The Marriage Between the Market and Subsidiarity

In the debate over a Framework Directive on SGI, the weak regulatory coalition failed to frame a consistent and pan-European communicative discourse appealing to broad values and able to resonate within national public spheres. The framing of the issue mainly took the form of coordi- native discourse circumscribed to circles of policy makers in Brussels. The Framework Directive was not discussed in the national press or by national political parties, unions or NGOs. Even in Brussels, civil society organizations did not engage with a broad public campaign and debate on the issue. The four debates which took place in the plenary session of the EP on the Commission’s document between 2001 and 2007^[1] are therefore the main instances where discursive exchanges over the issue can be observed. The speeches held in the plenary by MEPs from the main political groups, namely the PES and the EPP, offer good material for analysing how discursive interactions have shaped decision making over time. Deliberation within the EP is of a hybrid nature: debates in the plenary sessions of the EP are directed to the general public, and therefore constitute the archetype of communication discourse which relies on norms and values; at the same time, however, the EP remains fairly remote from national constituencies. Debates among MEPs often tap into coordinative discourse grounded in sophisticated cognitive arguments and aim to reach various epistemic communities and decision makers involved in policy formulation. In this debate, it appears clearly that the former was much thinner than the latter. With regard to the State-market regulation axis, the invocation of the general interest was the main normative frame used to argue for the need of EU regulation of SGI, while the market frame proved to be a much more powerful. Notwithstanding, most of the debate focused on cognitive arguments related to the EU-Member States governance axis through frames such as subsidiarity and the opposition between sectoral and horizontal regulation.

As demonstrated in the previous chapter, the involvement of the EP is key component of the institutional setting for actors resisting liberalization and marketization policies by providing a supranational channel and an arena for mediating contention. The section shows how the support of the EP has decreased over time as the framing through the market and subsidiarity has progressively prevailed over that in terms of general interest. The struggle between sectoral regulation and a horizontal regulation

(a Framework Directive) interestingly shows that the institutional constraints—such as the role of national policy traditions or the sectorizing of EU policy making—do not mechanically shape coalition formation. Rather, they are constructed discursively by actors and underpinned by their ideas about the relations between the respective role of the State, the market and the EU.

While the conservatives of the EPP are relatively favourable to the possible adoption of a Framework Directive in the discussions of the Langen report in 2001, their position changed over time towards a firm and durable opposition. The debate over the Rapkay report in 2006 represents the climax of the debate over SGI. The session was particularly long with a significant increase in the number of MEPs taking the floor (47 in 2006 as opposed to 28 in 2004 and 27 in 2007). This debate took place only six months after a compromise was found over the Services Directive in February 2006, and the conservatives made clear that this compromise clearly contradicted and prevented the project of adopting a Framework Directive.^[2] The discourse emanating from both groups shows a tension between the role of the market (and the fact that SGI belong to the realm of the market and cannot be simply extracted from it), on the one hand, and the need to protect general interest, on the other. However, logically, framing in terms of general interest and the European social model were more present in the discourse of the PES, while the market frame is more salient in the speeches held by EPP members. Accordingly, references to a Framework Directive are to be found more frequently in the speeches of the former than in those of the latter, but both groups discuss the relevance of the sectoral approach to similar extents. Furthermore, the theme of subsidiarity is raised more by the conservatives than the social democrats (although it is far from ignored by them). Beyond inter-party variation in discourse, differences along national lines can also be observed: the market, the sectoral and the subsidiarity frames are more present in the German discourse (regardless of parties), while the Framework Directive and general interest frames are more likely to be invoked by the French.

It is particularly interesting to point out two aspects in particular: first, the dynamics over time and, second, the internal contradictions of the framing by the social democrats. Whereas the position of the EPP seems to crystallize in a fairly coherent fashion on the themes of the market and subsidiarity, the discourse of the PES supposed to channel the demands of the pro-regulation coalition in the decision making process displays an insolvable tension. The presence of the market frame increased between 2001 and 2006, suggesting a quasi conversion of the social democrats to the conservative discourse and ideas. Several speeches reflect the dilemma between the market and general interest:

Here I would like to avoid a misunderstanding. The purpose is not to have the market and competition on the one hand and services of general interest on the other. Services of general interest can very well be provided by market tools in a competitive framework.^[3]

However, not all social democrats share this point of view:

In my view, the issue of economic or non-economic general interest is the conflict line between the advocates of a social market economy and those of a neoliberal market economy^[4]

This question is also disturbed by the issue of subsidiarity, which becomes an increasingly dominant frame over time. While it is typically initiated by the EPP and German MEPs, it becomes pervasive in the speeches by PES and French MEPs. In fact, the inconsistency of the social democrats’ discourse on the SGI is due to various ways of understanding the equation between the market, general interest and subsidiarity: there is a clash between a defensive and an offensive position. For most German social democrats (which also echoes the position of the MEPs from Austria or Northern Europe), protecting subsidiarity equals protecting welfare services:

In our view, the important matter in our debate about services (...) is that our strategy must find the right balance between the requirements of the internal market, and what we, social democrats, know and accept, and the necessity to protect citizens by strengthening local and regional institutions which are best able to ensure the principle of subsidiarity in services provision^[5]

In contrast, for the French (as well as the Belgians and MEPs from Southern Member States), subsidiarity is important but does not protect local authorities from the powerful logic of competitive markets:

European integration must go further by respecting diversity, by it must be grounded in a number of common values related to social justice, equality, and solidarity. We can define a common framework for European public services. This can be only considered through competition because we know that the benefits that society receives from public services must be considered in terms of education, health, security and cohesion among Member States and their citizens.^[6]

Thus, the social democrats’ discourse has been very ambivalent in the battle of ideas: it shows a global dynamic of withdrawal on subsidiarity in the name of a more social Europe; but at the same time, by converging with the discourse of the conservatives, it delegitimized the proposal of re-regulating SGI at the EU level.

The direction taken by deliberations within the EP, that is eroding support for the Framework Directive, has been key in leading the debate into deadlock. Facing divided Member States and the absence of a strong majority supporting a legislative proposal within the EP, the Commission came easily to the conclusion that there was insufficient political support for such a bold move towards positive integration in the aftermath of the heated debate on the Services Directive. Institutional constraints, such as the sectorizing of EU governance and regulation, are underpinned by more fundamental political positions which can be observed through the discursive dynamics of political deliberation. As a senior official of the EU Commission summed up, ‘Sectorizing may have played a role, but I wonder to what extent. If the Commission President and MARKT wanted a horizontal text, they could have done it.’^[7] Ironically, when the

Treaty of Lisbon was adopted and finally provided the EU institutions with an explicit legal basis for regulating SGI, the debate was already over from a political point of view. The recurrent invocation by the unions and other interest groups of Article 16 TFEU, the Charter of Fundamental Rights or the Protocol on SGI received no echo among decision makers. The following section examines the configuration emerging from the failure of mobilization for positive integration.

• [1] Langen report, session of 13 January 2001; Herzog report, session of 13 January 2004; Rapkayreport, session of 26 September 2006; Hasse Ferrera report, session of 12 March 2007.
• [2] Jozsef Szajer (PPE), 16 September 2006.
• [3] Bernard Rapkay (PES), 13 January 2004.
• [4] Proinsias de Rossa (IDEM), 13 January 2004.
• [5] Martin Schulz (PES), 26 September 2006.
• [6] Fran^oise Castex (iDEM), 26 September 2006.
• [7] Interview with a former senior official of the European Commission.