w 109 long-run economic aspects of the european union's eastern ...

LONG-RUN ECONOMIC ASPECTS OF THE EUROPEAN UNION’S EASTERN ENLARGEMENTgenerated by an ill-conceived design of directives by the Council. In networkindustries,the Commission often regards liberalisation as a gradual process, to beimplemented in stages, thereby accepting and indeed proposing very partialliberalisation directives that are bound to induce non-compliance. A notoriousexample are the two telecoms directives of 1990 (ONP and a liberalisation of theservices directive). Sun & Pelkmans (1995) analyse in detail the extremely negligentbehaviour of practically all Member States. The authors argue that theimpossibility for market players to base any strategy or investment on thesedirectives even three years after they went into force implies that Member Statesmust give up their discretion and pursue greater centralisation. National regulatorydiscretion under subsidiarity must be ‘earned’ by the Member States. If it issquandered or misused, the common goal suffers and logic commands a higherdegree of centralisation.70The problem returned in a different guise during the telecoms liberalisation of1998. To mention only one example, it was predictable that the licensing directive(97/13) gave far too much discretion to the Member States, given the long historyof difficulties between the Commission and the Council in this respect (see Pelkmans& Young 1998). In the recent telecoms review 14 , the unsurprising conclusionis that liberalisation is successful at the Member States level, but that there is nosingle market yet. But it is the single market that forms the legal basis to liberalisein the first place! Therefore, initially at least, a central telecoms regulator at Unionlevel would have been able to compensate for the too great a discretion of MemberStates and could have intervened instantaneously. Lacking such an agency, theinternal market suffered.This brings us to a general point about agencies. One institutional reason why EUagencies remain as weak as they are, if they get initiated at all, is that the 1958Meroni case has severely restricted the possibilities to delegate powers from EUinstitutions to ‘independent’ agencies. This has created yet another all-or-nothingsituation, which should be circumvented. The only independent agency nowadaysis the European Central Bank, made possible via ratification of a rewrite of thetreaty.It is recommended that it should be made easier (though not easy) to establishindependent agencies at the EU level. This can be done as follows. The current IGCshould propose a simple article in the treaty that permits the Council and the EP toestablish an independent agency, with supervisory and/or regulatory powers. TheCouncil could vote with unanimity, for example. But the burdensome road ofratification is avoided, because the mere idea of having to do this already kills anyinitiative of an independent agency before it is proposed. Note that this is not aplea for heavy’ centralisation. Also, agencies can ‘die’ via sunset clauses. Surely thetelecoms regulator could have been given a lifespan of no more than five years. It isnot difficult to find examples where circumvention of the all-or-nothing problemwould help devise better agencies, and hence reduce non-compliance. Consider the