Organisation of Multilevel Management in European Union

Searching for factors of economic growth, reducing unemployment, increasing flexibility of trade or finally improving standard of living are only some goals individual states set for themselves. Many states see, that functioning in globalisation is more difficult and cannot be fully autonomous. This is why all kinds of commercial or monetary unions are formed, where through multilateral institutional cooperation attempts to realise own goals are made. Such example is the European Union, established in Maastricht treaty in 1992 and functioning since 1993, and shaped through changes of the European Coal and Steel Community (established in 1951), the European Economic Community and the European Atomic Energy Community (established in 1957).

With signing of the Treaty of Lisbon on 13 December 2007, and its subsequent entry into force on 1 December 2009, the European Union received a unified legal personality (Art. 46 of the Treaty on European Union), taking existing rights, duties and powers of the Community. It thus became a fully-fledged organization of international law, capable of entering into other agreements, treaties and conventions. It was also established, that national law in Member States is subordinate to EU law, if so results from law of the Court of Justice of the European Union (Boron´ska 2012). The Treaty of Lisbon organises the European Union in the form closer to citizens (at least declaratively). However, time and indubitable changes the whole Community is facing will show if strengthening of division of EU authority—the European Parliament—will be a real strengthening of electionbased democracy. Today, it is world's largest economic organisation, gathering 28 states and constantly searching for new ways of sectorial and systemic integration with possibility of enlargement in future.

The 2007 financial crisis and its aftermaths influence and will be influencing the European Union states to carry out changes and reforms in the European Community system of governance and management. The crisis revealed politician's recklessness, who when indebting own national budgets did not care about the consequences of their actions, and in addition led—as in the case of Greece—a gigantic creative accounting, deceiving other partners from the European Union. Besides creative accounting in this country, practised largely by the general public, amounted to at least 25 % of the total income. It was scientifically well documented as early as in 2004 and took place mostly in the majesty of the law, where the norm was overstating profits by large companies and understating by small ones, proportionally reducing the size of the income tax through different methods (Baralexis 2004). But only in 2009 such practices were publicly disclosed. It turned out, that lack of fiscal discipline lead to at least 13 % budget deficit in relation to GDP, instead of 3 % as Greek authorities claimed. It was also combined with weak external competitiveness and rapid increase in the current account deficit (Oxford Economics 2010). Anyway, at the beginning of 2012 excessive budget deficits above 3 % of GDP and/or public debt above 60 % of GDP, as defined in Art. 104 (6) and Art. 140 of the Treaty establishing the European Union (TEC) and the accompanying Protocol No. 12 to the TEC (Treaty on the Functioning of the European Union (DzU UE nr 2010/C 83/01) In accordance with the Protocol No 12 on the excessive deficit procedure), was found in many EU countries (in 23 out of 27) (Tor,oj 2012). It meant, that majority of them was not able to adjust to Maastricht criteria (convergence) or Pact on Stability and Development. The problems of those states on the wave of the ongoing financial crisis were not considered as exceptional or temporary, but rather as structural.

Solution of this procedure in the framework of the European Commission's assessments and its recommendations made to the Council of the European Union is based on reducing the deficit for the last year to below 3 % of GDP, and in a subsequent period of the European Commission forecasts (currently 2014–2015) deficit does not exceed 3 % of GDP (Komisja Europejska 2014).

The attempt to prevent such situation in future was developing and presenting the European Council in March 2011 with the Euro Plus Pact, whose essence is increase of competitiveness of economies of individual EU Member States and better coordination of economic policy. The pact was joined by all countries of the Euro area, as well as Bulgaria, Denmark, Lithuania, Latvia, Poland and Romania (Owsiak 2012). On its basis normative documents regarding stabilisation of public finances and strengthening economic management were developed and implemented. Those were:

(a) six legal acts in the field of public finances, the so-called six-pack (one of the ECOFIN Council Directive and five regulations of the European Parliament: COUNCIL DIRECTIVE 2011/85/EU of 8 November 2011 on requirements for budgetary frameworks of the Member States; Regulation (EU) No 1173/2011 of the European Parliament and of the Council of 16 November 2011 on the effective enforcement of budgetary surveillance in the euro area; Regulation (EU) No. 1174/2011 of the European Parliament and of the Council of 16 November 2011 on establishing enforcement measures to correct excessive macroeconomic imbalances in the euro area.; Regulation (EU) No 1175/2011 of the European Parliament and of the Council of 16 November 2011 amending Council Regulation (EC) No 1466/97 on the strengthening of the surveillance of budgetary positions and the surveillance and coordination of economic policies; Regulation (EU) No. 1176/2011 of the European Parliament and of the Council of 16 November 2011 on the prevention and correction of macroeconomic imbalances; Council Regulation (EU) No 1177/2011 of 8 November 2011 amending Regulation (EC) No 1467/97 on speeding up and clarifying the implementation of the excessive deficit procedure),

(b) the European Stability Mechanism (as Annex II to the Euro Plus Pact),

(c) Fiscal Treaty—Treaty on Stability, Coordination and Governance in the Economic and Monetary Union.

A special form of standardization of the new institutional order of the European Union and even greater forms of negation of nation states, in its traditional sense, prerogatives and shape, is to adopt a six-pack, which forms the basis of a new economic government. One can even say that “in the Euro zone there already exists a European economic government—but it should not be confused with an international Euro summit of the fiscal pact, but with supranational EU institutions” (Antp€ohler 2013). Its essence is to combat the macroeconomic imbalances and supervision throughout the economic union and within all areas of national economic policy. It is carried out by the approval of the European Commission's decision in this respect by a qualified majority of the Council. In addition, the provided financial penalties are very high, averaging at 0.1–0.5 % of GDP (see Regulations and directive regarding the six-pack).

Introduction of the six-pack, which de facto took place at closed door and basically with lack of democratic mechanism of choice of individual societies of Member States, became a fact (Antp€ohler 2013). Such legal grounds made it possible to consolidate going in the direction of the organizational model of the European Union, understood as a multi-segmented (multilevel) political governance (multi-level governance). Conception of such management model for the European Union (but not only) is not new. It has been operating for several years on a large scale in the practical implementation and the scientific literature (Scharpf 2001; Hooghe and Marks 2003). It was officially accepted in 1992 in Maastricht Treaty as a theoretical vision of common Europe managed multilevel, and its authors were L. Hooghe and G. Marks (Hooghe et al. 1996).

Multilevel governance consists of harmonious management of public affairs (governance) not by government but by other supranational structures and socioeconomic organizations. In this model the government and its national institutions have become rather coordinators of public action and executor rights. Multisegmantality also results from the multi-level administrative territorial units (NUTS), which have been adopted in the European Union (Regulation (EC) No 1059/2003) and the nation states adapted to the NUTS (Fig. 3.9).

Therefore, the main context of management is focused on wider society, with its vast part governed by a government (Peters and Pierre 2010) within general unit, meaning. Multilevel governance and management model is derived from the concept of promoting neo-liberal federalism, in which the main decision-making processes in economic issues are passed by at least one level higher. It is therefore a vertical separation of political functions from economic ones by either an increase in the mobility of capital (by increasing political and market centralization), or vice versa—through decentralization constraining the potential market policy (Harmes 2006). At the same time, federalism itself may be for the EU Member States both suitable and the best possibility, and on the contrary—a hazard, especially for

Fig. 3.9 Administrative units of legal and institutional frameworks of EU member states. Source: own

smaller states and with small economic potential. It all depends on what basis it will be built, as part of which design concept it will be implemented and controlled.

The idea of multilevel governance is building such management network, which provides effectiveness of cooperation and collaboration under complex system of various levels of authority with similar goals, but different tasks and roles (Wojtaszczyk et al. 2009). In the European Union such model in horizontal approach basically consists of three main levels: the European Union (European level—all member states), the level of the nation-state and regional level. Complementation of the horizontal structure of this model is the local level. So the base, at least theoretical, of this model is participation of citizens of Member States in the decision-making process through their representatives in the institutional sphere in order to develop the best community policies from the point of view of win–win strategy (Fig. 3.10).

It needs to be noticed, that large number of member states on various stages of development directly decides about the possibility of influencing the European system of action coordination. Euro area countries, especially France and Germany, have de facto main vote in decision making and securing financial stability—both within the European Stability Mechanism (ESM), as well as the European Financial Stability Facility (EFSF). Thus, countries outside of this zone with the Community currency are not involved in many decision-making processes, and about some of them they are often informed later. It is thus evident that the European Union is not uniform either in decision making, or structure, and the process of mutual adjustment in the course of the game business is open.

Some countries in the EU having a regional structure (such as Spain, Italy) or federal ones (Austria, Germany) make a deliberate separation of powers in the country, organizing management of each of its components. Decentralization, however,—whether in regional (associated with local government) or federal form (within the state structure component)—leads to a crisis of the unitary model of the state and the glorification of federalism (Baldi 2003).

Fig. 3.10 General system of multilevel management in the European Union (real approach). ESM European Stability Mechanism, EFSM European Financial Stability Facility. Source: own

Therefore the roles of organisational explanatory model of the European Union reflecting the multi-level or multi-segment management can be formulated:

(a) Explaining functioning of integration grouping countries capable of further evolutionary development and annexation. This is done in scientific form of interdisciplinary nature, but mostly usual and everyday form.

(b) Explaining the actual and theoretical conceptual and mental constructs for testing a variety of scientific theories in relation to the real occurring or likely to occur phenomena. This is in particular about theoretical and empirical evaluation of concepts relating to the organization, management and governance, using existing scientific theories and global functional

Table 3.3 Opportunities and threats in multilevel management model in the European Union



Effectiveness of cooperation and collaboration

Favouring the economically and/or politically strongest state within the game of interest

Possibility of building global organisational and economic structure

Weakening of sovereignty and prerogatives of nation states

Managerial management

Lack of liability and commercialisation of state

Mechanism of community policy coordination (method of open coordination)

Lack of equal access to decision-making process for all interested parties

Consultations and negotiations in decision making process

Qualified majority, which through coalition votes creates winners and losers

Possibility of fuller realisation of national and community goals

Permanent confrontation of member states preferences

Network and flexible organisation

Large number of decision making centres within distribution of competences (often with opposing interests)

Better quality of legislature and execution of law

Through legislative initiative, lobbied in the European Commission, possibility to eliminate companies from the market and imposing subjectively advantageous law in the country

Building social interactions

Imposing community values and political correctness

Modern paradigm of development adjusted to global challenges

Crippled sustainable development

Source: own

solutions, often posed as asymmetric threats that need to be protected from under the new organisation.

(c) The use of Kant's transcendental argument relating to the empirical knowl-

edge of governance and management through indication of unequivocal phenomena and conditions and the possibility of their occurrence.

Thus, nowadays we can point out opportunities and threats in implementing and using the MLG model in the European Union (Table 3.3).

It is then clearly visible, that despite evident chances of using the multilevel management model, an important problem may be the arising threats resulting specifically from moving the decision-making centre in the state from the national level to international level (which has become a fact). A similar tendency is also observed in the sphere of replacing public interest with private ones with systematic weakening of capabilities of political decision makers. More frequently through various forms of deregulation the state is moved from supervision of the economy, which on the one hand is good, but on the other the state becomes a supervising pseudo-entity under standards and principles worked out by international structures. In such a shape the state attributes become the property of international corporations (Plis 2011).

It can be stated, that from its beginnings, and in particular in the last ten years, the European Union is a place for searching for and confronting various ideas within many opinions, religions or social groups. It can be even stated, that it is a battleground for ideas and new solutions. This is why the current institutional system of the European Union has many centres of authority (Goetschy 2006; Pascaul and Suarez 2007) and in this way it should be analysed, despite apparent unity.

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