Decision making, policy formation and

lobbying in the EU: Functioning,

challenges and tensions

Maastricht University

School of Business and Economics

Maastricht, 28th October 2016

Name: Felipe Valle

Student ID: I6141290

Exchange Student Bachelor Programme

Course: Business and Politics in Europe, EBC2051

Tutorial Group 8

Tutor: Ewa Mahr

Exam paper

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The EU can be considered as the final consummation of a diversity of
projects of union and integration that has characterized Europe through
history. The importance of decision making inside this institution has
been crucial to understand how different international issues are
assessed through time in Europe and its evolving institutional
understanding. Inside the European Union, each of its institutions has a
specific role in the legislative process, then it tries to understand how
their decisions are influenced by interest groups and different
organizations, understanding the current importance of private actors,
consumer unions, NGOs and differing organizations to European Union
corpse (135-138, 135). Given the interaction between business interests
and the EU institutions, this paper addresses how is decision making in
this institution functioning given the business and civil organization
influence on its policy formation and its challenges and tensions as its
well-known international importance.

This paper is structured as follows: In Section I decision making process

in the EU is described and deeply analyzed. Understanding the role of
the actors involved in EU policy area, lobbying is studied from interest
groups perspective in addition to coalition formation behavior and
recent evidence from two different companies. In the following section,
Section II, a brief analysis of the simulation about EU decision making
and lobbying is discussed, understanding its most relevant features.
Defining the previous background, current situation, challenges and
tensions in the EU are studied in the Section III. Finally, a conclusion is
made in Section IV.

Section I: Decision making in EU and actors involved

Since the Maastricht Treaty (1992) and the Amsterdam Treaty (1999),
the ordinary legislative procedure became the central legislative
procedure of the European Union, putting the European Parliament and

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the Council of the European Union on an equal footing in the adoption of
legislative acts (as in a wide range of areas) (Legislative powers paper).
This decision-making system roughly consists in Parliaments agreement
with the Council on which the parliamentary committee can review and
amend the report presented by the Commission and drafted up by a
Member of the European Parliament. By this way, laws are adopted at a
European level.

EU legislative process at a European level, however, does not consist in

an independent and arbitrary decision of the existing authorities.
Instead, in a complex and consequential resolution in which according to
Bouwen (2002), there is a constant interdependent relationship between
EU institutions and private actors. Indeed, different organizations,
corporations, and groups seek for gaining access in the EU legislative
process to influence the legislative process to their own interests. On the
other side, EU institutions need and demand critical resources that are
essential for fulfilling their own functioning (369 Bouwen).

How is this resource dependence carried through policy decision

making? Private actors and organizations concerned with their
organization form lobbying, to establish an exchange relationship with
EU crucial actors. Specifically, they target specific institutions to which
they provide the critical access good or goods provided to an EU
institution that grants access for easing influence in the legislative
process (Bouwen 370). Some interest groups are more successful in
achieving their policy preferences, where the interest groups influence
attainment are affected by the environment in which proposals (or their
access goods) are formulated (Bunea 552).

Analyzing the factors and groups organizational structures involved in

the achievement of EU policy influence, Bouwen (369) recognizes three
main kinds of information (access good) provided by private actors that

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are demanded by EU institutions, essential for their own functioning. The
first of them, the Expert Knowledge (EK), concerns the expertise and
comprehension needed from the private sector to understand the
market (369). Particularities and technicalities present in different
organizations and companies are not part of the EU politicians expertise
and regularly need support from private actors knowledge. Information
about the Domestic Encompassing Interest (DEI) and the European
Encompassing Interest (EEI), corresponds to the second and third access
goods of this exchange relationship between private actors and EU
institutions. Both refer to the information needed from the private sector
concerning the understanding of the domestic market sectors and the
European economic arena, respectively (369).

Having said that, firms and private actors must decide whether they will
seek for interest representation at European level by taking individual,
collective, or third party action (an external agent does lobbying for it).
Firms choices will depend on their organizational form of their lobbying
activities (size, economic strategy and their domestic institutional
environment) (373). The complexity of their entitys structure will
channel to the best provided access good and therefore to the most
preferred form of lobbying.

On the other hand, EU institutions will demand information or a kind of

access good that is critical for their formal legislative role. Strictly
speaking, the European Commission, as a promoter of common
European interests, drafts legislative proposals beyond
intergovernmental consensus and requires Expert Knowledge (EK) as a
critical resource for its legislative work (379). Additionally, in view of the
Parliaments legislative role, assessing the legislative proposals by their
impact on a European level requires the European Encompassing
Interest (EEI) for understanding the European economic arena and its
differing sectors (380). Finally, the Council of Ministers, as the most

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intergovernmental institution in the legislative process, reconciles the
interest of the different member states. Having said that, information
about the interests and needs from their domestic markets, or
Encompassing Domestic Interest (EDI), becomes the most crucial access
good for both its executive and legislative roles.

After understanding private actors and EU institutions interaction in the

legislative process, some remaining points are important to address.
Bunea (552) and 136-138 (137) agrees in the importance of the
consultation period organized by the European Commission as critical
instance for influence on the content of European legislation. Indeed, the
ability of proving through lobbying a superlative proposal would lead to
attaining results. As mentioned before, the conformation of European
associations, National associations or individual setting for seeking
access into the EU decision making process, depend determinedly on the
ability to provide access goods. Accomplishing associations in settling
transversal dialogue with the European Institutions, from an integrated
proposal, would build a strong and credible common position (136-138,
138). Consequently, retaining a median position is more likely to be
translated into policy achievements, understanding the consensual
nature existing in the EU policy-making (Bunea 553).

From the perspective of the corporate political strategy followed by firms

and organizations, Hanoteau (2009) illustrates how this decision process
from private actors is influenced by their organizational form, industrial
and market structures, and political and institutional features (34).
Deciding either to have a long-term relationship with policy decision
makers or not, followed by the organization form decision to proceed
into lobbying, build up the setting on which the vector of political
influence is defined through the interaction with legislators (35). Michelin
s Green Tires case highlights the use of lobbying as a non-market
activity to support its corporate strategy. By establishing a long-term

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relationship with EU authorities by both individually and collective
Informational lobbying (persuading authorities about environmental
regulations) (39), Michelin as a private actor gained trust and credibility
that can only be maintained or improved within European institutions by
providing reliable and high-quality information (Bouwen 376).
Interactions reached with EU authorities hold an essential role, while
lobbying campaigns are running consequently. Effectiveness of
strategies, like the one used by Bloom in Deep-sea bottom trawling case
against Intermarch (a supermarket chain), shows that lobbying can fail
even if there are set diverse kind of strategies simultaneously: it does
not competently and convincingly influence the authorities (1116).

Section II: Experience in the simulation

As mentioned before, decision-making process in the EU is a complex

procedure that involves participation of many active members. Private
actor like companies or associations seek for instances of meeting EU
authorities for lobbying, and try to gain access and influence in policy
making of EU legislature. From the simulation experience, power of
convincing these actors based on the credibility they want to transmit
constitute one of the key points for effective lobbying. The ability of
understanding and reconciling with a parliaments member and his/her
political position, the national interest from the Council of Ministers or
convincing the Commission represent their main challenges regarding
lobbying. Expert Knowledge, consequently, requires not only expertise
and know-how of a specific market, but negotiation skills at the time of
dealing with politicians.

From the Parliament side, two features are interesting. First, the ability to
subtract the political perspective of the proposal in discussion, and being
able to traduce it into a position in voting. Secondly, how the coalition
formation is achieved for constituting a majority considering that

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political ideologies may be decided to be left behind in the interest of
making an agreement. In that sense, not deviating from political doctrine
essentials, negotiation skills and knowledge about European level
(Information about the European Encompassing Interest) are important
features of an effective EU parliamentary.

Commissions role in EU decision-making requires the expertise of the

legislation topic in discussion (Expert Knowledge) and the objectivity for
defining which proposal conforms to the more precise and feasible one.
The capacity of the synthesis of information from lobbying and
assessment of simultaneous legislative procedures are critical for best
proposal submission.

On the other hand, the Council of Ministers need to consider national-

members interest that are consistent with their countrys background.
From this it can be seen that information about the Domestic
Encompassing Interest is the critical access good needed for a
competent position.

Consequently, the exchange between access goods in the policy-making

process explained before configures the setting for EU legislative
procedure. It is interesting noticing that given the number of EU
authorities and formal instances for each stage involve in this process
exhibit that EU laws can be enacted within years (in comparison with the
simulation that for academic reason lasted two sessions).

Section III: Challenges and tensions in the EU

After recognizing the main features of the EU institutions in addition to

the decision-making process on which a diversity of actors involved
intervene in the shaping procedure of EU legislation and margins, it is
important to analyze how its development has been in recent years.

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Emphasizing the challenges and tensions that have risen through its
hegemonic administration, it is possible to understand and define the
main paths that need to be followed by this institution in the background
of heterogeneous populations.

According to Spolaroe, full political unification can bring benefits that can
assure economical, institutional, and political reinforcement. However,
advantages involving economies of scale, the ability to internalize
positive and negative externalities, insurance against asymmetric
shocks, and better terms of trade coexist with urgent difficulties
stemming from heterogeneity of its populations, where different
identities, languages and preferences for institutions and public policies
represent a challenge for the governments performance (127). The
European Union specifically, as a supranational body in charge of
decision-making of the member states, has been continually questioned
about its decisions and whether it is a democratic and credible system.
Furthermore, scholars have been discussing if it is an institution that has
formal and social legitimacy for being responsible and representative of
the member states to be governed (73 Copsey).

The contemporary context, given by the member-state and European

level conditions, has been crucial for understanding the main key points
on this subject. The assessment of the current economic and political
phenomena has uncovered the EUs current position, regarding its
reputation and legitimacy. In fact, globalization, The Great Depression,
Brexit and the euro crisis have shaped political discussion, promoting
divergent beliefs within political groups, organizations, and citizenship
about the European Unions role and the direction that the continent is
following.

According to The Economist (drawbridges up), the political division in

European countries has shifted from the known left-right position to the

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more and more between the degree of openness or closeness they
maintain (14). The so-called drawbridge-uppers speak for the supporters
of nationalist ideology, standing for reclaiming control of institutions and
borders from EUs current jurisdiction, and to stem the flow of refugees
and immigration. Recognizing that they pose against their countrys
elites, conceive the presence of a current crisis and security instability
(i.e. the presence of terrorist attacks), have resentment toward
globalization and socio-economic conditions it is outline this eurosceptic
s perspective that, as it is seen in United Kingdom case, it ended up
with Britains decision to leave the EU.

The aftermath of this issue, Great Britain leaving the EU, becomes
significant, as it can be the driving force for more European countries
deciding to leave the European Union where eurosceptics are arising
(Briefing Brexit, 20). Furthermore, as this ideology is increasingly
becoming part of main parties and coalitions, it is likely that they
become mainstream parties themselves (Kriesi 45). It is important to
understand that the accumulation of crises (economic and political) in
the contemporary European context triggers the appearance of the
latent political ideologies (Kriesi 39). The degree of discontent with
European integration, and thereby the EU, differs within regions, but
have been dramatically shaped by the display of international episodes:
The Great Depression and European debt crisis (40).

As a result, how has been legitimacy and credibility of the EU affected in

this context?

Understanding that both aspects are fundamental in any democratic

system including EU, the evidence provided by Copsey reveals the
existence of a democratic deficit of the European Union that is uneven in
nature and different across its different institutional levels (74-75).
Assessing the quality of democracy of the EP by region, the level of

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satisfaction in most citizens dramatically decreased since the Great
Depression, highlighting the role of economic crises on citizenships
behavior (Kriesi 41). As Copsey concludes, it was the economic and
sovereign debt crisis that exposed the weakness of the EUs policy-
making model to the general public at large (Copsey 79).

Following the above, the credibility of the EU perceived at its legitimacy

and trustworthiness implies the voter acceptance of its political agenda,
as well as the ideological worldview and the degree to which they
believe it is a permanent feature of the political landscape (Copsey 90).
The shift in the perceived credibility since the economic crises justifies
the emergence of differing European positions, as eurosceptics and
dissident groups arise. In addition, the political risk permeated in
multinational companies (Schumpeter) imposes EUs regulates European
integration, an even more challenging process (Kriesi 34).

Finally, it has been observed that the EUs institutions face imperative
challenges at a national and European level. The need for political
response in a well formulated political program, a contributive formal
opposition within the EU political system, and the accomplishment of a
quality representation at the member-state level are some of the
awaiting key points to achieve (Copsey 96). Additionally, understanding
the lessons from Brexit gives an idea of the importance of understanding
social background in which social obstacles or elections are present.

Section IV: Concluding remarks

After analyzing the functioning, challenges and current tensions of the

EU in European context it is indisputable to see the difficulties this
institution need to face with. Across and within the nation members
heterogeneity about political ideologies is increasing and becoming a
main issue that authorities need to address. Through an effective policy-
making process that takes into account useful knowledge coming from

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private actors and citizenship, the EU can partly improve European
situation that is currently unstable. Credibility inside the EU is crucial
given the influence it has in a global level. Following the path for
increasing legitimacy is the first step to overcome EU current difficulties.

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