EU regulation between uniformity, differentiation, and experimentalism: Electricity and banking compared
| Author | Jonathan Zeitlin,Bernardo Rangoni |
| DOI | http://doi.org/10.1177/14651165221126387 |
| Published date | 01 March 2023 |
| Date | 01 March 2023 |
| Subject Matter | Articles |
EU regulation between
uniformity, differentiation,
and experimentalism:
Electricity and banking
compared
Jonathan Zeitlin
Department of Political Science, University of Amsterdam,
Amsterdam, the Netherlands
Bernardo Rangoni
Department of Politics, University of York, York, UK
Abstract
How far and under what conditions may experimentalist governance be an efficient and
legitimate means of responding to diversity among EU member states, in comparison to
both conventional uniform regulation and differentiated integration? By comparing two
major domains where the challenge of integrating national diversity has arisen prominently,
electricity and banking, we find that under conditions of high interdependence and high
uncertainty, diachronic experimentalism may be a necessary condition for synchronic uni-
formity. Uniform rules can be accepted as efficient and legitimate by member states, pro-
vided that they are regularly revised based on implementation experience through
deliberative review processes in which national officials themselves participate. Our findings
on EU banking regulation further suggest that experimentalist governance and differentiated
integration may also be complementary, but asymmetrically so, in that the latter depends on
the former to accommodate diversity within and across member states, but not vice versa.
Keywords
Banking regulation, differentiated integration, electricity regulation, experimentalist
governance, uniform regulation
Corresponding author:
Jonathan Zeitlin, Department of Political Science, University of Amsterdam, Postbus 15578, 1001 NB
Amsterdam, The Netherlands.
Email: j.h.zeitlin@uva.nl
Article
European Union Politics
2023, Vol. 24(1) 121–142
© The Author(s) 2022
Article reuse guidelines:
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DOI: 10.1177/14651165221126387
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Introduction: Alternative approaches to integrating diversity
within the European Union
How can advances in European integration be reconciled with diversity among
member states? Rightly or wrongly, European Union (EU or Union) regulation has
acquired an increasingly contested reputation, at least within the Union itself, where
the ‘Brussels rule factory’has become a term of abuse even among committed suppor-
ters of the European project. This contested reputation is partly due to the perceived
technocratic character of EU rule making, and its perceived distance from national
parliaments and citizens. It is likewise partly due to the politically contested character
of EU rules, which may involve value conflicts and distributive consequences for
member states, firms, and taxpayers. But it is also due in no small measure to concerns
about misfits between one-size-fits-all, centrally imposed uniform regulation (UR) and
heterogeneity of socio-economic conditions, institutional structures, and policy prefer-
ences in an increasingly diverse Union of 27 member states (Matthijs et al., 2019).
One widely canvassed solution to this dilemma is differentiated integration (DI).
Its underlying assumption is that deeper integration of markets and societies within
the EU requires uniform, centrally determined rules, which some member states
may be unwilling or unable to accept, at least initially. Where other member states
wish nonetheless to push ahead, the result is DI: policies and rules that apply only
to some member states (internal DI), as well as in some cases to certain non-member
states (external DI). Recent research has shown that most such internal DI is tempor-
ary, resu lti ng fr om transitional exemptions from EU rules in accession agreements or
secondary legislation, which are eventually scheduled to expire (‘multi-speed’integration).
However, other forms of internal DI are more durable, especially where they reflect ‘consti-
tutional’reservations among some member states about the integration of the so-called ‘core
state powers’,infieldssuch as foreign and defense, interior and justice, or monetary policies.
Among the best-known and most visible forms of such durable ‘multi-tier’integration are the
Eurozone and the Schengen Area (Schimmelfennig and Winzen, 2020; Schimmelfennig
et al., 2023).
1
Recent literature has identified several scope conditions for such enduring DI. Beyond
the heterogeneity of national preferences, variations in political salience are crucial to
understanding why some member states choose to opt out from further integration in spe-
cific policy fields, while others forge ahead. So too is the degree of mutual interdepend-
ence, which must be sufficient to motivate closer integration among the vanguard, but not
so high as to create externalities (whether negative or positive) that outweigh the expected
benefits of DI. Another crucial scope condition is modularity: The key policy choice must
be reducible to a binary option, which member states can choose to embrace or reject.
Enduring, multi-tier DI thus appears most likely under conditions of heterogeneous pre-
ferences, high but asymmetrical politicization, moderate interdependence, and high
modularity (Schimmelfennig and Winzen, 2020; Schimmelfennig et al., 2015;
Schimmelfennig et al., 2023).
DI, defined in these ways, offers both advantages and disadvantages for European
integration (Schimmelfennig et al., 2023). On the positive side, DI may allow a closer
122 European Union Politics 24(1)
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