenscher-Columbo Draft European Act:The Politics
rop&enne6 (Spring 1983), pp. 129-54.

34 International Organization didsetup an ad hoc working to lookinto theinitiative, The Council group back to theStuttgart summit ofJune1983,itsrecombutwhenit reported mendations did little morethancodify thestatus quo. The Councilissued the"SolemnDeclaration on European was based on thead Union,"which andreaffirmed ingeneral hocgroup's report terms themember states'desire to reinforce and developbotheconomic and security cooperation. It called thecompletion oftheinternal for market numerous other alongside proposals ofwidely coordinated varying promise, including socialprograms, reflation, reinforcement of the monetary and a Europeanindustrial system, policy. The document thelack ofconsensus againreflected on procedural reform, suggesting onlythatmember statesvoluntarily abstainrather thaninvoke it elicited theveto.Nonetheless, immediate proces-verbaux reaffirming the Luxembourg compromise from Britain, Denmark, France,Greece,and Ireland. Shortly FrenchPrime thereafter, Minister Pierre Mauroy launched a publicattackon the Stuttgart the veto right.35 In Declaration, reasserting the end, the only solid achievement of the meeting was acceptanceof Genscher's fouroutstanding issues in theComproposalto linktogether munity-anincreasein EC funds, market agricultural internal libreform, andtheentry ofSpainandPortugal-in thehopethat eralization, they would be resolved as a packageat theAthens summit laterthat year.
The turning point: the French presidency

All thischanged withFrance'saccessionto therevolving unexpectedly presidency of theEC in January 1984,less thana yearafter themoderate oftheSocialist assumedpowerin France.Mitterrand's wing party extraorinvolvement inthesix-month dinary personal oneFrench presidency prompted a "one-man observer He beganthe yearwitha to call-him orchestra.'"36 ofall theEuropean tour to seeka consensus for personal capitals relaunching theEC. Throughout Minister 1984,he and FrenchForeign RolandDumas "shuttle between practiced diplomacy" Paris,Bonn,and London.Mitterrand's speeches,mostnotably in May beforethe EuropeanParliament, theeconomic underscored nature ofthecurrent crisis andelaborated a vision tocombat theeconomic ofthefuture decline ofEurope. EC as an instrument to look like an abandoned "Europe," he warned,"is beginning building and reHe proposed site."37 political cooperation, technological programs, refrains weredecision-making twoconstant form of theCAP. In addition, market reform. and internal The outlines ofan interstate werebecoming clear.Germany and bargain Britain wereagreedon theneedforliberalization, with weak support from
pp. 35 and 315-24.
35. See Robin, La diplomatiede Mitterrand, p. 219; and De Ruyt,L'acte unique europe&en, 36. Moreau-Defarges," 'J'ai faitun reve ...,'." p. 368.

37. "SpeechofFrancois theNetherlands Mitterrand Before 7 February Government, 1984," released bytheAmbassade de Francea Londres (CTL/DISCOM/29/84).

SingleEuropeanAct 35 on theneedforprocedural and Francewereagreed France,whileGermany planto resolve Britain.38 ButMitterrand's from with weak support reform, a conference to "preserve Europe" was blockedby theseissuesby calling demand forcompenBritain's disputes overCAP reform, thelong-standing EC and the need forgreater sation,the accessionof Spain and Portugal, in each Within a year,theseissueshad been resolved, resources. financial French to compromise.39 willingness to an unexpected owing case largely when theFrench put government inearly1984, The first stepsweretaken support unquestioningly on noticethatFrancewouldno longer itsfarmers policy,"deof agricultural in Brussels."The revitalization their interests serve of Agriculture, "can no longer claredMichelRocard,thenMinister a UnderRocard'sdirection, of Europeanunification."40 as theinstrument thefirst of severalinitiwas reachedin March1984,marking compromise under control. spending agricultural ativesto bring issue. disputeswere also at the heartof the enlargement Agricultural andwinefrom theimport ofcheapvegetables Spain French fearing farmers, theFrench to stallon this government had longencouraged and Portugal, threats manifested themselves through conflicts issue.In theEC, therelated wereoverextended, so and counterthreats aboutthe budget.EC finances muchso thattheCouncilhad decidedin October1983to delaypayments had insisted at Stuttgart that underthe CAP forlack of funds.Germany to block enterby theend of 1985and had threatened Spain and Portugal Thatcher issue was settled. in EC funding until theenlargement increases until the increases issuewas budget to blockanyfunding hadalso promised more Mitterrand, situation perilous, growing resolved.Withthe EC fiscal after to budgetary increases had reversed itsopposition whosegovernment thenethathe wouldcomplete in 1983,announced turn thepro-European 1984.4' by September gotiations inMarch1984, French In Brussels no time. negotiators wasted Mitterrand forthefirst timethattheBritish offered a seriesof concessions, agreeing andshould reflect lower Britain's be cutpermanently netcontribution should Italyin byjoining percapitaincome.But Francealso keptup thepressure Thatcher ?457 million. rebate for1983,whichtotalled theBritish blocking
nach der franzosischen Ratspras38. See Heinz Stadlmann,"Die europaischeGemeinschaft identschaft"(The European Community afterthe French presidencyof the Council), EuropaArchiv39 (October 1984), pp. 447-54. The Franco-Germanagreement on procedurewas only to strengthen partial, since France did not support German efforts the Parliament.France withone thatwould have sanctionedthe creation preferred to replace Article235 of the treaty sets of membersinvolved in different programs. of a "differentiated Europe," withdifferent to facilitate The French have traditionally supporteddiplomaticflexibility projectswhich,like EUREKA, involve only some EC countriesand also involve non-EC countries.See De Ruyt, L'acte unique europeen, p. 99. 39. See Stadlmann,"Die europaischeGemeinschaft";De Ruyt,L'acte unique europeen,pp. 2 April 1984. 47-49; The Guardian, 25 January1984; and press conferencewith Mitterrand, For a contemporary critique of Mitterrand'spolicy changes, see Robin, La diplomatie de Mitterrand, pp. 69-81, 133-45, and 211-29. 40. InterviewwithMichel Rocard, Intervention, February-April1984, p. 102. 41. See Robin, La diplomatiede Mitterrand, p. 215.

36 International Organization the British for considered budgetcontribution retaliating by withholding and by the 1984,butshe reportedly was dissuadedby Cabinetopposition theBritish before or European courts.42 fearoflosing a challenge toa system for limiting agricultural spendTheheadsofgovernment agreed inBritain's contribution inlinewith roughly ingthat wouldkeepanygrowth Butthebudget rebate for itspercentage oftheEC grossdomestic product. with theothers offering ECU 1984andfollowing yearsremained unsettled, After and Thatcher ECU 1.5 billion. days of face-toI billion demanding seemedto have reacheda deal at theheads of government face haggling, weredrafting a communique officials announcing ECU 1.2 billion.British to pay was blockedby Kohl's suddenrefusal thesuccesswhenagreement thanECU 1 billion.His unexpected shareof any sum larger Germany's the negotiations, the stubbornness leavingan angryThatcher grounded scapegoat. Mitterrand calledfora conference to discuss After theBrussels meeting, theEC among thosemember states which would"standup and relaunching In his May 1984speechto theParliament, he pickedup the be counted."43 aboutthepossibleneedfora Europea geothread again,speaking frankly ifa budget Dumasannounced that metrie variable. was notreached, agreement wouldcall a meeting without theBritish to discussvarious hisgovernment and he boldlyraisedthe possibility of a two-track proposalsforreform, to theElysee.For hispart, Kohlannounced Europeduring Thatcher's visit that hadbeencreated"to move the"decisiveconditions thereafter shortly oftheEuropean market andmajority intheCountoward voting completion toward within cil. He calledformovement a year, Europeanunity greater whether or notall countries agreed. isolated becameincreasingly and Kohlrepeated Britain as Mitterrand the threat ofa two-tier that wouldleaveBritain Europe(Europed deuxvitesses) without a say in thedetails ofthenewagreements. The lessonofthe 1950s, whenBritain hadrefused tojoin theEC, was that exclusion couldbe costly inthelong Decades later, theBritish werestill run. trying toreverse priorities set in their absence. with Mitterrand thethreat ofexclusion a stratagem great finesse, exploited thethreat thanitmayseemin facilitated was morecredible bythefactthat Francehadlongpromoted two-track initiatives, especially inthe retrospect. area ofhigh thisperiod, a two-track moreover, EC had technology. During a number of prominent found amongEuropeanacademicsand exponents
42. See Ludlow, Beyond 1992, pp. x-xi; and Howe, "The Future of the European Community,"pp. 188-89. Britaindid delay paymentsof an emergency levy requestedby the EC. in "The 43. This account of thethreat of excludingBritaindraws heavilyon Taylor's insights New Dynamics of EC Integration in the 1980s." For earlierversions of the same thesis, see RichardCorbett,"The 1985 Intergovernmental Conferenceand the Single European Act," in Pryce, The Dynamics of European Union, pp. 268-69; and Francoise de la Serre, La GrandeBretagne et la CommunauteEuropeenne (Great Britainand the European Community) (Paris: Presses Universitaires de France, 1987), pp. 193-94 and 207-9.

Act 37 SingleEuropean commentators.44 It is thusno surprise thatthe threat was understood as The British anda Tory suchacrosstheChannel. presspicked up thetheme, a more think tank issueda report calling for conciliatory negotiating position to headoff theexclusion of Britain from future European initiatives.45
The breakthrough: the Fontainebleau summitmeeting

to theFontainebleau ofJune1984, In theweeksleading summit Thatcher at Brussels. She exhibited a newpositive seemedsobered byherexperience a paper entitled spirit, quietlycirculating "Europe: The Future,"which for hergovernment's vision outlined relaunching Europe.Attheheadofthe was liberalization of the internal list of priorities market, particularly in British Minister Howe calledfortheremoval of services. Foreign Geoffrey "all-and I meanall, economic 1990as a deadline.46 barriers," suggesting werequietly These proposals supported by France."Europe: The Future" thedecision-making for also addressed issue,calling qualified majority voting to be respected in cases in which thetreaty forit: nations should provided be able to veto "wherea veryimportant national interest is at stake" but Councilmembers.47 theFontainebleau Mitterrand seemedto choreograph ina manner summit to remind Thatcher once again of thepossibility of a two-track designed Europe. Heads of government cooled their heels fortwo hourswhenthe an extempowas delayedto allow Mitterrand to present opening meeting of his "dreamsof Europe" before thetelevision camraneousexposition Whatever was more at Fontainebleau eras.48 thecause,Thatcher conciliatory thanshe had been at Brussels.The decisiveissue,whichtookmorethan A comhours to resolve, was againthesize oftheBritish rebate. thirty-six was finally reached at a figure towhat theBritish promise roughly equivalent in Brussels, with had been offered theFrench (and had rejected) assuming
44. Fora summary ofthedebate abouta two-track EC, see HelenWallace andAdam Ridley, Europe:TheChallenge ofDiversity (London:Routledge & KeganPaul,1985), especially chap. An alternative Integrationskonzept? (Multi-tiered integration: to theexisting concept of integration?) (Kehlam Rhein:EngelVerlag, 1984).
45. See The Guardian, 30 May 1984; and Center forPolicy Studies, Making It Work: The Future of the European Community (London: Center for Policy Studies, 1984). See also Le

"should be required .

. to set out theirreasons fully" before the other

5; and Eberhard Grabitz, ed., AbgestufteIntegration:Eine Alternative zum herkommlichen

Gazzo, Towards European Union, vol. 1, pp. 86-95.

to theBundestag, Monde,18March1984and5 May 1984; and Kohl,speechdelivered Bonn, in Gazzo, Towards 28 June1984, andexcerpted vol. 1, p. 98. EuropeanUnion, 22 March1984. 46. Howe,quotedinFinancialTimes, 47. See "Europe: The Future-United Kingdom in Memorandum, June1984"; reprinted in the 1980s,"p. 7, Taylor 48. In "The New Dynamics of EC Integration arguesthatthe was due to thefactthat in March moodof conciliation theBritish and French failure during an awareness at Brussels, had"lookedintotheabyss,andwereshocked into oftheneed they to holdthemselves back." According to Taylor, bytaking time to confess hispersonal ideals, was letting Thatcher Mitterrand "see thefuture."

Organization 38 International theCouncil to generalize oftheburden. agreed Moreover, a sizableportion intothebudget: no member state ofjuste retourto payments theprinciple burden whichis excessivein a "budgetary to sustain shouldbe required relation to itsrelative prosperity."49 a package whenmomentum toward marked the moment Fontainebleau and decision-making reform internal market liberalization deal containing The heads of government called fora packageof became unmistakable. and collaborative research coordinated stimulation, internal liberalization, impulse comparable togivetheEC "an economic anddevelopment designed Market in the 1960s. "50 Theyfurther agreed to that givenby theCommon meetbe abolished. Attheir summit controls wouldeventually that customs Mitterrand and Kohl demafter Fontainebleau, shortly ingin Saarbrucken commitment to internal market reform of their onstrated the seriousness into thethreat ofa two-tier negotiations Europe)byentering renewing (while on normal theharmonization ofall controls goodstraffic, overtheabolition ofpeople, thefree movement andsanitary ofdomestic legislation, veterinary administrative and the procedures, the adoptionof commonstreamlined union. Thiswould create a "super totheBenelux customs eventual accession thefivestates.5 EEC" among at Fonon expanding voting majority Mitterrand also sought agreement forthecreation oftwocommittees. The to settle tainebleau butwas forced calledtheAdonnino on a People'sEurope(later theAd Hoc Committee first, to investigate were a mandate received aspectsoftheEC that Committee), citizen: forindividuals, customs formalities visibleto thecommon directly thecreation ofEuropean and symbols, ofuniversity diplomas, equivalence The secondand farmoresignificant comprograms. Europeanvolunteer Affairs for Institutional calledtheDooge theAd Hoc Committee (later mittee, toconsider hada mandate after itsIrish institutional, chairman), Committee, reform. and economic political, of theDooge Committee was enormous. AcThe symbolic significance it was to be set up on thelines to theFontainebleau communique, cording in 1955by theCouncilof the thegroupformed of the Spaak Committee, forthe (ECSC) to developproposals EuropeanCoal and SteelCommunity ledin 1957tothesigning ofthat decade.Thoseproposals relance europe'enne oftheEC.52Mitterrand ofRomeandthefounding immediately oftheTreaty
49. See De Ruyt,L'acte unique europeen,p. 261. The Commissionlateradopted a standard to measure the burden. 50. See Gazzo, Towards European Union, vol. 1, pp. 96-97. settingout 51. The Benelux countriesassented in late October 1984, and a memorandum und die Howe, "Grossbritannien objectives was approved on 12 December 1984. See Geoffrey Deutschlandals europaische Partner"(Great Britainand the Federal Republic Bundesrepublik of Germanyas European partners),Europa-Archiv39 (November 1984), p. 637. France reportedlyinsisted that Italy be excluded, for fear that Italian participationwould slow the were concluded in early 1990. negotiations.The negotiations 52. See "Conclusions of the European Council at Its Meeting in Fontainebleau, 26 June in Gazzo, Towards European Union, vol. 1, pp. 96-97. For a discussion of 1984"; reprinted the Spaak Committee,see Hanns JurgenKusters, "The Treaties of Rome, 1955-1957," in Pryce, The Dynamics of European Union, pp. 84 ff.

Act 39 SingleEuropean ambitions fortheDooge Committee Maurice signaled grand by appointing anda signatory to theTreaty ofRome,as his Faure,a strong pan-European and he arrived at representative. Faurehad Mitterrand's personal support, witha draft thathad reportedly been approved thesecondmeeting report overtheobjections by Mitterrand himself oftheQuai d'Orsay. It soon becameclearthat whilethemember statesdiffered overpolitical andprocedural reform, all (with the cooperation, monetary policy, defense, ofGreece)werein substantial abouttheneed possible exception agreement intheFontainebleau for market as hadbeenreflected internal liberalization, thereport that On detailed contained many proposals communique. points, liberalization of were originally British, such as commonEC standards, and open publicprocurement. and insurance transport services, devotedmostof itstimeto procedural reform, Although theCommittee whichit viewedas its "real task," it was unableto agreeon thedecisive and veto rights. the issues: qualified majority voting On thesequestions, to find itself locatedin thecenter British delegation expected comfortably ofthespectrum, theFrench andperhaps theGerman delegations. alongside ButtheFrench incalling formajority on internal voting joinedtheGermans to thetreaty. Seven ofthetenmember market issuesand foramendments theLuxembourg to renounce and expand stateswerewilling compromise while Greece,and qualified majority voting through treaty changes, Britain, theright to vetowhen Denmark stuckto the British program, reasserting wereat stakeand accepting interests" onlythe ''veryimportant national alreadyacknowlvoluntary, informal stepsto encourage majority voting The sevenalso calledforan intergovDeclaration. edgedin the Stuttgart a draft of European union.53 ernmental to negotiate conference treaty it came timeto namea new EuAs theDooge Committee deliberated, a newpresident of theCommisropeanCommission and,moreimportant, to expedite therelance europe'enneby sion.Franceand Germany, seeking from a large the positionpoliticalstatus,pressedfora president giving Domesticcoalitional Germany, country. politics appearto have prevented itwas,from a suitable candidate. turn Davignon, whoseinformal nominating exlackednational a Belgianand theself-nominated political front-runner, was considered inspiring leader, perience, by some to be an insufficiently economicpolicies.Delors, freed and was associatedwithinterventionist from of Finance in France, thepostof Minister just in timeby a reshuffle minute a at thelast His stature as politician was nominated by Mitterrand. his yearsas a member of theEC Ecowithseniorministerial experience, and hisreputation forsensible economic nomic and Social Committee, polimmediate Thatcher led and Britain to approval. icymaking Germany signal
53. See Financial Times, 30 November 1984,3 December 1984,22 March 1985,and 10 May priority of the EC 1985; and Le Monde, 30 March 1985. France, too, accepted that the first homogene. For a discussion of the must be the creation of an espace economique interieur to therenunciation oftheLuxembourgcompromise, objectionsoftheQuai d'Orsay, presumably Conference," p. 269. see Corbett,"1985 Intergovernmental

40 International Organization of naming nonetheless took the precaution Cockfield (a strong candidate withCabinetlevel experience, despitepresscommentary to thecontrary) as a liberal counterweight. embarked on histrip themember Delorsimmediately exthrough states, ploring possibilities forreform. Upon returning, he quietly wentto work, to hisfellow distributing portfolios commissioners-usually theoccasionfor extended He proposed haggling-with unprecedented swiftness. hisreform in December1984and announced to thenewCommission thegoal strategy theinternal of competing market by 1992in his maiden the speechbefore EuropeanParliament on 14January 1985. At the Luxembourg of March 1985,Franceand Germany summit supan initiative, based on theDooge Report, to relaunch theEC ported largely bylimiting theLuxembourg EC competence compromise, extending inforAt Brusselsa fewweeks theinternal market. eignaffairs, and completing thegoal of a single theCouncilendorsed market later, by 1992and called a specific todraw with upontheCommission upa detailed timetable. program LordCockfield, nowInternal Market Commissioner, interpreted hismandate material that had longbeenlanguishing in the broadly. Quickly assembling III (responsible forinternal market oftheDirectorate-General drawers polWhite thecelebrated ofa icy),he drafted Paper.In lieuofa firm definition internal Cockfield setforth three hundred "completed market," nearly spetax(VAT) harmonization cific value-added and mutual proposals, including of freemarket recognition, accompanied by a brief defense philosophical liberalism. In therun-up in Milanduring to the summit thelast days of June1985, In addition to theDooge Report proposals beganto multiply. andtheWhite an extension oftheEC substantive Paper,Delorssuggested responsibilities, and development of research and reform thedoubling including of funding themonetary internal Delors' publicspeechesbeganlinking libersystem. alization that thefirst to qualified was unattainable majority voting, stressing without the secondand thatneither was possiblewithout an intergovernofRome.The British mental to amendtheTreaty conference government, to channelmomentum but nonetheless feeling marginalized hoping away a counteroffensive. launched The British from treaty initiative amendments, a proposal tieditsprevious forinternal market announced proposal reform, and nowcodified in theWhite to theFontainebleau summit prior Paper,to to abstain rather than invoke theveto.Thispro"gentleman's agreements" two new elements: ceduralproposalnow included restraint in voluntary at lowerlevelsoftheCouncilonce theLuxembourg invoking compromise and a separate thechiefs ofstatehad setan objective treaty codifying principlesofinformal political cooperation.54 As theMilansummit opened,theheadsofgovernment unanimously ap54. See De Ruyt, L'acte uniqueeuropeen, pp. 57-59.The proposals of Britain, as wellas arereprinted thoseoftheBenelux countries, France, Germany, andItaly, inGazzo, Towards For commentary, see TheTimes EuropeanUnion, supplement. 21 June1985. (London),

SingleEuropean Act 41 theBritish proved theWhite Paper.Theyalsoimmediately accepted proposal to decisionmaking, butformostcountries on informal improvements this a moreambitious was onlya starting point.Genscher proposed agreement ofa "return to thedecision-making which existed beconsisting procedure foretheso-called on internal Luxembourg disagreement," majority voting to abstain from market theveto.55 issues,and informal agreement invoking But some,presumably including found Thatcher, renunciation oftheLuxThe text embourg was rejected, evenafter compromise unacceptable. being British amendments. watered downwith At thismoment, ItalianForeignMinister of mere Andreotti, skeptical and anxiousto avoid a failure declarations of intention underthe Italian calledfora majority voteon whether to convenean intergovpresidency, under Article 236.Germany andtheBenelux ernmental conference countries the Italianmeasure, and Franceand Irelandhesiimmediately supported and Greeceopposed. tatingly joined them, leaving onlyBritain, Denmark, Britain theinvocation ofa majority On procedural grounds, protested vote, wererejected and theconference butitsprotests was called.56 Thatcher returned from Milanin a fury butwithin a fewdays allowed herself to be persuaded thatBritain shouldattend theconference. The reasons were varied.First,Britain had little to lose from qualified majority voting on theinternal market which itfavored ingeneral andwhich program, British jeopardized as Thatcher assessedthem, inonly a fewareas. interests, In areasoutside theinternal Thatcher to haveassumed market, appears that weresimply reform rhetorical. The British werealso sensitive proposals to reminders thatsomeprocedural Delors' constant changeswereneededto of theinternal market ensure implementation plan. Second,theprocedure thetreaty under Article foramending 236(as opposedto negotiating a new twoadvantages totherecalcitrant: itexcluded offered theParliament, treaty) Therewouldbe no two-track and it required decisions.Third, unanimity. Mitterrand continued to feedspeculation abouta two-tiered Europe,calling thedecisions at Milan"a testof truth."'57 In theend,Britain attended the whereitplayeda skeptical butultimately conference, role. constructive
the intergovernmental Victory for the minimalists: conference

A draft thefirst month oftheintergovernoftheSEA was written during details wereworked outbetween thefortheremaining mental conference; and headsof stateat fivemeetings eignministers between 21 October and
56. See De Ruyt, L'acte uniqueeuropeen, pp. 60-61. In a memorandum written by the Italians prior totheMilansummit, theoption ofinvoking Article 236(which allowsamendment oftheCouncil) byunanimous consent was presented as a possible a new compromise between andthemore ad hoc British treaty thevotetaken at thesummit approach. Nonetheless, does notseemto havebeenplanned in advanceby thegovernments that votedaffirmatively. See
Gazzo, Towards European Union, supplement, pp. 3-8. 55. See Gazzo, Towards European Union, supplement, pp. 27-32.

57. Taylor, "The New Dynamics ofEC Integration in the1980s,"p. 10.

42 International Organization was signed in February 1 December1985;and thedocument Most 1986.58 within thefirst twomonths. ofthecentral issueswereresolved oflimiting can be interpreted thescope as a process The SEA negotiations to gain the acceptancenot of reform-aprocessnecessary and intensity member states itcameto drafting butalso ofother only ofBritain who,when The maxa document, suddenly provedquitejealous oftheir sovereignty. infavor was progressively sacrificed ofthe ofbroadreform imalist program and substantive limited to those procedural minimalist program changes market. Minimalist theinternal limitations werenegoneededto liberalize continued the trend, evident tiatedin threestages.First,the negotiators toward oftheDooge Committee, sincetheappointment blocking significant notdirectly connected with theinternal marreform inareasofcooperation theextension ofmajority to a number ket.Second,they obstructed voting and social regulation. internal market of contentious issues,suchas fiscal theimplicit of theveto withgenerous And,third, theyoffset suppression theharmonization andsafeguard ofinternal exemptions provisions regarding legislation. market In all cases otherthaninternal policy,the lack of a consensus to a minor or symbolic level. themajorstates reduced commitments among reform andtypical Thefateofmonetary is an important example. Monetary had longbeena personal ofDelors,and theCommiscoordination interest toward sion'sproposals to theintergovernmental conference madeprogress a common fundsubjectto theunanimous monetary approvalonlyof the The two-track groupof member statesthatwouldchoose to participate. proposalwouldhave therefore granted EC legitimacy to any effort by a theopening of the smaller after groupto proceedon its own. But shortly thisactivism was curbedduring an informal of the conference, meeting of economicsand finance, ministers who insisted thattheybe consulted before weremadeto theconference. anyfurther monetary proposals andsomeothers felt that theDelorsproposal France, Italy, was tooweak, while Germany, Britain, andtheNetherlands wereopposedtothediscussion of monetary believedthatfreedom of policyat theconference.59 Germany and coordinated economic capitalmarkets policymust precedetheconsideration offurther coordination. Thatcher felt thatBritain, monetary which in theexisting ratemechanism oftheEMS, does notparticipate exchange at thattime.WhenGermany shouldnot surrender and any sovereignty and threatened to tie anymonetary Britain lostpatience to the agreement liberalization of capitalmarkets complete by the end of 1986,the others thatincluded quicklyagreedto a compromise no concrete stepsbeyond existing policies.
58. De Ruyt,L'acte unique europeen, pp. 67-91. 59. This account of the conferencenegotiations followsCorbett's "1985 Intergovernmental Conference," pp. 247-48. See also Ludlow, Beyond 1992, p. vi; and Gazzo, TowardsEuropean Union, vol. 1, p. 38. Delors' speech and his press conferenceof 27 November 1985, which offer his characterization of the role of Germanyand Britain,are reprinted in Gazzo, Towards European Union, vol. 2, p. 86.

SingleEuropean Act 43 unionwas included Reference to eventual monetary in thepreamble to but so was language the revisedtreaty, the EMS to its present limiting a two-track functions. Commission proposals permitting monetary system wererejected outright. Moreover, theSEA placedtheEMS under theunaruleofArticle a nonparticipant nimity 236,thereby granting Britain, in the ratemechanism, veto powerover itsfuture exchange evolution. This has ledsometoargue further that progress toward monetary union "seemslikely to be checkedrather thanencouraged." Even Delors could say onlythat therevised makes"allowancefor[its]evolution whenthisbecomes treaty essential to thepassageoftheinternal market One provision was program theexpansion aimedat poorer of structural funds of theEC. This regions to as the"convergence provision, referred policy,"was nota vitalelement as the Commission at timesclaimed, of economicliberalization, but was instead a side-payment to Ireland theSouthern nations inexchange for their The richer to pay moreto thepoorer political support. countries hesitated that structural anddevelopment funds countries butintheendagreed would thelimits be "significantly increased in real terms within of financial poslaid thefoundation fora sizableincrease sibilities"-a phrase that in transfersapprovedin 1988.61In contrast, proposalson political cooperation, human socialandcultural andenergy technology policy, policy, rights, policy of current did notgo beyonda codification whileenvironmental practice, under a newarea, remains rule.62 policy, unanimity Allstates andescapeclauses ontheneedfor agreed significant exemptions thenegotiators withregard market liberalization. deto internal Although theLuxembourg liberately avoided discussing compromise ortheprocedures for a majority vote(procedures later determined calling bytheCouncil itself), thevetoright ina weaker form in Article was retained 100(4)oftherevised outvoted in theCouncilor wishing which nations to invoke treaty, permits a safeguard their forreasonsof exiclause to retain domestic regulations whichthendetermines whether a ernments mustinform theCommission, an arbitrary form ofdiscrimination or a disconstitutes measure particular rather a legitimate ofderogation. on commerce, than form guisedrestriction or anygovernment thatbelievesa nation The Commission has abusedthe before theEuropean a special clausemayseekrelief safeguard Court, using overtheveto Thisclause shifts thelocusofconflict accelerated procedure. Andthe from ratification bytheCouncilto implementation by each nation. theCommisfinal arbiters have changed: theCourtand,to a lesserextent, sion-not themember as under theLuxembourg states, compromise-now determine forexempting ultimately whatconstitutes a proper justification
vol. 1,p. 8; see also pp. 25-26. 60. Delors,citedin Gazzo, Towards EuropeanUnion, 61. See Corbett, "1985Intergovernmental Conference," p. 249. 62. Ibid.,pp. 249-50and259.

necessary."60

underArticle36. To invoke thisclause, however,govgences importantes

44 International Organization an EC decision.63 It is important to note,however, thatthese statefrom to matters to theinternal procedures are strictly limited pertaining market. ofDecember1985, theheadsofgovernment At theLuxembourg summit details.The ratification oftheamendments resolved theremaining was unit was delayedby Denmark, problematic, although whichhad to fulfill its In thewakeof theLuxemto holda referendum. constitutional obligation Kohl and Mitterrand stated(though bourgsummit, perhapsonlyforposwouldhave been prepared to go further on thepowersof terity) thatthey theParliament andon monetary as well as on majority policy, respectively, Minister voting. ItalianPrime Craxi,whohad voiceddoubtsthattheSEA for ofthemaximalist theactonly included enough agenda, promised support it. iftheEuropean Parliament approved as "clear and decisive."64 hailedthe results In Thatcher, by contrast, on substantive issues satisfied theBritish manyways,thefinal agreement the most,as could be expectedin cases of lowest-common-denominator oftheagricultural Theoutcome for bargaining. budget negotiations, example, ofthelegitimacy reflected theother member states'acknowledgment ofthe British claimto reshapetheacquis communautaire in fundamental ways, of Francewith thechanged it also reflected to although perceptions regard Timeandtime thenegotiations, theBritagricultural spending. againduring andprocedural issues-in part ishgottheir becausethe wayon substantive turned countries outtobe weaker than their commitment ofother rhetoricuntil thefinal draft lookedvery much liketheplanfor all barriers eliminating to tradethatGeoffrey Howe had calledforin early1984. In theareas wheretheBritish favored government reform, such as liberalization ofservices Elsewhere trade, qualified majority voting triumphed. it failed.Although Britain did not succeedin blocking revisions altreaty an explicit itsnegotiators did succeedin preventing revocation together, of We cannot know for surehowfartheFrench theLuxembourg compromise. havebeenprepared wouldactually togo tocarry outthethreat andGermans are nowhampered of a two-tier from Europe,butcertainly they doingso, in themonetary particularly area,by theSEA.65 the negotiations Interpreting
Assessing supranationalinstitutionalism

theimportance The historical record does notconfirm ofinternational and Let us consider in turn. factors. each element transnational
63. De Ruyt,L'acte unique europe'en,pp. 172 ff.

64. See Taylor, "The New Dynamics of EC Integration in the1980s." 65. For speculatiSon on Franco-German see De Ruyt, intentions, L'acte unique europeen, p. 272; and Corbett, "1985 Intergovernmental Conference," p. 268. The viewthat theoutcome reflected a triumph forBritish negotiators has beenmostcogently argued byTaylor in "The New Dynamics ofEC Integration in the1980s."

SingleEuropean Act 45 The supranational modelstresses therole of EC Europeaninstitutions. Yet after Fontainebleau, governthe Parliament. institutions, particularly abettedby the Commission, deliberately excluded mentrepresentatives, from One of theDooge decisiveforums. representatives of theParliament first "DraftTreaty EsCommittee's actionswas to rejecttheParliament's with a French governtablishing EuropeanUnion" and beginnegotiations Fromthatmoment ignored ment draft instead.i5 on, keydecisionmakers viewedtheParliament's progovernments themaximalist agenda.National . .. requires a treaty encompassing ("real reform posalsas too open-ended neededto implement them"), all Community policiesand the institutions shouldbe "extended to new too democratic (thepowersoftheParliament and too automatic treaty wouldhave gone ofactivity"), (thedraft spheres TheParliament members' without unanimous Council approval).67 into effect the emasculation of thedraft and their treaty continuous against protests in thediscussions the "real participation" wereignored.68 exclusion from withease statesparried pressure parliamentary The factthatthe member thatthe SEA was necessary to cocasts doubton theargument certainly In the for evenmore institutional reform. demands thoroughgoing optrising that the protesting overwhelmingly passeda resolution end,theParliament the real reform of the Community thatour SEA "in no way represent[s] alternative butto acceptthefait accompli.69 peoplesneed," butithadlittle indepentheEC itself appearsto have been launched thirty yearsbefore, business interest from ofpressure groups.70 transnationally organized dently hadclose contacts with business which The Kangaroo GroupinParliament, until the1992 initiative was launched small after remained relatively interests, linkswiththeCounciluntil1986.The activities and established no formal focused on theconoftheRoundtable of EuropeanIndustrialists primarily Before1985,itschief involvecernsof its non-ECEuropeanmembership. tunnel.7' was in European infrastructure suchas theChannel ment projects was based in Genevaand did notmoveto Brusselsuntil The Roundtable 1988,whenDekkerassumeditspresidency. late.By thetime Dekker business lobbies Mosttransnational gotinvolved a yearhad passed sincethebehis oft-quoted delivered speeches,nearly
of 9 July1985regarding foran the proposal opinion 67. See the EuropeanParliament's Union, vol.2,pp. 13-14. inGazzo, Towards European conference; reprinted intergovernmental vol. 2, pp. 17-20, ofthedebate, see Gazzo, Towards EuropeanUnion, 68. For an account 27, 30, and41. citedinGazzo, Towards Union, vol. 2, p. 104.See also European 69. Parliament resolution; issueofthe and twoassociates madein theinaugural statement of Spinelli theprogrammatic vol. 1, pp. 11-17; Union, andreprinted inGazzo, Towards European "Crocodile"newsletter
and De Ruyt,L'acte unique europ&en,p. 85. 66. De Ruyt,L'acte unique europ&en,p. 56.

market like program, groups. The internal Transnationalbusiness interest

fortheearlyEuropean of the lack of activeelitebusinesssupport 70. For a discussion active business interests chap.5. Transnationally ofEurope, initiatives, see Haas, TheUniting in a later section ofmyarticle. at thedomestic level,as outlined mayhavehadan effect ofMarket Plan," p. 24. 71. Krause,"ManyGroups Lobbyon Implementation

46 International Organization ginning of thepath-breaking French and thediscussions presidency of the Dooge Committee werewellunderway. But a fewbusiness groups, such as UNICE, hadbeenpushing for liberalization for a longtime. vainly Given their whatneeds to be explained is whygovernments persistence, finally listened. dinary political skillare notin question. Cockfield and Delorsactedon the margins to broadenthe WhitePaper and the SEA, and theymay have to theremarkable contributed at theintergovernspeedofdecision making thebroader mental conference. outlines of bothdocuments Nevertheless, wereproposed, and approved, often in advanceofCommission negotiated, initiatives, bytheheadsofgovernment themselves. Indeed, thebreakthrough in the relaunching of the EC had already occurred before Delors became president Thecausality oftheCommission. ofthesupranational explanation is thusreversed: theselection ofa prestigious politician forthepresidency was merely a symptom of mounting trilateral forreform. In this pressure Delors'actions regard, ironically as Finance Minister enough, ofFrancemay havecontributed moreto theSEA thanthoseas president oftheCommisIt is worth dwelling fora moment on theintergovernmental longer conforthisis thepointat which ference, thesupranational institutionalist hypothesesabout Commission influence might appearmostplausible.Four can be advanced,butnonesuggests specific arguments thatsupranational thesubstance actorsinfluenced oftheSEA. First, theremarkable speedof theconference be attributed, at leastinpart, might to theroleofDelorsand the Commission in proposing and revising the specific wording of treaty amendments. While from theCommission logistical support indeed may have hastened a final thereis little agreement, evidencethatit altered its substance. theCommission be credited with might Second, having quietly slipped some new EC functions, such as environmental and research and develintotherevised opment Butthesewerefunctions programs, treaty. that the EC had been handling under indirect authorization fora number of years, and there was little from member statesto extending opposition a concrete mandate in late September to coverthem. and earlyOctober1985, Third, Delorsdropped and social reform strong advocacyof monetary and chose to stress thelinks instead between internal market reform, majority voting, in structural and the increases funds neededto gainsupport from Ireland and the Southern countries.72 Delors' conciliatory move,particularly the proposal forstructural a political funding, mayhavefacilitated compromise, buthis position on theseissues was nonetheless closelycircumscribed by theviewsofthemajorstates. Thisis particularly true inregard to monetary
72. FinancialTimes, 9 October1989.1 am indebted to PeterLudlowforsuggestions that thishypothesis. helped sharpen

International political leaders. Cockfield's boldness and Delors' extraor-

sion.

Act 47 SingleEuropean reform from thepackage, as Delors' elimination ofmonetary where policy, ofdomestic Fourth thedirect pressure officials. we haveseen,resulted from be seen as a keyact of agenda White Papermight and finally, Cockfield's to a mandate from themember ButtheWhite setting. Paperwas a response thepaper,and commissioned statesexpressed bothin theCouncil,which In previous theComin theinterim oftheDooge Committee. years, report threehundred itemsas partof mission had proposedmanyof the nearly had simply them. butgovernments rejected various reform proposals, notfrom his to theprocessresulted Delors' mostimportant contributions but instead from his keen awareness ofunforeseen policies roleas an initiator under which he was acting. A reexamination of constraints oftheextreme from his tone) stress (as distinct his memoirs revealsthathis arguments rather thanpersonal Procedural influence.73 intergovernmental constraints down a substantive he reasoned, wouldgetbogged reform without program, a planforEuropean union inideological battles oversovereignty; monetary ofthegovernors ofthecentral wouldencounter theopposition banks, who, an expansion hadjust rejected of theEMS; and Euled by theGermans, within was neither thecurrent of competence ropeandefense cooperation The sole remaining amongmember states.74 theEC norwidely supported In this Delors'most statesmanlike wasinternal market reform. regard, option theproper moment to compromise-ashe didin Sepjudgments concerned tember and October1985.75
and neofunctionalism Supranational institutionalism

moNone of the threesupranational variables-Europeaninstitutional and international transnational businessinterest groupactivity, mentum, and process forthetiming, content, political leadership-seems to account did notbargain of negotiating the SEA. Moreover, by "upgovernments issuesbut,rather, byaccepting thecommon interest or bylinking grading" thelowestcommon backedby thethreat of exclusion. The denominator, to extend resulting bargain places majorobstaclesin thepathof attempts thereform to newissues,suchas monetary policy. fortheSEA is their In thisregard, one striking aspectofthenegotiations Evenregional for theECSC andEC inthe1950s. to thenegotiations parallel to acceptthatthefounding of theECSC theorists are inclined integration thatonce butthey contend was an extraordinary act ofpolitical statecraft, itsparked a qualitatively different andpotentially self-sustaining itoccurred
73. See Delors et al., La France par l'Europe, pp. 49-50. 74. InterviewwithJacques Delors, Cambridge,Massachusetts,22 September1989. See also Calingaert,The 1992 ChallengefromEurope, p. 9. 75. The initialdraftamendmentssubmittedby the Commission to the intergovernmental (except on the powers of the Parliament),a conferencewent far beyond the finalsettlement factwhichhardlylends credence to Delors' claim thathe foresawall in January1985. But this the agenda, whereaggressivenessdid pay dividends. Delors' skillin setting may underestimate

48 International Organization The negotiating oftheSEA, however, suggests processofspillover. history a greater to thatthreedecades laterthefactors encouraging commitment thesame:theconvergence ofnational interEuropean unity are essentially idealism of heads of government, and thedecisive ests,thepro-European states. roleofthelargemember intheSEA negotiations Theimportance ofinterstate bargains is consistent of the EC sincethemid-1960s. withthebroader experience Europeaninitproceeded andincrementally; infits didnotproceed and tegration steadily in 1966,theEC has sincetheLuxembourg starts. Moreover, compromise decisionmaking cenmovedtowardintergovernmental ("state-to-state") thantoward rather increasing teredin the Counciland summit meetings, bodiessuchas theCommission andParliament.76 for international authority thesystems intheEC has infact concluded that One detailed study change thanHaas predicted.77 and less technical While to be morepolitical proved to prompt and forward the spillover linkages may in some cases suffice undera specific of international decisionmaking mandate intensification a givensector, rolein theprocessesofopening within they playa minimal and ratifying theaccesnewissues,reforming decision-making procedures, intheseareasrequires Movement activeintervention sionofnewmembers. amount of nontechnocratic interstate by heads of stateand a considerable

thatin the 1980s, The SEA negotiations suggest, furthermore, just as in businessgroups wererelatively at inthe 1950s,pan-European ineffective fluencing policy.78 Business,at leaston thesupranational level,was mobiinterstate forreform, thanthe reconsensus rather lized by theemerging verse.Thiscastsdoubton at leastone mechanism underlying thelong-term of neofunctionalism-namely, thatovertime, historical prediction growth ofsupranational intheautonomy andresponsibility actors andorganizations willfacilitate further integration.
institutionalism Assessing intergovernmental

bargaining.

The historical the importance of the threeelements recordconfirms of institutionalism. theseelements canbe considered intergovernmental Again, in turn. Heads of government and their Intergovernmentalism. direct represenThe result tatives carried outthenegotiations. represents theconvergence
Institutional 76. See JulietLodge, "EC Policymaking: Considerations," in Lodge, The European Community and the Challenge of theFuture,p. 28; and Taylor, The LimitsofEuropean Integration, chaps. 3 and 10. 77. Leon Lindbergand StuartScheingold,Europe's Would-BePolity:Patternsof Change in the European Community (Englewood Cliffs,N.J.: Prentice-Hall,1970). 78. For a discussion of the role of business groups in the 1950s, see Haas, The Unitingof Europe, p. 353.

Act 49 SingleEuropean The dominance states. inthelargest member ofdomestic preferences policy ofcases (with by the lack clearly is revealed most largest states three ofthe in whicha rights) of theDanishstandon workers' thepossibleexception The Southern initiative. initiated or vetoeda central nation either smaller of a sideand Irelandwere appeased en masse withthe promise nations Benelux countries structural funds; the in the form of increased payment thantheothers. The election in any case to go further had been prepared in theshift in Britain and, moreimportant, government of a Conservative on points in 1983werethekeyturning preferences policy economic French theroadto 1992. to amendthe whether concerned bargaining lowest-common-denominator On market matters. on internal voting majority ofRometo promote Treaty to convenean pressure yieldedto Franco-German the British thispoint, at leastin partbecausetheFranco-German conference, intergovernmental As PaulTaylor hasobserved, ofexclusion. was backedbythethreat position inthegame.A measure ofcompromise ofstaying andthat interests, specific thelatter."79 Nonetheless, given toachieve necessary intheformer [became] ofsystems characteristic change bargaining thelowest-common-denominator with the weremostsatisfied thattheBritish in theEC, it is notsurprising a fundamental revision of successin negotiating final Thatcher's outcome. can be viewed to theEC budget thenetobligations therulesforcalculating accession. over the terms of British negotiations as the end of extended a Franco-German represented acquis communautaire While theagricultural balanceof thenewtrilateral reflected moreclosely deal,thenewagreement institutional also succeededin limiting the EC. The British powerwithin issues.80 market reform to internal oftheinstitutional reform The steady narrowing Protection ofsovereignty. is restricted in which to internal position voting majority to a "minimalist" andthefuture is limited, oftheParliament spillover thepower market policy, theenduring preocpolicyis blockedconfirms to areas such as monetary and control ofall three sovereignty maintaining majorstateswith cupation in thescope of EC activities. overfuture changes
and domesticpolitics Internationalinstitutionalism "British diplomacy . . . had to balance two objectives: that of satisfying bargaining. The only major exception to Lowest-common-denominator

based on the relative powerof Whilethe intergovernmental approach, national policypreferences, of their member statesand the convergence
inthe1980s,"p. 3. ofEC Integration "The New Dynamics 79. Taylor, Comin theEuropean and Multilateral Negotiations Trilateral 80. See Wallace,"Bilateral, negotiating on theBritish discussions I amindebted toHelenWallacefor pp. 158-59. munity," position.

50 International Organization it raisesa second, offers a satisfactory accountof the SEA negotiations, national policy preferences equallyimportant question: Whydidunderlying in time? As indicated earlier, partoftheanswer can converge at thispoint be found in the domestic of France,Germany, and Britain. Four politics autonomous actionbypoparadigmatic explanations can also be identified: support from centrist colitical leaders, pressure from statebureaucracies, a alitions, and pressure to replacefailedeconomicpolicies.Each offers rootsof Europeaninpromising starting pointforanalyzing thedomestic tegration, butnoneis entirely satisfactory. the views, eitherpropreferences in the mid-1980s may have reflected leadersofthetimeEuropean or neoliberal, of thethree majorEuropean close associates.The history of Mitterrand, Kohl,andThatcher-andtheir in the threelargest thatheads of government member the SEA suggests from statespossessedconsiderable domestic bureaucracies, poautonomy at leastin theshort run. litical parties, and interest groups, of the In 1984,Mitterrand's personaladvocacy,againstthe opposition to ofhisownparty, gavea decisive impetus Quai d'Orsayandtheleft wing ofMitterrand's shuttle theimportance stressed Delorshimself reform efforts. KohlandThatcher sixtimes eachwith Mitterrand met that diplomacy, recalling inFrancewere alone.The keydecisions his 1984Council during presidency a quatrewith Dumas,Delors,andtheFrench madeinmeetings Mitterrand, Affairs.8' Minister of European Kohl and Mitterrand viewed and de Gaullebefore them, Like Adenauer In thissense, as partofa geopolitical economic grand strategy. integration from French initiatives fortheEC could notbe separated Frenchsupport conventional coordinated inareassuchas armaments defense, coproduction, inviewing German Kohlfollowed Genscher andnuclear strategy. Similarly, for German unification fortheEC as an indispensable support precondition within framework.82 a pan-European was as important as Mitterrand's effort Thatcher's roleinthereform role, Obstaclesto reform stemmed from moreambivalent. somewhat though toconstrain crusade Thatcher's European bureaucracy, particularly personal themore sentiments inthesocialandmonetary pro-European areas,despite and a majority ofherownparty. On the advisers ofherclosestcivilservice neoliberalism lenttheSEA muchofitssubstance. other hand,herextreme
1989. with Delors,22 September 81. Interview 68 "The Once and Future German Foreign Affairs Question," Burley, 82. See Anne-Marie to the that the1992 initiative is a response pp. 65-83.Somehavesuggested (Winter 1989-90), Baron, Europe92: Le rapt Enrique See, forexample, threat ofa U.S.-Sovietcondominium. Bernard Coutas,1989). Sandholtz (Paris:Editions 92: Therapeofthefuture) dufuture (Europe was a that renewed European integration with little evidence, though and Zysman speculate, for weredependent response to thedeclineof theUnitedStates,on whichthe Europeans andZysman, "1992," p. 96. technology. See Sandholtz

Statism: the autonomyof political leaders. The convergence of policy

SingleEuropean Act 51 current viewstoward and Thatcher, European In thecase of Mitterrand heldfordecades. In thecase of Cockfield, Rounification reflect positions workpositive experiences support mayalso reflect card,Delors,andothers, and within EC institutions. ingwith of European evolution policymaking. craciesis suggested by thelong-term was accepted, theEC has Since 1966,whentheLuxembourg compromise ofinternal an intergovernmental decision cenmaking, style institutionalized ofnational membureaucrats, in theCouncil.Committees consisting tered (the Councilof bers of permanent delegations (COREPER), or ministers inBrussels andinteracted an increasthrough havemetregularly Ministers) and specializedmodeof decisionmaking. By the early ingly cooperative thetraditional a cleartrend had emerged ofconpractice awayfrom 1980s, in state and toward ministries each specialization European sulting foreign ministries in theCouncil.Whiletheforeign tended to be susof functions mechanisms through suchas or pooling sovereignty piciousoftransferring have often been strong supthe bureaucratic specialists majority voting, of Europeaneconomicintegration. Thus, increased specialization porters a steady increase inmajority with tendecisions voting, may haveencouraged and1974, between basedonqualified between 1966 thirty-five voting majority between 1979and 1984.In thissense, 1974and 1979, and morethanninety "a return on investments out,theSEA represents as HelenWallacepoints a setofcommon norms for years"in developing madeovermany previous Councilnegotiating.83 in EC negotipolitics view,thisevolution According to thebureaucratic at home.That is, as technocrats have atingmayalso have had an effect the national leadershave increasingly normsof cooperation, internalized At a number of pointsin thenegotiating supported Europeanintegration. bureaucracies of the SEA, forexample,domestic appearto have history theviewsofheadsofgovernment, mostnotably when intervened to change Thatcher tojointheintergovernmental convince conBritish officials helped ference. thebureaucratic has sevLikethestatist explanation politics explanation, that indomestic eralweaknesses. both overlook theevidence changes First, facilitated or frustrated the efforts leadersto of national political support further Neither national Europeanintegration. implement policiesfavoring leadersnorbureaucracies autonomy. Second,bothof the enjoycomplete failto offer a plausible accountof thestop-and-go processof explanations overthepasttwenty explanations years.Technocratic European integration and thestrong overlook evidenceof the splitsbetween bureaucracies opto thedilution of national sovereignty through position among top officials
Multilateralism Work,"p. 6. 83. Wallace,"Making

of bureauBureaucraticpolitics: the role of technocracy.The importance

Organization 52 International autonof theseexplanations, But despitetheweaknesses voting. majority retained be should of state or bureaucrats heads by making omousdecision rootsofpolicyiniin future research on thedomestic as a nullhypothesis in theEC. tiation theroleofpolitical policiesstresses ofnational fortheconvergence nation in Europeanafhave someautonomy Whileheads of government parties. that coalitions inthisview,bytheparty support are constrained, they fairs, issue forthevotersof thethree their rule.Since Europeis a low-priority to posit a mechanism by which states,it is implausible member largest electoral initiatives toseekdirect except advantage, launch policy politicians thus elections. integration before European European immediately perhaps ofnational theevolution ofconceptions Nonetheless, remains an eliteaffair. overEuropean policy, splits overtimeand thekeyroleofpartisan interest in 1983and theimporturnaround by thedecisiveFrench as demonstrated theautonthat suggest forneoliberal policies, Torysupport tanceofBritish a Europeanpolicymaybe conin pursuing omyof heads of government base. their domestic partisan strained by eliteswithin have those ofthecenter-right, particularly Overtheyears, centrist parties, to further whilethe strongest opposition EC reforms, tendedto support spectrum. of theideological has been locatedon theextremes integration thecore Democratic provided parties At thefounding oftheEC, Christian Over the years,Germany's forEuropeanintegration. of partisan support whichpivotson allianceswiththe propartysystem, center-weighted forEuropeanintesupport constant generated EuropeanFree Democrats, Market in 1968and Britain's oftheCommon Sincethecompletion gration. market liberalizaa reform packageofinternal however, accessionin 1973, of an anti-ECparty was blockedby thepresence voting tionand majority thefarleft (the In the1970sand early1980s, inat leastone ruling coalition. the West German Greens,the FrenchCommunist British Labour party, remained ofecosuspicious Socialists) and themoreradicalFrench party, oftheBritish wing whilethefarright (theThatcherite liberalization, nomic of Jean-Marie Le Pen in and the party the Gaullists Conservative party, ofnational sovopposedthedilution Republicans) France,and theGerman theScylla a narrow hadtonavigate passagebetween The SEA thus ereignty. and theCharybdis of conliberalization to economic offarleft opposition reform. to institutional servative opposition in ruling of centrists coalitions created thedominance In themid-1980s, and the shift to the The electionof Thatcher a rareopening forreform. inearly altered 1983 dramatically Socialist oftheFrench party moderate wing in overa decade,ruling time coalitions thepolitical landscape.For thefirst committed to ofEuropewereideologically ineach ofthethree majorstates in economic liberaldomestic policiesand werealso committed, relatively
explacoalitions. A morepromising Partisan support:the role of centrist

SingleEuropean Act 53 varying degreesand fordiversereasons,to liberalization of theEuropean market. inBritain IftheLabourparty hadheldpower orifeither theGaullists had heldpowerin France,reform or theCommunists wouldhaveencountered bitter opposition. The SEA still hadto satisfy British complaints about agricultural policyand surmount Thatcherite opposition to institutional reform. The first obstaclewas overcome ofbudget reform and by thecarrot the secondby the stickof threatened exclusion. The partisan support exthus planation accounts for thehigh levelofinternational conflict overbudget andinstitutional as compared with thelow levelofconflict reform, overthe central liberalization. substantive agenda of market Yet thisexplanation nonetheless withthefollowing sharesseveralweaknesses explanation, as discussed below. inthemajor policy preferences states European mayalso haveresulted from thefailure of purely national strategies of economic policy, whichcreated orlegitimated for coordinated liberalization attheEuropean pressure level.84 to thestatements of Europeanleaders,theplanformarket According libto thedeclining eralization industrial comby 1992was in parta response ofEurope.In thelate1970s andearly1980s, petitiveness "Eurosclerosis"thecombination ofpersistent lowgrowth ratesrelative high unemployment, in theOrganization to thoseof other forEconomicCooperation countries and Development declinein international (OECD), and long-term compettheUnited StatesandJapan inhigh-technology itiveness vis-a-vis industries and telecommunications-was suchas electronics as an widely interpreted ofpolicyfailure. indication In the1970sandearly1980s, theeconomic difficulties ofBritain, France, and Germany be attributed could ostensibly to problems common to all suchas disruption from thetwooil shocksand theneed OECD countries, fortight monetary policiesto combatinflation. French By 1982,however, and German economic thatof the behind performance laggedsignificantly in economicperformance UnitedStatesand Japan.85 This relative failure undermined thelastexcuseforslowgrowth. theBritish After in experience with themid1970s, theGerman experience internationally coordinated rein 1977,and the Frenchexperience with"Keynesianism flation in one reflation was no longer credible. The business-labor country," on bargains and incomes which corporatism policyare based weredisintegrating.86 intopressure Poor economic for performance mayhave been translated at leastthree notmuinternal market liberalization through distinct, though
" 1992,"p. 109. 84. Sandholtz and Zysman, 85. I am indebted to conversations with Geoffrey Garrett, whoencouraged me to develop thisargument more precisely. the1990s: A Three-Pronged inWolfgang 86.Manfred Wegner, "Preparing Strategy," Wessels

Economic functionalism:the role of policyfailure. The convergence of

and ElfriedeRegelsberger,eds., The Federal Republic of Germanyand the European Com-

munity (Bonn:EuropaUnionVerlag, 1988), pp. 115-24.

54 International Organization The first tually exclusive, mechanisms. is electoral. mechanism Although European integration itself is rarely an issueofelectoral importance, leading politicians in advancedindustrial democracies facea structural imperative to provide steadyeconomic on whichelectoral growth, success often depends.Growth requires constant which inturn is stimulated investment, by market business confidence. Internal reform can thusbe seen as a way to and stimulate investment generate business confidence market byremoving With other The secondmechanism is ideological. economic policiesdisturned theAmertonewideas,particularly credited, European governments The idea ofcreating an internal ican and Japanese modelsofdevelopment. market Stateswas one ofthefewuntried thesize oftheUnited policies.It whentiedto firm-led seemedparticularly attractive high-technology cooperation on theJapanese programs patterned model,such as ESPRIT, the EuropeanProgramme for High Technology Researchand Development inAdvanced andDevelopment Communications (EUREKA), andResearch the idea of economicrenewalthrough economies (RACE). Moreover, of the scale and industrial underlies initiative and reflects 1992 the flexibility that newsupply-side was sweeping andprivatization orthodoxy Europeduringthisperiod.88 The third mechanism involves sectoral or firm-level business pressure at thedomestic as tradeand investment level.89 In general, interdependence increase, theseinterests growstronger. Specifically, themorecompetitive a given firm orsector andhencethegreater thelevelofnetexports orforeign within theEC, thegreater investment, particularly is thelikelihood that the firm or sectorwill support internal market liberalization." Moreover, as sectors andsensitive becomeglobalized tocompetition from outside theEC, the UnitedStates and Japan,liberalization from particularly mayappear theeconomies ofscalerequired tocreate necessary to compete effectively.91 The greater thepotential forcommon gainsvis-a-vis non-ECcountries, the greater is the incentive to bear the costs of adjustments to liberalization within Europe. Thissortofsectoral logicmight also be usedto explain theinitial bargain In theearlyyearsof theEC, Germany uponwhichtheEC was founded.
Boltho, ed., The European Economy: Growthand Crisis (Oxford: Oxford UniversityPress,

barriers.87

87. See Charles Politics andMarkets (NewYork:BasicBooks,1977); Lindblom, andAndrea

of 1992: An Assessmentof the Potential Economic Effectsof Completingthe InternalMarket of the European Community (Luxembourg: EC, March 1988).

1982). 88. EC Commission, for Directorate-General Economic andFinancial TheEconomics Affairs,

89. This hypothesis shouldbe clearly thesupranational from distinguished institutionalist hypothesis thatpressure from transnationally business organized interest groups was an essential precondition fortheSEA. Trade(Princeton, N.J.:Princeton University Press,1988).
90. Helen Milner,ResistingProtectionism: Global Industries and thePolitics ofInternational 91. Keniche Ohmae, Triad Power: The Coming Shape of Global Competition(Singapore:

McKinsey, 1985).

Act 55 SingleEuropean muchof which shareof thebudget, a disproportionate agreedto finance agricultural efficient to itsrelatively ofsubsidies to Francein theform went forindustrial liberalization goods,in which formarket in exchange sector, would support advantage. Today,British enjoyeda comparative Germany while German sectors, and business service thefinancial from be expected and capital-goods exporters. woulddrawon industrial support explaand the support partisan explanation functionalist The economic set forth two explanations nationare both moreplausiblethanthe first a functionalist as well.Neither these accounts Yet anomalies plague above.92 for internal French support seemstoexplain approach sectoral nora partisan analoconstituency Franceappearsto lack a natural market liberalization. financial services.And ifthe 1992inior British industry gous to German instruwas a mostunlikely Mitterrand conspiracy, was a capitalist tiative inexplaining also facesdifficulties functionalist approach The economic ment. changein areas other statesforinstitutional in somemember thepressure theactivities however, Despitetheseanomalies, market policy. internal than for partiesshouldserveas a springboard of interest groupsand political further inquiry. nota supplement for analysis, is a precondition systemic analysis Domestic variancein statepolicy cross-national of significant to it. The existence further research intothe doinvites strategies and diplomatic preferences of international Yet mosttheories mesticrootsof Europeanintegration. of dohave neglected the problem theory, including regime cooperation, interests instead to specify by asoften electing interest formation, mestic interests based theories ofstate toexclude is meant Noneofthis sumption.93 and social interdependence. on international processes,suchas economic a mechanism-a"transmission offers politics least,domestic Butat thevery traditionraisesmany questions ofintegration invariably domestic theories actors take Which domestic politics: ofcomparative bystudents allytreated state Arethey liberalization? economic and opposing thelead in promoting
92. Sandholtzand Zysman attribute the SEA to a wide variety offactors,including economic elements policy failureand the decline of the European left(which seem the most promising of theirexplanation)as well as the transition fromAmericanto Japanese leadershipin hightechnology development, the changing global security environment, Commissionactivism,and pan-European interest group pressure. See Sandholtz and Zysman, "1992." betweendomestic 93. See Keohane, After Hegemony,p. 6. For a discussionoftherelationship interests and the broader categoryof "liberal" theoriesof international relations,see Andrew Moravcsik, "Liberalism in International Life," chap. 8 in "The Roots of European Economic and Robert Keohane, "InterCooperation," Ph.D. diss., Harvard University,forthcoming; nationalLiberalismReconsidered," in JohnDunn, ed., TheEconomic Limitsto ModernPolitics (Cambridge:CambridgeUniversity Press, 1990). For a discussion of the problemsinvolved in interests specifying by assumption,see AndrewMoravcsik, "DiscipliningTrade Finance: The International OECD ExportCreditArrangement," Organization 43 (Summer1989),pp. 441-45. 94. For this phrase, I am indebted to a seminarpresentation by Robert Keohane. For a and domesticfactors, typology oftheoretical approaches thatcombineinternational see Andrew Moravcsik, "Internationaland Domestic Theories of International Relations: A Theoretical Introduction,"in Peter Evans, Harold Jacobson, and Robert Putnam, eds., Diplomacy and Domestic Politics: Two-Level Games in WorldAffairs, forthcoming.

intopolicy.94 Testing impulsesare translated belt"-by whichinternational

Organization 56 International How do they or societalactors?How do theyperceivetheirinterests? Future economy? Whatis their to theworld relation one another? influence on inconnect theliteratures willnecessarily on thesequestions research world and state-society relations in an interdependent cooperation ternational economy.95 Conclusion:the SEA in perspective a coherent and comremains thesole attempt to fashion Neofunctionalism ofEuropean The standing ofneofunctionalist integration. theory prehensive ofthestanding ofthe is a laggedfunction scientists amongpolitical theory as in the 1970s, EC in the eyes of Europeans.Whenthe EC stagnates, of regional whenit integration speakof theobsolescence theory; scholars as in 1985,theyspeak of the obsolescenceof thenation-state. rebounds, consigned we read today,has been "unjustly theory, integration Regional to thedustbin."96 that inthesestatements, progthenotion, Thisarticle implicit challenges It all theclaimsof neofunctionalists.97 supports ress in theEC necessarily a particular variant of neofunctionalism, and rejecting does so by testing rests that international which ontheargument institutionalism, supranational a vital and increasing role transnational interest play groups and institutions The intergovernmental approach proposed as integration progresses. here, in roleto supranational institutions accordsan important institutionalism, as the renewed inteinterstate foundation for bargains cementing existing lies in the that theprimary sourceofintegration Butitalso affirms gration. and the relative to powereach brings of the statesthemselves interests the intergovernmental approachdemBrussels.Perhapsmostimportant, is incomplete, thusclearing theground that eventhisexplanation onstrates ofEuropean theinternational domestic further into implications for research politics.
Governingthe Economy; Peter Gourevitch,Politics in Hard Times: ComparativeResponses

see Hall, economy, relations in theworld workfocusing on state-society 95. For previous

enstein, Small States in WorldMarkets (Ithaca, N.Y.: Cornell UniversityPress, 1985); and

Crises(Ithaca,N.Y.: Cornell University Economic to International Press,1986);PeterKatzPowerand Plenty Press, University ofWisconsin (Madison: PeterKatzenstein, ed., Between 1977). manuunpublished Keohaneand Stanley Hoffmann, "EuropeanIntegration," 96. Robert "The andWolfgang 1989.See also RoyPryce November Wessels, Harvard University, script, in Pryce,TheDynamics forAnalysis," of Searchforan Ever CloserUnion:A Framework havetraditionally beenpessimistic. Fora contrast whostress power andinterests 97.Analysts viewsin the 1960sand 1980s,respectively, see thefollowing of pessimistic and optimistic and the or Obsolete? The Fate oftheNation-State "Obstinate Hoffmann: articles by Stanley on the and "Reflections 1966), pp. 892-908; Case ofWestern Europe,"Daedalus 95 (Summer Market Studies21 (Septemof Common in Western EuropeToday," Journal Nation-State ber-December 1982), pp. 33-35.

European Union, pp. 1-34.