Social Democracy and the Challenge of European Union 9781626374973

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Social Democracy and the Challenge of European Union

Social Democracy and the Challenge of European Union Robert Ladrech

b o u l d e r l o n d o n

Published in the United States of America in 2000 by Lynne Rienner Publishers, Inc. 1800 30th Street, Boulder, Colorado 80301 www.rienner.com and in the United Kingdom by Lynne Rienner Publishers, Inc. Gray’s Inn House, 127 Clerkenwell Road, London EC1 5DB www.eurospanbookstore.com/rienner © 2000 by the Lynne Rienner Publishers, Inc. All rights reserved. Library of Congress Cataloging-in-Publication Data Ladrech, Robert. Social democracy and the challenge of European Union / Robert Ladrech. p. cm. Includes bibliographical references and index. ISBN 1-55587-902-0 (alk. paper) 1. Socialist parties—European Union countries. I. Title. JN50.L33 2000 324.2'172'094—dc21 00-024782 British Cataloguing in Publication Data A Cataloguing in Publication record for this book is available from the British Library. Printed and bound in the United States of America

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The paper used in this publication meets the requirements of the American National Standard for Permanence of Paper for Printed Library Materials Z39.48-1984. 5 4 3 2 1

For Ros

Contents

Preface

ix

1

1

Introduction

Part 1 The Challenge of European Union

2 3

European Integration and Party Relevance European Integration and the Social Democratic Dilemma

21 37

Part 2 Adaptation and Innovation by Social Democratic Parties

4 5 6 7

Europeanizing Social Democratic Parties Party Networks and European Union Governance The PES and European Union Agenda Setting Toward a European Social Democracy

Bibliography Index About the Book

59 81 109 131

147 161 165

vii

Preface

This book had its origins some years ago, when I participated in a National Endowment for the Humanities Summer Session on Modern French Politics at the Institut d’Etudes Politiques in Paris. I attended the European Parliament campaign launch of the Parti Socialiste (PS) and became intrigued with the question of how the left—in particular, social democratic parties— could somehow translate their policy goals onto the European agenda. Over the next few years I immersed myself in the comparatively scanty literature on parties and European-level activities, leading to a published article investigating the response of the French PS, British Labour Party, and German Social Democratic Party (SPD) to the European Community’s Single Market Programme. In 1992 I was lucky enough to secure one of the first Fulbright European Community Affairs Research grants and spent the 1992–1993 academic year in Brussels studying the operation of the two largest transnational party federations, the Christian Democratic European People’s Party (EPP) and the newly renamed Party of European Socialists (PES). My longstanding interest in the left led to a particular focus on the organizational development of the PES and to a number of very valuable contacts and indeed friendships with individuals in the social democratic party family, in Brussels and elsewhere. The idea for the book grew out of my experience in Brussels, and over the next several years I followed the parallel development of the PES and the European Union (EU). The results of the Amsterdam Treaty and the Luxembourg summit on employment convinced me that the time was right to draw toix

x

PREFACE

gether the different threads of analysis I had been considering and finally write the book on social democratic parties and the EU that I had had in my head for some time. The analytic literatures I have drawn on are linked to my central preoccupation with the question of how political parties of the left respond to the changes in their operating environments, in this case the ever-growing intrusion of the EU over the scope of national government policymaking. I hope the links between party analysis and European integration studies strengthen the overall analysis. ***

I am particularly indebted to individuals working in the secretariat of the PES, who in their capacity of serving the European interests of member parties are invaluable for their insights on the national-EU nexus; I thank them for sharing their thoughts with me. Some have moved on to other posts over the years, but I would like to thank in particular Axel Hanisch, secretary general of the PES when I arrived in Brussels in 1992, and Peter Brown-Pappamakail, for making me welcome and taking an interest in my research project. Bernard Tuyttens also deserves special thanks for his insights on the economic policy developments the PES was involved with, as does Ton Beumer for discussions on the direction and mission of the PES. In the Group of the PES, I want to thank particularly Richard Corbett for his interest and comments on my developing thoughts on the left and the EU. In the European Parliament secretariat, Francis Jacobs and Michael Shackleton were always ready to lend an ear and provide information concerning parties and parliamentary relations. Beyond the offices of the European Parliament (EP), but still in Brussels, I would like to thank John Fitzmaurice in the European Commission, charged with relations with the Parliament, and Mario Telò and Pascal Delwit at the European Studies Institute of the Université Libre de Bruxelles, both of whom treated me with courtesy and showed an interest in my work. Later stages of my thinking on the party-EU connection benefited from discussions with Simon Hix, with whom I collaborated in writing an analysis of the 1994 EP elections for the PES. Jerry Sheridan of American University’s Brussels Program provided additional insights into the workings of Brussels. In-

PREFACE

xi

dividuals in the national parties’ delegations to the EP, as well as those charged with European affairs in their parties, were very helpful in terms of shedding light on their party’s policy toward the issue of European integration. I spoke with many individuals over the years, but I would like to give special thanks to Ken Coates, Glyn Ford, and Alan Donnelly of the British Labour Party, and Gérard Fuchs of the French Parti Socialiste. Among academic colleagues who listened to me as I developed my thoughts on social democracy and the EU, I would like to thank George Ross at the Center for European Studies at Harvard University, John Gaffney at Aston University, and Luciano Bardi at Bologna and Pisa universities. I have also been gratified over the past couple of years to meet younger colleagues who have also become interested in parties and EU dynamics, in particular Iain Ogilvie at Keele University, Karl Magnus Johansson in Stockholm, and Tapio Raunio at Helsinki. Finally, I owe Ros Wright a huge debt for helping me bring this writing project to a conclusion. I met Ros during one of my protracted periods of procrastination, and she both saw to it that I got the ball rolling and intervened when obsession with the project threatened to blot out all else. Despite all this, Ros agreed to become my wife during the final period of revising the manuscript. It is my greatest pleasure to dedicate this book to her, along with all my love. — R. L.

Social Democracy and the Challenge of European Union

1

Introduction

[Schröder’s] victory, coming after Tony Blair’s in England and that of Lionel Jospin in France, confirms that Socialist and Social Democratic ideas dominate Europe today. —François Hollande, first secretary, French Parti Socialiste I’m worried about the excessive number of socialist governments in the European Union that risk forming a dangerous political monopoly. —Guilio Andreotti, former Italian Christian Democrat prime minister

This book assesses the changing relationship between social democracy and the policy agenda of the European Union (EU) at the beginning of the twenty-first century. European integration since the late 1980s has had a negative impact upon the relevance of political parties as purposive political actors, and on social democratic parties in particular in terms of their programmatic identity. Through an analysis of the development of the social democratic transnational party federation, the Party of European Socialists (PES), over the course of the 1990s—its organization and activities—I argue that the construction of a social democratic response to the neoliberal orientation of the EU has begun to emerge. Employment issues and economic coordination in the aftermath of the Maastricht Treaty and in the context of Economic and Monetary Union (EMU) are the central propositions upon which the PES has assisted national party leaders to advance a common agenda intended to influence the EU through coordinated action in its central institutions. The PES has also increasingly been utilized by the leaderships of its 1

2

INTRODUCTION

member parties—through participation in working parties and preparations for European Council and Council of Minister meetings—thus creating a permanent network of social democratic actors operating within the national-supranational European nexus. The outlines of a European social democracy can be discerned in the efforts by social democratic parties to influence the EU agenda, thereby embedding and redefining social democracy in the process. The Challenge The victory of the German Social Democratic Party (SPD) in September 1998 brought to thirteen out of fifteen the number of social democratic parties in government (or participating in government coalition) in the European Union. The foregoing comments by Hollande and Andreotti, whether reflecting a positive or negative attitude toward this situation, presuppose an ideological consistency and a high level of government-togovernment coordination of policymaking. Accomplishing this feat is the historic challenge for social democrats. As characterized by Pervenche Berès, vice president of the Socialist Group in the European Parliament, “Up to now we have been willing to allow Europe to be run by the neo-liberals. Now we need to think of a European way of acting. The socialists must face up to their responsibilities” (“Social Democrats” 1998). In the days following the SPD victory, many social democratic leaders, most notably the French prime minister Lionel Jospin and German finance minister Oskar Lafontaine, advocated coordinated social democratic national government action in the area of employment and economic growth, involving, among other measures, an effort to lower interest rates across the continent. It was clear that the SPD victory had altered the arithmetic of partisan influence in Europe; never before in the history of the European Union/Community had the governments of the biggest and most influential countries been governed by the center-left— France, the United Kingdom, and Germany. For the first time in a generation, social democrats appeared to have the opportunity to put substance behind their words. The euphoria of the left and the pessimism of the right regarding the number of social democratic governments in the

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3

EU, however, mask a very real predicament for any attempt to “social democratize” the EU, namely, the difficulty in organizing an efficacious social democratic presence at the supranational level. As fortuitous as the convergence of social democratic governments is at the beginning of the twenty-first century, it is dependent upon national electoral cycles; and theoretically, depending upon various electoral calenders and government coalition dynamics, the size of the social democratic majority of EU member states could easily change in a year or so. Consequently, a social democratic influence in EU matters would have to depend on more than the partisan complexion of the government(s)-of-the-day. This is not to say that the convergence of center-left governments in critical EU member states does not matter—and, in fact, the 1998 German election may prove to be the catalyst for a European social democratic project that all hitherto activities have been unable to effectively create—but that the supranational level of European governance requires a permanent partisan presence that transcends the party government complexion in the member states. For European social democrats in particular, there has been a growing urgency to respond to the increased influence of European Union policymaking. The referendum on the Maastricht Treaty on European Union in 1992 was a watershed in party and public attitudes toward further integration of the European Community. In many countries—Denmark obviously, but also France, Germany, and the UK—the proposal to abolish national currencies and tie future monetary control to an independent European central bank represented a qualitative difference that emphasized as never before the potential impact of European integration upon national political systems (Youngs 1999). Social democratic parties all supported the ratification of the Maastricht Treaty, although internal party divisions were apparent. In the post-Maastricht political environment of many member states, the “European issue” was transformed from a matter of elite summits to an item of everyday politics, and in so doing brought to the fore a dilemma for social democratic parties that had been latent. This was, essentially, their collaboration in the project of European integration, a project that had taken a decisive neoliberal turn in the late 1980s with the Single European Act. Monetary union was a significant leap beyond the enhancement of barrier-free intra-EU trade and raised explicitly

4

INTRODUCTION

political questions in the public arena, not the least of which was the future viability of democratic control over economic policymaking. This prospect contained within it the loss of a critical area of programmatic distinction and identity from other parties, especially right of center, in competitive national politics. During most of the 1990s rising unemployment, recession, and slow growth, coupled with national government efforts to qualify for monetary union by meeting the so-called convergence criteria, exacerbated the social democratic lack of alternative propositions. The challenge for social democrats, realized by increasing numbers of party leaders, was to extricate themselves somehow from the straitjacket of constricted economic policy that they themselves had helped to create. Social democratic leaderships concluded that with no realistic prospect of turning back from EU treaty obligations—much less withdraw from the EU itself—they had to demonstrate that they could make a difference in terms of the direction of European integration, or more precisely, that a social democratic agenda could be brought to EU policymaking. Otherwise, their relevance as organizations seeking to promote a specific policy package via elections would be further eroded. Purposive action at the national level now required a corresponding effort at the supranational level. Realization of a problem is one thing; devising solutions, especially ones dependent upon action transcending national boundaries, is another matter completely. European social democratic party leaders in 1990 had endorsed a declaration acknowledging the effects of the EU and globalization upon national autonomy in policymaking: The ever increasing internationalisation of the economy and interdependence of our societies at every level means that it is increasingly difficult to respond on a national level to the new challenges which arise. Democratic control of the future remains possible, provided that those elements of sovereignty which can no longer be exercised in a purely national framework are pooled. (CSPEC 1990, p. 1)

At a Congress of the Confederation of Socialist Parties of the European Community (CSPEC) earlier that year, new emphasis was given to the aims of the organization. Among other recommended reforms was “to make the ‘central organisational

INTRODUCTION

5

goal’ of the Confederation the ‘continual programmatic and political coordination,’ and to set up a Steering Committee for Policy Development” (quoted in Hix 1995, p. 18). Further, the party leaders noted the indispensability of coordinating their efforts in order to achieve their common policy goals. Until the 1998 German elections, then, what had they accomplished? Had there been, in other words, a social democratic response to the “European challenge”? The answer is yes, although the results may not be spectacular, nor for that matter well known to the average voter or even party activist. Furthermore, as an effort involving political parties, it is not a traditional party activity so much as an adaptation to a new institutional environment, thus demanding an original response. This book has as its focus the efforts by European social democratic party leaders to organize themselves transnationally in such a way as to bring to bear upon the EU a policy orientation that provides tangible benefits in their national contexts. Through the development and activities of their transnational party federation, the Party of European Socialists, social democratic parties have begun a long, slow process whereby a European social democratic project can be conceived and, recognizing the constraints of operating within the governance structure of the EU, present an alternative vision for Europe. What this volume does not suggest is that a European social democratic political party, one transcending and autonomous from national parties, has been created; rather, it suggests that for pragmatic and, one could say, survival reasons, social democratic parties have begun to develop an organized presence at the supranational level in order to acquire benefits that they are individually incapable of securing because of globalization and the already highly developed level of European integration. This interaction itself has also gone some way toward contributing to the development of a European social democratic policy perspective. The Constraints It has been argued that the conversion of the once most reluctant of social democratic parties to embrace the European integration process—the British Labour Party and the Danish Social Democratic Party—was in fact the determination by their respective

6

INTRODUCTION

party leaderships that the costs of going it alone outweighed potential benefits from attempting to steer the integration process and EU policy orientation toward realizable party goals (Haahr 1993). This, in a nutshell, is the argument that once the fateful decision is made to utilize the EC/EU in order to acquire certain objectives, rather than viewing the EC/EU as a barrier to the realization of these objectives, a strengthening of the Community/Union is called for, especially in those areas that invest in national goals. This phenomenon has been widespread among social democratic parties. Never enthusiastic as a whole, as, for example, Christian Democratic parties since the 1950s, various social democrats have been suspicious of the integration process since its launch with the European Economic Community (EEC) in 1957 (Featherstone 1988). The focus of social democratic parties on the national state as the medium and tool with which to develop and implement socioeconomic change had relegated the issue of European integration to the realm of Euro-specialists and foreign policy until the 1980s. By the late 1980s convergence around a positive view of European integration among all the social democratic parties in the Community reflected the conviction, based on practical experience, of the limits of the national state (Butler 1995). Thus, by the launch of the PES in 1992, at least rhetorically, the party line was centered on advocating the enhancment of the EC in those areas in which the national state was increasingly becoming less effective (Ladrech 1997). Why, with the 1998 German elections, did it suddenly occur to commentators that a political will only now existed among social democratic parties to impart an alternative policy direction to the EU? The answer to this question relates to the nature of the activities of the PES and, by definition, to the nature of the environment and the constraints to which its adaptation and development is intended. At an even more basic level, it reflects upon the structure of national media and their lack of coverage of what they consider mundane European-level activities. Simply put, in their broad acceptance of the EC/EU as a legitimate arena in which to pursue national policy goals, national parties also had to accept the fact that the EC/EU was not institutionally suited to their standard partisan activities. Though certainly amenable to the exertions of member states operating within the Council of Ministers and European Council, transferring national partisan policy goals to

INTRODUCTION

7

the European level was not so straightforward a task. It was therefore understandable that the constraints of a nonnational and indeed nonpartisan competitive environment rendered statements of imbuing the EC with social democratic policy orientations wishful thinking to most observers. It was only with the overwhelming number of social democratic governments, and the fact that the “big three” now had center-left governments, that an opportunity seemed apparent for social democrats to seize their chance. In this context, this comment in the Financial Times was typical of media responses to the SPD victory: “With the election of Mr. Schröder at the head of a redgreen coalition in Germany, the leaders of the left are suddenly confronted with the possibility of reversing two decades of conservative economic and social policy-making in Europe, and replacing it with ideas of their own” (“Social Democrats” 1998). However, an organizational adaptation to the EU, even if partisan, operates within the multilevel matrix of EU and national institutions and actors, and consequently most of its activities are insulated from regular media coverage. At first glance, the constraints on the development of a cohesive partisan presence in the EU policymaking system appear obvious. To begin with, there are two major dimensions within which parties operate, their national context and the European level. At the national level, opposition status renders their impact upon government policies and strategies regarding the EU minimal. Depending upon the country in question, though, influence may be increased through a federal structure wherein the subnational units have some de jure power regarding constitutional questions, as in Germany and Belgium. There is also the matter of party-government relations, in that government policy, especially in a coalition government, may not be perfectly in line with party programs nor party policy as developed in conferences and congresses. Indeed, some have argued that the executive is in fact strengthened in its autonomy from domestic sources of power and influences as part of the policymaking process involving Brussels (Moravcsik 1994). European policymaking had also been considered a matter of expert or technical expertise, so general discussion and knowledge on EU affairs was low to nonexistent in many parties until at least the Maastricht Treaty ratification process in 1991–1992. Thus the role of party in the national context does not have a straightforward channel

8

INTRODUCTION

in terms of EU policymaking, whether in government or in the opposition. Finally, a national government is, after all, simply one EU member state among many, and although on certain issues a national veto may be wielded, the negative aspect of this power is limited. At the European level, the barrier to partisan or party influence is even weaker than in national settings. The only institution clearly constituted on partisan lines (although on certain issues national delegations may deviate depending on its perceived domestic impact), the European Parliament (EP) does not assume the same role vis-à-vis the council or the commission that a national parliament does in relation to its executive branch. Of course, this is an idealization of the power and influence of national parliaments in the policymaking process, but it is accepted that despite the development of the EP over the past decade, it is not coequal with either of the two other institutions. Finally, there is also the fact that on prointegration issues, the EP majority is represented by a PES-EPP (European People’s Party) coalition, thus complicating the development of clear left-right positions, although initial signs from the newly elected 1999 parliament, especially the new EPP-Liberal alliance, do suggest an increase in partisan positioning. To these two impediments to party activities regarding the EU, there are other considerations to bear in mind. Although political parties may be defined as singular legal organizational entities, distinguishable among themselves as well as from other types of competitors such as interest groups, they are nevertheless composed of formal and informal divisions of opinions. Party management, whether in government or the opposition, is a fact of life for party leaderships. Support for the EU does not mean the same thing to all who vote for such a motion at a party congress. A supporter of the EU may believe EMU is desirable only in the context of balancing it with a political counterweight. Another supporter of the EU may view EMU positively for reasons extending to global competition and trade, and see a political dimension as meddlesome interference undermining the strength of the euro. One may also oppose EMU outright while still remaining supportive of the EU more generally. The point is that party policy over a contentious subject such as the European Union may be so general that it masks differences of opinion, or a party leadership may accept a persistent

INTRODUCTION

9

critique from a vocal minority. Either way, developing a tightly focused stance on a range of EU policies in conjunction with parties from other EU member states would entail a formidable undertaking. Thus, combining the lack of a facilitating institutional system at the European level, and the blockages inherent in national politics, together with intraparty politics, the creation of a coordinated and cohesive partisan influence at the European level would mean having to surmount a number of seemingly impregnable obstacles. The Response Subsidiarity has been a Euro-buzzword since the early 1990s, though the dynamic relationship that the concept attempts to elucidate has been part of the European integration process from the beginning. At the risk of too general a definition, it concerns the relationship and jurisdiction between the European and national levels over policy development and implementation (Cass 1992; Emiliou 1992; Neunreither 1993; Peterson 1994; Teasdale 1993). A call for transferring certain authority to the EU has significant ramifications, as not all member states have similar policymaking processes. Agreement on the suitability of a policy area passing onto Brussels still leaves complex negotiations about its implementation, as some governments may agree in principle on the need for EU competence, but fear for the specific impact on their national policy sector administration. One of the chief characteristics of the European integration process has been, therefore, the nature of bargaining among member states over details once the broad principle has been accepted. State power and autonomy in specific policy areas vary from state to state, and it is this quotient that is many times protected in intergovernmental bargaining (Kassim and Menon 1996). Ideology, in other words, takes a backseat to interest. In the case of the convergence of social democratic parties in a pro-EU stance, policy initiatives regarding the EU by any one or more parties do not automatically represent a uniformity of views concerning the power and competence of Brussels. Calls by Belgian and French socialists during the Amsterdam Treaty negotiations, for example, to provide protection for public services (state-run public utilities) from the vagaries of the

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INTRODUCTION

EU’s competition policy have little relevance in states where these services are now in the private sector (the UK), or have been for generations (the Netherlands). Thus trying to mobilize sister parties around an issue that is clearly leftist—at least to Belgian and French socialists—found only minimal support. The point is that although social democrats have come to view the EU in a positive light, this is not tantamount to a new and fervent ideological conversion. Rather, it is a pragmatic acceptance of the reality and scope of EU influence. To a certain extent, it is true that ideological change is present, and this is reflected in a reappraisal of the role of the national state as a singular and autonomous actor and environment in an increasingly interdependent regional and global setting. In some social democratic parties the debate on this point has been more strained than in others, and its resolution in general party attitudes toward the EU may continue to contain residual influence. But in the broadest sense, social democratic parties should be characterized as pro-EU in a self-interested posture, and their leaders’ recognition of national specificities and differences prevents a simple replacement of the national state by the EU. Subsidiarity, in other words, is a theme whose relevance extends beyond the preserve of national states. This situation, that is, the constraints previously mentioned and the nature of the pro-EU convergence among social democratic parties, precludes the construction of an organization resembling “party” as understood in national settings. The institutional terrain of the EU, and its relationship to member states, demands an organization suited to the flexibility of the dynamic interstices of its policy process. How do political parties—actors embedded in national constitutional and powerrelational formats—transcend their base in order to affect the new superstructure? In other words, how do national organizations such as political parties preserve their status and perquisites in their home political systems—indeed, remain relevant—while simultaneously creating a new structure adapted to an increasingly influential policy environment? The development of the PES is a clear example of such an innovative response to this state of affairs, for it represents an organizational adaptation to the reality of the EU’s unique institutional architecture, one that has begun to demonstrate tangible results. It is an example of what Olsen (1995) has described as the dynamics

INTRODUCTION

11

whereby “institutions and actors at the European level influence as well as adapt to institutions and actors at the national level, who at the same time influence and adapt to institutions and actors at the European level” (p. 4). The Party of European Socialists The PES is a transnational party federation founded in 1992, and its predecessor, the Confederation of Socialist Parties of the European Community, was launched in the late 1970s. The ostensible reason for the date of CSPEC’s creation was readiness for the first direct elections to the European Parliament in 1979. Social democrats were not alone in supposing that some form of transnational organization was needed, and indeed, at roughly the same period, Christian Democrats and various Liberal parties also created their own transnational party federations, the European People’s Party and the Federation of Liberal and Democratic Parties in the EC, respectively (Pridham and Pridham 1981). The EPP and CSPEC, later PES, constituted (and continue to constitute) the largest parliamentary groups in the European Parliament, and the role and organizational development of their extraparliamentary federations are the most advanced. In this regard, the transformation of the CSPEC into the PES and changes within the EPP over the past ten years suggest that supranational factors and developments are implicated in the attention paid to transnational party federations by their member parties. To a certain extent, both the PES and EPP secretariats acknowledge the competition between their organizations in terms of influencing the European level through the strengthening of their organizational rules and procedures binding member parties together with a transnational leadership and series of activities. The ideological dimension cannot be avoided when comparing the two transnational party federations. The convergence of social democratic parties has been motivated nationally, and the enhancement of the PES is therefore a result of this search for national relevance and supranational influence. The ideological distance between the various parties—expressed on positions over a range of socioeconomic issues—has narrowed over the past ten years, and it is this that has given the

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INTRODUCTION

edge to the social democratic party federation over the EPP. In the case of the EPP, its expansion in membership during the past ten years has diluted the distinctly Christian Democratic element of its identity (Jansen 1998a). The British Conservatives, the Spanish Popular Party, the Portuguese Social Democrats, and some French conservatives, among others, do not share in a postwar ideology that stresses European federalism and a socially conscious welfare state. Contributing to the fragmentation of the EPP has been the German Christian Democrats’ economic policy orientation under Chancellor Helmut Kohl during the 1980s and 1990s, which supported the more neoliberal economic views of conservative parties. Consequently, although one can place the efforts of social democratic parties to build an effective transnational organization within a wider context of national party concern over influencing the broad EU policy direction, the PES owes a significant portion of its present level of development and role to a mutation in social democratic ideology, and in particular to the role of Europe in this revision. The evolution of the PES over the course of the 1990s thus demonstrates the effort by social democratic parties to constitute a partisan force at the European level by fashioning an organization compatible with their twin goals of preserving national relevance while also affecting the EU’s policy orientation (what Peterson [1995] and Peterson and Bomberg [1999] refer to as high politics and history-making decisions driven by a political rationality). The concept that best captures the structure and orientation of the PES is party network (see Chapter 5). The PES serves, in other words, as both a facilitator of the ambitions of national parties at the European level, as well as the organizational framework through which transnational party relations are mediated. Although I am not suggesting in any way that the PES is equivalent to a powerful nationally based political party and all that this pertains to in terms of policy impact, the development of the PES is nevertheless instructive in two ways. First, its development is an example of innovative organization building, as the party network model approximates decisionmaking in EU institutions themselves, specifically the Council of Ministers (Edwards 1996). Second, it reflects critical dynamics within its member parties around the issue of European integration. Although specific policy development may not be the focus per se of the PES, assisting in the setting of collective partisan priorities

INTRODUCTION

13

for the EU is a task that takes into account national party perspectives. In fact, the two phenomena are linked. The most visible success to date of the PES is the drafting and approval by the social democratic Council of Economic and Finance Ministers (ECOFIN) (eleven ministers out of the fifteen) of A European Employment Pact, an innovative policy paper produced by a working party chaired by the Portuguese prime minister, Antonio Guterres, adopted at the PES Congress of March 1–2, 1999. This, coupled with Amsterdam Treaty references prioritizing employment as an EU policy goal (see Chapter 6), is representative not only of the manner in which the organization operates, but also of the development of European policy in crucial member parties. The social democratic response to the challenge of Europe is therefore as much about creating an organization suited to the multidimensional environment of the European Union as it is about raising the profile and need for European action within national parties. The development of the PES, in other words, reflects the broader phenomenon of the emergence of a genuine European-level social democratic perspective. One could also say that the development of the PES illustrates the emergence of new actors genetically imprinted with the logic of their institutional surroundings. To date we have two examples of European-level, potentially neocorporatist, organizations: the Union of Industrial and Employers’ Confederation of Europe (UNICE) and the European Trade Union Confederation (ETUC) (Streeck and Schmitter 1991). In addition, there are now hundreds of single-issue and Euro-interest organizations that lobby various access points in the EU policymaking machine in Brussels. None of these actors is greater than the sum of its members, either in membership density or in organizational hierarchy and differentiation. The PES, on the other hand, although not in a position to force a member party into a particular policy position that it does not favor, nevertheless exerts a form of socialization or Europeanization on party leaders and others that, when combined with the more explicit dynamics of summitry, suggests that its influence as an instrument for the projection of collective national, partisan aspirations derives to a certain extent from the unique environment in which it is engaged—an environment outside the control of any single member. The PES, as a party network linking the EU with national political partisan agendas, has become

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INTRODUCTION

indispensable to its member parties by virtue of its seeming success in establishing new, or different, general policy priorities. It therefore exists for its members, of its members, but also autonomous from its members to the extent to which one can state that EU institutions such as the Council of Ministers are somewhat autonomous from the member states (Edwards 1996). This collective partisan response to the challenge of Europe has gone some way toward creating an organization suited to the ever-deepening complexity and differentiation in which such networks operate (Wessels 1997). This description of the role of the PES reflects the fact that it departs in some fundamental aspects from the activities and functions normally attributed to political parties. As an organization shaped to fit the logic of European politics (which ought to be seen much more clearly as involving competitive partisan pressures than is usually the case), it is not surprising that the main emphasis of its activities is directed in precisely those areas peculiar to the EU, an entity still combining intergovernmental with protofederalist institutional and dynamic traits. The PES is least like political parties in their national contexts in precisely those functions associated with elections and forming governments, although a key feature of the PES, as argued here, is its function of aggregating interests. This is an important point in analyzing European politics today, for with few exceptions (see Hix and Lord 1997; Bell and Lord 1998), most analyses of European transnational parties have viewed them through the lenses of national party experiences. This invariably involves stating that party government is not a feature of EU governance, and consequently Euro-parties are no more than marginal, loose affiliations of party families associated with respective party groups in the European Parliament, which of course does not have the same role as a national parliament, and so on. European political parties, and a European party system, are conventionally viewed as dependent variables of European integration (Andeweg 1995; Pedersen 1996), and it is assumed that their representative and governmental role will occur only after a federal and parliamentary EU has been achieved. This volume, on the other hand, acknowledges initiative, motive, and influence in the development and activities of the PES (and to a lesser degree the EPP), thus perceiving it more as an independent variable. The PES by the end of the

INTRODUCTION

15

1990s represented an actor influencing, rather than simply reacting to, dynamics at the supranational level, and in so doing itself contributed to redefining European governance and the development of transnational society (Stone Sweet and Sandholtz 1998). Indeed, with the arrival of the euro and as the debate around the accountability of the new European Central Bank demonstrates, efforts to coordinate policy priorities for the EU may help in legitimizing it with national electorates. At the same time, the growing intensity of PES activities with its member parties contributes toward their own reformulation of the European issue and their embeddedness in the Europeanlevel political process. The potential policy content of a European social democracy, therefore, is generated both at the supranational level and within the national parties, whose exposure to European political dynamics is increasingly mediated through the PES. Even departures from the PES party network, as in the bilateral “Europe: The Third Way/Die Neue Mitte” (Blair and Schröder 1999) ackowledges the need for “a network of experts, farsighted thinkers, political fora and discussion meetings” (p. 9). In other words, a consequence of achieving certain goals through the intensive use of networks can be the transformation of the associated actors themselves. The PES has become, in a sense, a privileged area within the overall interaction context (Lewis 1995) of EU governance. Plan of the Book The argument of this book is primarily organized around the efforts by social democratic party leaders to project their interests collectively into European Union policymaking. As such, it is necessary to discuss the political and ideological dynamics that have brought social democratic parties to this point of concerted action. Consequently, the level of analysis aims at elucidating trends that are transnational and supranational. This does not mean that national party politics, or even the nature of national contexts, are not a crucial part of the argument, but they are utilized in order to provide necessary background and where appropriate develop points in the theoretical discussion. This book is, therefore, not an exposition of the European policy of selected social democratic parties; rather, it is an analysis

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INTRODUCTION

of the creation of a European actor. Various approaches, generally from political science, are employed in constructing my argument, from political party analysis to European integration studies. In the end, the developments presented in this book may disappoint those for whom “reclamation both of the basic principles of representative democracy, and of any prospects of effective macroeconomic policy, requires the construction of a true federal framework in Europe” (Anderson 1994, p. 22). Rather, the evidence presented suggests partisan activity at the European level, but not directly translating into a Europeanlevel party system; a European Union macroeconomic policy orientation, but not a reborn European-level Keynesianism; a Europeanization of domestic politics, but not a shift of political actors’ “loyalties, expectations and political activities toward a new center” (Haas 1958, p. 16), at least not in any wholesale manner. What does appear clear is that adaptation by social democratic parties to the challenge of European Union has stimulated new and innovative dynamics that counter simplistic neofunctional and intergovernmental expectations of European politics, and instead substantiate the picture of complexity painted by advocates of the multilevel governance thesis. The discussion is presented as follows: Part 1, “The Challenge of European Union,” is concerned with presenting the multidimensional nature of the impact of European integration on political parties. In Chapter 2 the threat to party relevance is analyzed. This is presented within the wider context of the effect of European integration upon national sovereignty and the erosion of the distinctiveness of the left-right division in competitive politics. Chapter 3 narrows the analysis of the impact of European integration on party relevance to social democratic parties. In this discussion, the prime location of the national state in social democratic ideology is treated as a central factor in the disparate nature of social democratic parties’ debate and response to Europe integration. In Part 2, “Adaptation and Innovation by Social Democratic Parties,” social democratic responses to the growth in Europeanlevel policymaking are explored. Chapter 4 explores changes in selected social democratic parties regarding their perspective on the utility of the EU for achieving national policy goals. An element of convergence among social democratic parties, on issues such as the role of the state and the EU, prefigures concrete

INTRODUCTION

17

transnational cooperation. The change in this ideological dimension is crucial for national parties to view the purpose and actions of the PES in a complementary, rather than in a competitive, light. Chapter 5 introduces the concept of party network by arguing that once a notion of building a European-level partisan organization breaks free of national organizational ideal-types, and instead adapts to the unique structures and dynamics of the EU, then new formats for policy influence may be developed. The multilevel context of EU governance is also presented in this discussion, along with evidence of the organizational and political activities that demonstrate the utility of the PES for national party leaderships. Chapter 6 focuses on the output of PES efforts to influence the EU agenda. Through an analysis of PES-sponsored activities aimed at highlighting employment in the Amsterdam Treaty, to developing the beginnings of a European-level economic policy to complement EMU, the PES has demonstrated a capacity for facilitating the development of common policies. Finally, in Chapter 7, I consider how the current state of social democratic coordination— through the PES as well as intergovernmentally—may be viewed as the early stages of a truly European social democratic presence and also what this development means more generally in the study of the interaction between national and European politics.

PART 1

The Challenge of European Union

2

European Integration and Party Relevance

This book is concerned with the organized response of social democratic parties to the increased scope of European Union policymaking in the 1990s. As such, an important focus is the impact of European integration on political parties generally. The aim of this chapter, therefore, is to demonstrate how political parties, especially those with a governmental vocation, have had their relevance as actors offering competitive policy packages to voters—that is, parties as purposive actors—undermined by supranational decisionmaking and, by implication, how this affects the efficacy of party government itself. In order to do so, one must be careful to distinguish between problems affecting political parties generated by European integration from those generated by other sources, or existing prior to the salience of the European factor. In the political science literature, there exists a sizable amount of studies regarding an alleged “decline of parties.” Popular disenchantment with political parties has several causes, but it is my contention in this chapter that increased policy competence by the EU aggravates this situation. This chapter begins by developing the notion of a growing danger to party relevance as a by-product of the Europeanization of EU member states. Next, I focus on a few key points that highlight the general constraints on parties from operating within the EU policy- and decisionmaking process. Finally, the chapter ends with a discussion of the impact of European integration—or at least its problematic contribution among other inputs—on the blurring of partisan identities. 21

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Party Relevance and the European Union Public disenchantment with political parties preceded the postMaastricht politicization of European integration. In the political party literature, the most frequently cited causes of party decline include changes in the social structure of European countries, new patterns of individual behavior, and the behavior of political parties together with the issues that concern them (Gallagher, Laver, and Mair 1995). In addition, some analyses point to antiparty sentiment mobilized by political elites “who genuinely and fundamentally challenge party government or even democracy” (Poguntke 1996, p. 340). Katz and Mair (1995) have advanced the thesis of the emergence of a new model of party organization and party democracy, the cartel party. The chief characteristics of this party model, as compared to the previous mass and catch-all party models, are its position between civil society and the state—“Party becomes part of state”—and its representative style—“Agent of state” (p. 18). The cartel party model is primarily characterized by the “interpenetration of party and state, and also by a pattern of inter-party collusion” (p. 17). State officials begin to occupy more of the higher positions in the party hierarchy, thus adding to the growing distance of the party away from society, that is, from the sources of popular mobilization. The significance of this perspective on the relationship between parties and citizens is the attention drawn to the growing sense of a lack of choice. Mair (1995) has further elaborated the impact of the remoteness of parties from civil society on their legitimacy. Although drawing a distinction between party change and party decline, he nevertheless suggests the possibility of this remoteness “undermin[ing] the legitimacy of party government itself” (p. 54). A paradox in this matter is that in some ways parties have not declined; rather, they have strengthened certain functions, for example, the recruitment of political leaders and the organization of government. At the same time, other classic functions such as the articulation of interests and the aggregation of demands, and, to a certain extent, the formulation of public policy, have eroded. It is in this last sense that parties are becoming less relevant. When speaking of the danger of eroding party relevance, Mair points to party “relevance in purposive terms” (p. 46). The

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capacity of parties in government to guide and control domestic policymaking has been affected by forces such as globalization. This, in turn, according to Mair, influences the capacities of parties in government in two ways. First, the scale of penetration of domestic economies by transnational actors and financial flows means that “they cannot always respond to domestic demands in a way which fully satisfies the local interests on which they depend for their legitimacy and authority.” Second, the sheer “complexity of the global economy leads to severe problems for the monitoring and control of the policymaking process, and hence undermines the capacity for effective and authoritative action” (p. 47). The result of these trends is twofold: parties are seemingly less able to convince voters of their partisan intent, and at the same time electorates question the efficacy of party government. The European integration process is implicated in this deterioration of national party efficacy. During the 1990s the growth in the scope of EU policymaking resulting from the transfer of national policy competences was perceived as reducing the maneuverability and autonomy of government in sensitive areas, and this increasingly translated into public consternation and anti-EU political mobilization. Because the EU is more readily identifiable to citizens than the impersonal forces of globalization, the lack of partisan influence in EU decisionmaking was made all the more apparent. Indeed, “precisely because decision-making within Europe itself is not seen to be mediated by party . . . this is likely to undermine even further the relevance of party in representative terms” (Mair 1995, pp. 47–48). Although it has been argued that a justification for the early postwar inauguration of the European integration process was in fact the strengthening (or rescuing) of the state by transferring certain problematic policy areas to supranational responsibility (Milward 1992), the type of policies transferred to the EU in the 1990s were of a qualitatively different sort. The type of policy jurisdiction transferred in the 1950s essentially allowed the state, now less encumbered by responsibilities that complicated economic and political stability—for example, coal and steel production, foreign trade, and agriculture—to focus on legitimacyenhancing policy expansion, that is, the Keynesian-managed welfare state/economy. The “common policies of the European

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Community came into being in the attempt to uphold and stabilize the post-war consensus on which the European nationstate was rebuilt. They were part of the rescue of the nation-state” (Milward, p. 44). At the beginning of the twenty-first century, even though the motivation for policy transfer to the EU can still be defended on grounds of enhancing citizen welfare and wellbeing (although in some cases neoliberal assumptions form the basis of such a defense, for example, the competitiveness argument), the type of policies and issues in question are not resulting in any discernable enhancement of the legitimacy of the national state, nor for that matter the EU. In fact, and although it may in part be a problem of communication (or lack thereof) informing and justifying to national electorates the reasons for transfer, it is fair to say that the integration process—the Europeanization of the nation-state—has contributed somewhat to the weakening of national legitimacy. From air transport to telecommunication to state aid policy, and especially monetary and exchange rate policy, it is difficult to see how the state has been strengthened in order to pursue other pressing priorities. In fact, in the absence of national control over monetary policy in Euroland, “the potential role of fiscal policy assumes greater importance. It becomes one of the few remaining means through which individual countries within the Union can influence their own macroeconomic situation and respond to country-specific developments” (Gregory and Weiserbs 1998, p. 51). However, the “provisions of the Treaty place strict limits to the overall outcomes from any exercise of national fiscal autonomy” (p. 52). Garrett (1998) notes that “even if economic integration creates incentives for governments to use fiscal policy for redistributive purposes, they are constrained from doing so by the threat of capital flight. Governments cannot tax mobile capital to pay for spending. Therefore, they must either cut spending or shift the burden of taxation from capital to labor— undermining the net redistributive effects of fiscal policy” (p. 4). The EU, as I have suggested, further aggravates this loss of national policy instruments (monetary policy) without adequate corresponding measures at the European level. By the end of the 1990s, the national state appeared, rightly or wrongly, emasculated by both Brussels and the larger dynamic of globalization, a phenomenon invoked as both a danger to national welfare and an opportunity and challenge to modernize. Some anti-EU ar-

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guments are in fact based upon a perceived need to rescue the nation-state from the EU by attacking the transfer of certain vital policy competences that have the effect of dissolving the social contract between state and citizen (the case of French public services and the EU’s competition policy is a case in point). Justifications regarding the need to make national economies more competitive—or else to transfer to Brussels certain national competences in order to resist global liberalization by developing a regional bloc strong enough to bargain and affect international financial and trade rules—are often poorly communicated or else simply not effective nor convincing enough to assuage shortterm dislocations. In the end, while on the surface national systems may seem to remain intact, market integration and the fragmentation of internal sovereignty to which it, in the absence of a supranational state formation, gives rise—changes the substance of national policy. As nation-states gradually turn into highly interdependent, partial political jurisdictions embedded in a much larger and ever more integrated international economy, their agendas become dominated by three kinds of subjects that tend to crowd out more traditional concerns: (1) The transformation of formerly national into international markets . . . (2) The co-ordination of national economic policy in line with the requirements of integrated markets . . . (3) The restoration and defence of national competitiveness in an international economy. (Streeck 1996, pp. 308–310)

Another prominent version of the thesis that the state has been strengthened by European integration is offered by Moravcsik (1994). Put simply, national executives have been particularly strengthened over the course of the European integration process, as they are in a position to mediate (or act as gatekeepers) between Brussels and other domestic actors and interests. Regarding the issue of the EU’s democratic deficit and implications for EU legitimacy, Moravcsik asserts that the efficiency of EU policymaking over the past three decades is positively attributable to the fact that “insulated executives can resist from particularistic groups, pursuing policies in the interest of a broader spectrum of society. . . . Hence, while democratization may create greater legitimacy in the short term (though this remains to be seen), a possible, but paradoxical consequence in

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the long-run may be a further erosion of precisely the popular support that democratization seeks to restore” (pp. 56–57). The strengthening of the executive and its effect on the efficiency of EU policymaking may have been operable during the period of generally quiescent public opinion on European integration, what has elsewhere been referred to as the “permissive consensus” (Lindberg and Scheingold 1970). The various national mobilizations in the wake of the Maastricht Treaty and the very high-profile government actions to achieve EMU membership on schedule, however, mark a watershed in public attitudes toward the EU, thus problematizing this efficiency of national executives. The EU’s ability to launch policies of a historic nature such as monetary union in fact draws attention to its weak internal democratic basis. Consequently, as the EU’s profile has grown in the eyes of national electorates, the ability of parties to influence the increasingly pervasive effects of EU legislation has diminished. During the referendums in Finland, Sweden, and Norway in 1996 concerning membership in the EU, the strength of the “No” campaigns were based on a perception of a corresponding loss over national destiny, even cultural characteristics, that would occur as a result of Union membership. Adding to this predicament, governments disingenuously blame the EU for the resulting hardships (Smith 1997). This tactic presumably deflects attention away from the fact that member-state executives desire the policy transfer in the first place. In the short term this may indeed seem a rational course of action, but the accumulation of “don’t blame me, blame Brussels” serves only to emphasize national impotence, a bearing contributing to the legitimacy problem of party government. Consequently, although deflecting domestic critics by invoking the influence of European factors, as in the case of pursuing disinflation policies in the 1980s as part of the commitment to the European Monetary System (EMS), this justification for the pursuit of unpopular and costly policies began to diminish with the widespread public recognition that long-term (and growing) unemployment was the product of this policy. In other words, though the fight against inflation may have indeed been won by the mid-1990s, this was not translated into public opinion dividends. This returns us to the role of political parties. As Gaffney (1996) has pointed out, it is the manner in which critical policy

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transfer has been formulated and decided upon—and here the Maastricht Treaty on Economic and Monetary Union is in particular so significant—that has generated popular mobilization, often outside mainstream party control. It is “probable that much of this feeling against Europe and the European Union was a form of sanction, not of the principle of further integration but of the process; a process which was not integrated into the democratic procedures of sanction or endorsement by national polities, or by the European population as a whole” (Gaffney, p. 21). The dilemma, according to Gaffney, is that it is precisely the role of political parties to “act as forums for debate, aggregators of interest and opinion, ‘transmission belts,’ ‘linkage mechanisms’ or ‘shock absorbers’ in the integration process . . . and [they] are struggling with their role” (p. 21). To sum up, political parties have been impacted by the growing scope of EU policymaking by virtue of the fact that national government has become increasingly constrained in its ability to autonomously determine critical areas of domestic policy. Further, the implications of this reduced scope for national government impact parties to the degree to which they can promise to change government policy during election campaigns. This is similar to what Cerny (1990) refers to as the increasing constraints on the capacity of parties to process key issues. He concludes that, in the circumstances of the 1990s, “as trans-national interpenetration of structures and the refocusing of the state along lines of international economic competition come to channel and even drive the dynamics of political agency along new lines, the opportunities for political officeholders at the nation-state level to fulfill the expectation which voters, in particular, are supposed to have of them are likely to shrink further” (Cerny, p. 144). Less maneuverability for national government in monetary policy deletes an entire area of economic policymaking that parties had traditionally been able to promise to change as part of competitive party politics. The relevance and role of parties in a liberal democracy is thus called into question by dynamics in an external environment taking upon itself some, but not all, the characteristics of a state. In what has been argued so far, I have noted that the EU indirectly impacts political parties through its effects on national autonomy in selected policy sectors. I now turn to the various ways in which political parties are directly marginalized at the European level.

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Parties in the EU Process Gaffney (1996) presents three fundamental problems regarding party activity at the European level, two of which will be dealt with in this section. First, there is a “real lack of relationship between the European citizen and the party as an expression of aggregated citizen interests” (p. 18). Here the absence of European issues animating elections to the European Parliament demonstrates the overwhelming dominance of the national dimension of party activity. Second, there is the well-known fact that “the EP has little power, and therefore its lack of perceived importance is compounded” (p. 18). Although the EP’s place in EU interinstitutional policymaking grew in the 1990s, its attraction has resulted in increased lobbying, not in party or public opinion attention. Hix and Lord (1997) further develop the problems parties encounter in attempting to operate within the institutional environment of the EU. The first and most obvious characteristic of the EU system when considering the role of parties is that it does not conform to the political-institutional framework necessary for party government. The absence of an elected executive whom electoral campaigns consisting of alternative policy platforms can directly influence explicitly deprives political parties of a central activity. Hix and Lord add to this the “shape” of the party system itself at the European level (such as it exists). According to them, the “strategic environment” of EU politics precipitates cross-party family (or EP party group) interaction based on the integration-sovereignty dimension, thus preventing a straightforward transmission to the European level of the traditional domestic left-right dimension. This strategic environment “consequently undermines the possibility of competition between political parties replacing the existing structure of political competition in the EU between the European nation states” (p. 74). Finally, Hix and Lord suggest that the continuing dominance of national party leaders over party actors at the European level—EP groups and party federations—“prevents the emergence of unitary hierarchical party leadership structures that are geared towards the pursuit of European-level office and/or policy goals” (p. 74). Taking Gaffney’s and Hix and Lord’s critiques together, the constraints on party activity as traditionally understood are

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formidable indeed. There is, however, another impediment to nationally based parties exerting influence at the European level, alone or in concert with others from the same party family or otherwise. This is the difference between the role of party in domestic policy versus that role in foreign policy, at least to the extent that it had been acknowledged until the 1990s. European policy in most EU member states had been regarded as essentially foreign policy, an area wherein the executive is comparatively less encumbered by usual domestic politicking. One of the mechanisms through which national parties scrutinize government action is some sort of parliamentary oversight, and this applies to government as well as to opposition parties. In the case of European policy, there are several factors that render this activity less effective. The first is that parties are generally told after the fact of government positions and decisions in the Council of Ministers. Only the Danish Folketing has had the right of prior knowledge of ministers’ positions before council meetings, and in fact the right to approve or disapprove of the position in question. In general, then, parties in parliament are not part of the national process of EU decisionmaking. Another factor is the absence of a central government ministry coordinating all policy deliberations concerning the EU; rather, all ministries concerned with the specific policy issue are involved. Consequently, it is difficult for parliamentary committees to have a broad view of government policy toward the EU. Finally, until the mid-1990s, most member-state parliaments did not have a committee or subcommittee specifically charged with EU affairs; most subsumed EU affairs under the responsibilities of a foreign affairs committee, thus minimizing the opportunity to develop expertise in EU legislative matters. The penetration of the EU into more and more policy sectors in the late 1980s and early 1990s, together with its higher political profile, was a prime factor in growing parliamentary specialization in EU matters (Maurer 1995), with many parliaments insisting on their prerogatives in EU matters (the German Bundesrat and French National Assembly are good cases in point). Finally, let me note one additional factor regarding party activity at the European level in regard to the party government model. A central function of parties in liberal democracies is to provide efficient policy coordination. Hix and Lord in their analysis of party activity in the EU note the fact that the

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commission does not conform to a national executive because of its appointive, rather than elective, basis. In addition to this characteristic, Peters (1996) states that political parties cannot perform the function of coordinating policy priorities in the EU for, among other reasons, the very nature of the composition of the commission. Not only does the fact that it is appointed problematize its democratic legitimacy, the commission “reflects the configuration of forces in these countries more than it does the distribution of partisan allegiances within the EU itself” (p. 67). This is made more complex by the fact that “there are separate national policy styles that are embodied in the individual commissioners . . . [such that] . . . their styles and cultures are as important in determining their behaviour as any specific calculations about national advantage they might be tempted to make” (p. 67). The growth of powers for the European Parliament, usually seen as a prerequisite for a more parliamentary and party-friendly EU, would therefore still depend upon fundamental change in the EU’s putative executive. The Impact of European Integration on Partisan Identity The third fundamental problem regarding party activity at the European level according to Gaffney is “that traditional political identities are themselves shifting, if not diminishing” (1996, p. 18) in terms of party group activity within the EP. This is a reflection, to a certain extent, of the fact that the two largest groups, the PES and EPP, join together on crucial integrationenhancing legislation, and this particular coalition complicates the process of building a more straightforward left-right division in the Parliament. This dilemma is significant in that it links the perceived lack of choice in domestic policymaking—as a result of globalization and European integration—to a blurring of the traditional leftright cleavage on economic and social issues. This dynamic operates on two levels, the European and the national. At the European level, officially sanctioned partisan activity is absent in the work of the European Commission and the Council of Ministers, and one could go so far as to say that consensus is the EU

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style of decisionmaking. In the EP, as already mentioned, on those issues related directly to the progressive institutional development of the EU, as well as on the EU budget, the prointegration coalition consists primarily of social democrats and Christian Democrats. Many have pointed out (see in particular Hix 1998) that this has the effect of producing a prointegration versus antiintegration axis in the EP, diminishing or decreasing the creation of left and right identities related to the cleavages recognized in national politics. In terms of allowing EP party groups to serve as potential linkages between EU politics and national electorates, this situation prevents citizens from interpreting EU affairs on the same bases that structure domestic politics. On the national level, parties find it difficult to explain the reasoning behind the coalition because it is not instantly recognizable as a means to achieving traditional policies. The development of more clearly defined political issues that reflect the left-right division at the European level would necessarily involve more institutional reform, specifically involving an expansion of the number of areas in which qualified majority voting is permitted. But institutional reform, again, requires an enlarged EP majority—two-thirds—in order to bring it about, and this means preserving the prointegration coalition. At the national level, the perceived lack of choice in policymaking cannot be solely attributable to the EU, but as I stated at the outset, it does aggravate an already existing difficulty. The blurring of the left-right division in some respects can be traced back to the development of the West European welfare state itself, as it did involve compromise on the part of former political enemies. It took a different form in various countries, from the Swedish model to the social-market model of West Germany. More recently, as Mair has stated, the evolution of the global economy since the 1970s, in particular the wave of neoliberal reforms in the 1980s, has had the effect of rendering radical policy alternatives less likely. The experience of the French Socialist government under President François Mitterrand in the early 1980s was particularly significant as an example of the constraints—even on such a strong state as the Fifth Republic—in pursuing an autonomous direction in economic policy. As for the effect of the EU on blurring the distinctiveness of left and right in domestic politics, it is in economic policy that the European dimension has had its most visible effect. In

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France the policy of maintaining the franc in parity to the German mark throughout the 1980s and 1990s, the so-called franc fort policy, had several direct consequences, but the most readily comprehensible to public opinion was the maintenance of relatively high interest rates and stubbornly high unemployment. With the government unable to set interest rates voluntarily as part of a broader management of the economy, and in particular for narrowly political purposes (the often-resorted-to election-time manipulation of interest rates was not confined to either the left or right), the cogency of alternance in party government was weakened. The commitment to monetary union, and the mix of interest rate and debt ratios to be met in conformity to that set out in the Maastricht Treaty on EMU, simply lent an even greater visibility to the EU in domestic affairs. With one arm figuratively tied behind its back, neither socialist nor conservative French governments during this period were able to make a convincing case that they had the answer to the rising unemployment of the time, a central and pertinent issue to the electorate in general, other than asking for trust (and time) in the integration process. In fact, in France, this policy stance was referred to as la pensée unique. Variations on the French case can be illustrated in many other EU member states. From the various center-right and center-left coalitions in Italy in the 1990s, to the last Papandreou government and the subsequent government in Greece in the latter half of the 1990s, to the Swedish social democratic governments since 1995, the convergence between left and right macroeconomic policies was determined by a voluntary commitment to meet the convergence criteria set for monetary union (though the two political sides used different economic reasons justifying their strategies—social democrats invoking external constraints and conservatives pursuing a neoclassical orientation [Notermans 1995]). The emphasis in the criteria on reducing budget deficits—a budget deficit of less than 3 percent of GDP and a public debt ratio not exceeding 60 percent of GDP—has also had several consequences. The first was to effect a reevaluation of the nature of social welfare expenditures. Expansion in such services was not an option open to most governments of the time, and in fact this sector of public spending was viewed by both left and right as a soft area in which to look

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for savings. According to Gregory and Weiserbs (1998), as “with deflation a decade earlier, the EU, through the Maastricht criteria, has administered a timely push, stiffening the resolve of national governments in cutting welfare provisions and social expenditure, while giving them the opportunity to deflect part of the resulting unpopularity” (p. 52). This in turn generated public debate about the direction of European integration and its part in determining the future of the “European model of society,” whose existence, based on the welfare state, was perceived in some quarters as being in danger of devolving into a variation of the “American model of society.” This debate was most acute in those member states with the most advanced social welfare regimes, and a consequence was not only to perceive social democrats and conservatives as playing the same tune, but also to call into question the very identity of the state in these societies, from Scandinavia to France to Germany. In other words, the seeming dominance of neoliberal prescriptions for seemingly a range of socioeconomic problems, increasingly connected in the public’s mind with the nature and direction of the EU itself, began to affect the legitimacy of the postwar state. This apparent silence on the part of the left regarding EU policy formulation has also contributed to (or accelerated) an evident change in the function of the state itself, in particular for those member states in which a significant state-run public sector exists. The EU’s competition policy, together with the drive to meet the monetary convergence criteria, put a premium on privatizing many public services, ranging from telecommunications and banks to large state-run industrial holding companies. Among the countries in question, the most prominent are France and Italy, although the impact on state identity is also great in Greece and Belgium. Although the nationalization of these enterprises sometimes preceded World War II, again, as part of the postwar political settlement between left and right political forces, the role of the state came to be seen as part of the social contract between citizen and state. Over time the state sector became identified more with the left, especially as public sector trade unions were in general allied to left political parties, socialist and communist. Consequently, where leftof-center governments in these countries have presided over the

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partial dismantlement of this sector, their distinctiveness from the neoliberal right has been diminished. To conclude this section, I must stress that the so-called crisis of the left, or, in other words, a lack of policy distinctiveness from the Christian Democratic and conservative right, has been identified by many commentators over the past ten to twenty years. The input of European integration to this state of affairs should be understood as an additional factor explaining specific government and campaign decisions on the part of those parties with a governmental vocation. Still, after the economic austerity policies of the late 1970s and 1980s, which could be explained by both left and non-Thatcherite conservatives as involuntary responses to explicit global events—the oil crisis– induced recessions of the 1970s and early 1980s, and U.S. monetary policy in the early 1980s—the voluntary commitment to the single market and monetary union as they were devised does suggest a qualitatively different dynamic at work regarding the evolution of party elite understanding of the linkage between “grand bargains” at the European level and domestic support (Youngs 1999). Conclusion Political parties—despite evidence that they are or have been in decline due to external factors such as the effects of globalization, or internal ones such as corporatism, cartel-like collusion, the rise of new social movements, and so on—have not been replaced in the formal politics of representation and the linking of citizens with government. Nevertheless, as this chapter has demonstrated, the Europeanization of domestic policymaking, together with the effect upon the relationship between executives and political parties operating in parliaments, has increased the remoteness of key decisionmaking from domestic electorates. This not only affects the role of parties in the policymaking process (and, after all, if according to Peters the absence of party influence at the EU level contributes to its problem of policy coordination, does this not suggest some sort of negative spillover into the domestic sphere?) but it also affects the larger question of how this impacts one of the core principles of representative democracy.

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Held (1991) has suggested that the increased power of decisionmakers outside the normal channels of public accountability raises questions that affect the very legitimacy of national democratic procedures and norms. Consent, according to Held, and the particular notion that the relevant constituencies of voluntary agreement are the communities of a bounded territory or a state, become deeply problematic as soon as the issue of national, regional and global interconnectedness is considered and the nature of a so-called “relevant community” is contested. . . . The implications of this are profound, not only for the categories of consent and legitimacy but for all the key ideas of democratic thought: the nature of a constituency, the meaning of accountability, the proper form and scope of political participation, and the relevance of the nation state. (p. 143)

Proposals for eliminating the so-called democratic deficit of the EU (see, inter alia, Lodge 1989, 1993; Williams 1991) have usually focused on enhancing the powers and role of the European Parliament vis-à-vis the commission and council. Consent, as transmitted more clearly and directly through European Parliament approval, would presumably help to legitimize EU policies, if not the regime itself. However, as has been demonstrated elsewhere (e.g., Andersen and Eliassen 1996), the deficit in accountability resulting from European integration also affects the domestic operation of representative politics. The strengthening of the executive in its dealings with EU policymaking has further removed parliamentary oversight and scrutiny of EU legislative matters, reducing national parliaments to essentially reactive bodies (exceptions to this state of affairs do exist, most notably in the case of Danish legislative-executive relations). Into this discussion, the role of parties operating at a European level in a more powerful European Parliament must be considered crucial. This is due to the fact that because the democratic deficit exists on a national level as well, the role of parties as linkage mechanisms between levels assumes an even greater significance. Political parties have been one of the key instruments through which political participation and government accountability have been linked in Western Europe. The development of

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the European Union, especially in the 1990s, was simply another element impinging on the role of political parties, which, nevertheless, have historically adapted to changes in their environment. In the case of the EU, as this book will demonstrate, a development of this kind has been evolving. However, before I turn to responses by political party families to the challenge of European Union, I will focus, in the following chapter, on what European integration has meant specifically for social democrats.

3

European Integration and the Social Democratic Dilemma

As the previous chapter demonstrated, the process of European integration and the expansion of policy competences by the EU, especially since the launch of the Single Market Programme in the late 1980s, has serious consequences for the role of political parties, and, by extension, for the operation and legitimacy of representative politics, at both the national and the European levels. In this chapter I narrow the analytical focus to social democratic parties. Are social democratic parties more profoundly affected by growing party irrelevance than conservative, Christian Democrat, or liberal parties? I argue in this chapter that the answer to this question is yes, and it is the specific dilemma of social democratic parties that has driven them—more than any other party family—to the type and degree of organizational response that later chapters in this book will present. However, as I noted in the beginning of the previous chapter, it is necessary to isolate those factors resulting in the specific problem under study from those contributing to a more general state of affairs. Probably no party family has attracted more critical and scholarly attention over the past twenty years to its problems and prospects—in particular, to its alleged state of crisis or decline—as that of social democratic parties. Although there are complex linkages between the causal factors defining the general “crisis of social democracy” and those that account for the dilemma of these parties in relation to European integration, the aim of this chapter is to further develop the case for the latter phenomenon. The chapter begins with a very brief introduction to the thesis of a decline in 37

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the fortunes of social democratic parties. Next, I will develop the argument that the evolution of the EU since the mid-1980s has had a distinct impact on social democratic parties, adding to their more general predicament. The Crisis of Social Democracy I have already noted that popular disenchantment with political parties has several causes, and that these precede the relaunch of the European integration process in the mid- to late 1980s. When discussing social democratic parties as a subset of political parties more generally, one can isolate several factors that have together generated the condition labeled “crisis” or “decline.” Of course, all of these parties differ from each other in terms of national historical contexts, in the features of their respective national party systems—for instance, possible alliance partners in coalitions, and internal organizational and ideological legacies (Piven 1991). Despite these variations, there are nevertheless some common elements and problems that have appeared to characterize most social democratic parties since the late 1970s. First of all, in general electoral terms, from the end of the 1970s until at least the mid-1990s, social democratic parties, with few exceptions, seemed consigned to the role of opposition (see Merkel 1992 for a counterargument regarding decline). Second, and inextricably connected to the electoral element, there was an explicit moderation on the part of many of these parties regarding their policy programs as part of an emphasis on securing electoral victory. This is not to overstate a case for political opportunism, simply to point to the fact that a strategy aimed at enhancing the party profile and image during the 1980s resulted in a perceptible distancing from legacies tied to the party’s past identity, especially where state action in the areas of social welfare and taxation were concerned (Gillespie 1993). Third, a noted decline in the traditional areas of electoral support—in particular, an erosion in working-class voters—signaled an especially foreboding long-term secular trend affecting electoral prospects. Renewed competition on their left from Green parties and postcommunist parties, as well as new social movements, also complicated party strategies (Kitschelt

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1994). Environmental conditions such as deindustrialization and economic internationalization or globalization also seemed to undercut social democratic government policies and their traditional sectors of support, namely trade unions (Piven 1991; Anderson and Camiller 1994). Taken together, these elements— and this is admittedly a very short list of the elements that many have suggested have led to a decline of social democracy—indicate that the overall effect has been to render social democratic parties less distinct in crucial policy areas from their competitors to their right. The end of an era seemed at hand (Lemke and Marks 1992). Apart from brief, added-on accounts of the European Union as a background presence, the impact of European integration upon social democratic parties is notably absent from this crisis literature (exceptions are Telò 1993 and Wilde 1994). In order to appreciate the influence of the EU on party strategies (though not confined solely to social democratic parties), one must turn to a very limited literature (e.g., Featherstone 1986, 1988; Gaffney 1996; Johansson 1996; Ladrech 1993a; Ross 1991). The analytical literature that presents a case for the decline of social democracy, by and large, does not implicate the process of European integration as part of the indictment. There are possibly two reasons for this lacuna. First, the main elements in the crisis or decline argument—shrinking electoral and social basis, deindustrialization, and the rise of new social movements— were already notably significant by the mid-1980s. Second, the attention generated by the renewed pace of European integration did not have a measurable political impact until after the signing of the Maastricht Treaty in the early 1990s. Regarding this last point, one must recognize that, until recently, political party analysis and European integration studies were two entirely separate enterprises, neither of which intersected: few studies on party strategies and Europe, even fewer analyses investigating the changing role and impact of the process of European integration upon parties. In order to isolate and identify the unique input that European integration has had on social democratic party fortunes, it is important to link the impact of European integration on party relevance, which is necessarily bound up with a critique of the changing nature of national state power, with the choices of

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social democratic parties. This involves identifying what is distinctive about social democratic parties, that is, understanding their particular contribution to politics and the relationship of this identity to the national state. In this manner we can focus on how the process of European integration has affected social democratic identity through the changes in state functions and processes, especially as they have become more Europeanized over the past decade. European Integration, Social Democracy, and the State In the previous chapter I argued that the process of European integration, especially since its relaunch in the mid-1980s, has had increasingly debilitating effects on the relevance of national political parties as purposive actors able to present competing programs to national electorates. Although the role of parties and that of parliaments may be rendered problematic, I have suggested that not all aspects of national government, nor even the national state itself, have been necessarily in danger of disappearing. The argument in Chapter 2 regarding party relevance was a critique of changing political practices, altered due to developments both spatial—the European Union—and ideological—the convergence of the center-left and center-right around a neoliberal economic paradigm. Therefore, Europeanization of domestic politics can in many ways be defined, in part, as an adaptation to these new constraints and perspectives on the part of state actors. Still, in order for us to isolate the factor in European integration that has most directly affected social democratic parties, a closer analysis of the historical record is required. Though a comprehensive account of the past forty years is impossible to convey in one chapter, presenting the specific changes in the relationship between social democracy and European integration is possible. Briefly, social democracy developed its governmental vocation at the same time that the national state came to redefine itself in the first two decades after World War II. This postwar national state—later to acquire the additional label of welfare state—although not solely constructed or devised by social democratic parties, nevertheless be-

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came the expression of the social democratic project, namely, the peaceful transformation of society. As a prime component of their partisan identity, social democratic parties have privileged the role of the state in order to promote social transformation. As Butler (1995) argues, “socialism’s strength and distinctiveness lie in its strong conception of political agency” (p. 3). In the course of the evolution of socialism over the past one hundred years, its “practical politics turned to social democracy in the modern nation-state. Substituting state for class, and nation for capitalism, the left maintained its transformative conception of politics” (p. 20). The linkage between the social democratic project and the growing danger to the relevance of parties in their ability to devise and implement distinct policy programs for change is at the heart of the relationship between European integration and the crisis of social democracy mapped out in this chapter. Rescue of the Nation-State and Social Democracy Social democracy has a generally perceived cross-national identification, but its implementation has rested upon specific national histories and conditions. Consequently, one cannot speak of a single social democratic plan or policy package that fits all countries, even if restricted to Western Europe. The difference regarding the role of the state in the area of economic intervention, between France and Sweden, for instance, is enormous and affects the strategies and policy choices open to social democratic parties in these countries. This being said, there nevertheless remains a comparative partisan difference between parties on the left and those on the right of the political spectrum. The formative period for most social democratic parties regarding the development of their governmental identities (as opposed to their accommodation with parliamentarianism between the end of the nineteenth century and the 1920s) occurred from the end of World War II until the early 1970s. During this period economic reconstruction and later expanding redistributive and social welfare policies occupied the policy programs of social democratic parties in government, from Scandinavia to the Lowlands to France and Britain (Ladrech and Marlière

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1999). Although the formats and policy tools may have differed among countries, the social democratic model “had rested on basic assumptions that the economy had been brought under political control through an interventionist state” (Padgett and Paterson 1991, p. 49). Social reformism and economic state management defined social democratic parties from competitors to their left (where this occured vis-à-vis communist parties) and to their right, even if by the 1960s at election time “political competition increasingly revolved around competence and efficiency” (Padgett and Paterson, p. 35). Perhaps as a residue of social democratic ideology from the interwar period and the immediate years after World War II, social democratic parties were nonetheless viewed by electorates and their own party members as the champions of the interventionist state. Though in practice social transformation may not have been achieved even by longserving social democratic governments, as in Sweden, programmatic self-definition contributed to their identification with the state as a tool for social and economic change. The role of the state in liberal capitalist democracies in those first twenty to thirty years of the postwar period was roughly similar—national economic management, the expansion of a welfare state, and so on. Padgett and Paterson point out, though, that it “would be quite wrong to attribute these developments directly to the decisive intervention of government social democracy. . . . However, the form which these developments assumed, their timing and the extent to which they took root in the institutional and attitudinal fabric of political life was related in no small measure to the degree of hegemony of government social democracy” (p. 176). Because of the strong identification with state action, however, the legitimacy of social democratic parties became linked with that of a particular type of state model; therefore, when serious critiques of state economic performance were raised, social democratic political fortunes were often put on the defensive. Keynesian economic management, though practiced by certain conservative parties in the 1950s and 1960s, was most explicitly linked with the style of social democratic governance. The crisis of the Keynesian state model of economic management therefore became a crisis of social democracy. European integration during this period, that is, from the early 1950s to the end of the 1970s, did not present a challenge

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to the legitimacy of the postwar state. Following the Milward thesis, the development of the European Community could be said to have actually strengthened the initially precarious position of West European states, as they faced the enormous tasks of economic reconstruction and the political instability generated by challenges to their legitimacy from the communist left, and by perceptions of external danger from the Soviet Union and economic dominance by the United States (Wegs and Ladrech 1996). With Franco-German cooperation at its center, during the period from the launch of the European Coal and Steel Community (ECSC) in 1950 to the implementation of the Common Agricultual Policy (CAP) and external tariff in the mid-1960s, the founding six countries of the European Community were able to transfer certain explicit elements of responsibility for solving the pressing concerns of economic stability and external trade to supranational hands. By defusing the urgency of these issues, these postwar states were able to pursue other legitimacy-enhancing measures, namely in the area of social welfare. The period in which governmental social democracy became identified with an activist or interventionist national state coincided with the first golden age of postwar European integration. While rendering agriculture, foreign trade relations (regarding tariffs), atomic energy, and other issues subject to supranational and intergovernmental responsibility, the national state nevertheless existed in a regional context in which it continued to practice a nationally oriented and governed economic perspective. The various attempts by West European countries in the 1970s to escape from recession— both center-left as well as center-right—underscore the fact that states had not ceded control of their destinies to the European Community. The role of the EC up to this time had been circumscibed by powerful member states such as France (for example, the 1966 Luxembourg Compromise), and until the mid-1980s, attempts to reinvigorate the process of deeper integration—for instance, by creating a single currency (the Werner Plan in 1970)—were put aside while individual national paths to recovery were sought. Regarding the contemporary period, there are several explanations put forward to explain the relaunch of the European integration process in the mid-1980s leading to the Single

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European Act, and with it the Single Market initiative. In order to develop my thesis of the impact of European integration upon social democracy and social democratic parties in the 1990s, however, the main or core effects of this renewed integration process regarding national state functions must be highlighted. It is my contention that there have been qualitatively different consequences for national state legitimacy as a result of the renewed integration process. If the first wave of European integration could be said to have rescued the nation-state, the integration process of the 1980s and 1990s has undermined certain foundations of these states with implications for social democratic parties. European Integration and the Undermining of National State Legitimacy Let me restate the argument so far. The first period of European integration, that is, from the early 1950s to the beginning of the 1970s, coincided, and may have even contributed to, the success of West European states in their development of the welfare state and in national models of relatively successful state economic management. Social democratic parties, as active participants in these developments, became inextricably identified with the most explicitly state-interventionist aspects of these policies. The successful expansion of state action during this period—a form of political agency—became fused with notions of social democracy, and by extension, with social democratic party identity and legitimacy. The resumption of the integration process in the mid-1980s, on the other hand, rather than helping to stabilize democracy and promote state-led efforts in equitable economic development, rendered national democratic frameworks seemingly subservient to Brussels, undermined national economic management without substituting a similar construction at the European level, and in the process weakened social democratic party relevance through the inexorable evaporation of political agency. When one speaks of the resumption of the European integration process in the mid-1980s, the specific focus is usually upon the Single European Market (SEM) initiative, and more

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generally the Single European Act (SEA), ratified by all of the member states by 1987. The implementation of the SEM depended upon provisions contained in the SEA—for instance, the institutional changes made regarding decisionmaking in the Council of Ministers, that is, the use of qualified majority voting on legislation related to the SEM. Among the other elements of the SEA were an expansion, though modest, in the interinstitutional powers of the European Parliament, especially in relation to the Council of Ministers, and the bringing into Community competence of certain policy areas, such as the environment. In relation to the effects upon social democratic parties, let me isolate three factors for analysis. First, I will address what has generally been termed the EU’s democratic deficit. This involves the perception that crucial decisions affecting ordinary citizens are being taken beyond the reach of accountability, and further, that national politicians generally acquiesce to this state of affairs. Next, I will focus on the effects upon national state economic management as impacted by the conditions spelled out in the SEA and Maastricht Treaty for Economic and Monetary Union (EMU). Finally, I will turn to the policy orientation itself of the EU in the context of the SEM and EMU regarding political agency and core constituencies. My argument is that, taken together, these constituent components of the relaunched European integration process have had profound implications for state-society relations of EU member states. As the role of the national state is altered in terms of functional responsibility, social democratic parties come under increasing pressure to legitimize their differences with what is essentially a neoliberal project, and in the process distinguish themselves from their party competitors as well as shore up support among their own members and followers. Multiple D emo cratic D eficits There is abundant literature concerning the lack of direct accountability in EU decisionmaking. To summarize briefly, the deficit at the European level reflects the relatively marginal role of the directly elected European Parliament in the policy and decisionmaking procedures in the EU system. Admittedly, the SEA, Maastricht, and Amsterdam treaties have gone some way in

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correcting this imbalance, mostly through the enhancement of the EP’s power by incorporating codecision in additional areas of EU policy competence. Still, the core of the argument is that the only supranational EU institution that can invoke a popular mandate (despite problems such as the lack of a common electoral procedure) is unable because of the interinstitutional balance of power to legitimize EU legislation in a thorough and substantial manner. Further, the Council of Ministers, which acts as the EU legislature (although now more effectively sharing this role with the EP), is composed of national ministers who decide on European-level legislation for which they were not, in a fundamental sense, ever elected to deal with from the perspective of a European electorate. To reiterate, the democratic deficit concerns a lack of accountability to a particular institution, the European Parliament. But this is only part of the deficit. As Moravscik and others have pointed out, national executives are the privileged interlocutors between domestic actors— both governmental and nongovernmental—and the EU decisionmaking process. The other level that concerns the democratic deficit regards national executive-legislative relations. Accountability is again the prime area of vexation. The nature of intergovernmental bargaining and national executive procedures in dealing with Council of Ministers deliberations has in many member states reduced the scope of national parliamentary scrutiny over executive actions, leaving many national parliaments reactive at best to positions taken by their executive. This is yet another dimension of the democratic deficit, a deficit understood as an institutional matter; but there is more to the problem than simply institutional remedies. The democratic deficit, as I have sketched it, is one involving relations between elected and, in the case of the European Commission, appointed bodies, at both the national and European level. There is nothing inherently partisan about this situation. However, if the process of EU decisionmaking has suspect bases of legitimacy from an institutional and procedural basis, there is an additional legitimacy issue, one that affects the programmatic identity of social democratic parties in particular. The additional legitimacy dilemma is, to put it bluntly, a problem in popular perceptions regarding the nature of the policies

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transferred to the EU, and the consequences thereof, which are seen as undermining national control over national destiny. In the first phase of European integration, and until the 1990s, except in a few countries such as Denmark and the UK, what has been referred to as the permissive consensus prevailed in regard to public attitudes toward the content and process of European integration (Lindberg and Scheingold 1970). Not only was the process an elite bargaining affair, but even among party members as well as the general public it was a foreign affair. Exceptions such as the Common Agricultural Policy certainly had a domestic constituency, but defense of its provisions often became a national cause célèbre. To the average person, the European Community rarely penetrated their everyday existence in a separate or explicit manner, especially as most of the key policy components of the EC had been erected by the end of the 1960s. As I have noted, during the 1970s each EC member state searched for its own national path to economic growth in the face of recession, and the process of integration itself slowed to a sclerotic pace. The EC was indeed out of most people’s minds. Beginning in the late 1980s, though, public opinion regarding the policy orientation of the EU began to emerge—that is, a reactive public opinion to new policy initiatives of the EU developed. The reason for a more volatile public sensitivity probably has less to do with information campaigns by the European Commission than it does with the implementation of certain EU directives. Bearing in mind that many national executives have practiced an informal policy of shifting blame for unpopular EU directives to the European Commission rather than to themselves, who, through the process of intergovernmental bargaining at various levels, are nevertheless deeply implicated (Smith 1997), the EU has increasingly become seen in the public’s eyes as the instigator of policies that in the 1990s had direct effects on the livelihoods of millions of citizens. The possibilities of negative public opinion fallout increase the more active the EU becomes in further areas of domestic policy. The inevitable consequence of Jacques Delors’s comment in the late 1980s that EC legislation may come to account for 80 percent of policies affecting the ordinary citizen within ten years is that the EC will then have to subject itself to the wrath of citizens in response to misguided policies and/or the problems associated with implementation in the

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short term. Rightly or wrongly, the EU has increasingly been considered responsible for singularly high-profile problems such as unemployment, as a result of both its competition policy and the efforts made by member states to meet the Maastricht monetary convergence criteria (Sinnott 1995). The democratic deficit is therefore a very complex issue, and institutional reform is only one area of concern, for the very legitimacy of EU politics is part of the overall phenomenon. N atio nal Eco no mic Management, the SEA , and EMU The golden age of social democracy coincided with a type of government intervention in the national economy that was crucial in supporting commitments to full employment, the redistribution of income, and even workplace democracy (Cafruny 1997). Many factors are given for the retreat of state Keynesian economic management beginning in the latter 1970s and continuing through the 1990s. These range from the effects of globalization, attempts through the European Monetary System to introduce currency stability among European countries vis-àvis the dollar, improving European economic competitiveness in relation to the United States and Japan, and the increasing ideological vigor of monetarism, or neoliberal views, on the role of the state and economy. However one weights the various contributing factors, by the 1990s, including even those European states such as Sweden and Austria that had seemingly weathered the winds of change, a new orthodoxy reigned, one in which state interventions in the economy, and in some countries in social welfare provision, were viewed as negative or constricting elements upon market forces. Social democratic parties, or at least their leaders, are implicated in the particular formula that the European Community member states adopted to respond to the challenges to their economies in the 1980s and 1990s. Although there are specific national reasons explaining why particular countries supported the neoliberal SEA program—from statist France with its large public sector to the relatively open economy of the Netherlands—an alternative social democratic plan was not forthcoming. Cafruny characterizes the SEA as “offer[ing] a politically acceptable path to further integration because it accorded with the

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desires of conservative governments and European big business to adopt market-based solutions to problems that were defined in terms of excessive state intervention” (1997, p. 119). What was the social democratic alternative? It seemed apparent that the policies of the 1960s and 1970s had lost their credibility; the French Socialist government economic policy change of 1981–1982 strengthened the convictions of neoliberal proponents and deflated the hopes of those who perceived the French Socialist experiment a last chance to pursue an alternative path to market-force domination; and finally, and more generally, in response to the neoclassical supply-side formulas of the political right, the “Left ha[d] no intellectually honest answer” to the conditions of the late 1970s and early to mid-1980s. “Unions cannot see it as their role to increase the incomes of capital owners at the expense of the workers, and Social Democrats cannot make it their program to dismantle the welfare state in order to lighten the tax burden on business. If they nevertheless did both things, they did so with a bad conscience and more under the cover of darkness than in the full daylight of their programmatic debates” (Scharpf 1991, p. 270, italics added). For social democrats, the proposed Single Market initiative was coupled with the discipline of the European Monetary System/Exchange Rate Mechanism (EMS/ERM), made even more difficult after German unification and the consequent rise in German interest rates. Occurring at the same time as a widespread recession in the early 1990s, then added to by the Maastricht Treaty’s monetary convergence criteria, the economic and financial climate of the late 1980s and early to mid-1990s was singularly inauspicious for lowering or even stemming rising unemployment. The Single Market, an exercise in negative integration, seemed to hold out the prospect of renewed economic growth, especially if one believed the Cecchini Report, upon which the European Commission “based its most extravagant claims about the likely economic benefits of a single market” (Dinan 1994, p. 151). Intellectually, social democratic party leaders, especially the more traditionally interventionist, responded to the neoliberal challenge in a generally defensive manner, claiming that there was no alternative to defending restrictive practices due to external constraints. In this manner they were able to avoid legitimizing neoclassical arguments for

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such policies (Notermans 1995); on the other hand, the lack of a proposed alternative highlighted not only the destitute nature of social democratic economic remedies, but also the apparent irrelevance of national state action. Globalization became both the bane and the shibboleth of social democrats in the 1990s. For many, their miseries were to be blamed on the global financial restructuring and mobility of huge concentrations of capital. It also became the justification for commitments, many times made reluctantly, to Europeanlevel counterweights to these dynamics—a sort of strength in numbers. Much as some social democrats had employed the rhetorical device of modernization (Gaffney 1989) to defend probusiness policies in the 1980s, now strengthening a European structure in a tumultuous global climate became the new orthodoxy. As I pointed out in an earlier chapter, some of the most reluctant social democratic parties finally came around to giving grudging support for SEM and EMU more on the basis of a lack of a credible alternative than a firm belief in the merits of the argument. It is true, though, that some social democrats did view the SEM (and eventually EMU) as in fact a necessary means to an end, but only in a manner such that social democratic goals were incorporated in the integration process, that is, positive as well as negative integration. Jacques Delors was the leading proponent of this view. According to Ross (1991): “Socialists see this Europe-wide strategy, rather than any particular combination of domestic policies, as the real remedy for persistent unemployment. Their major caveat, expressed by Jacques Delors himself, is that the Europe which comes out of 1992 must also preserve the famous ‘European model of society’ by rejecting hard-nosed neo-liberalism in favor of an active state working hand in hand with the private sector (at national and European levels) and by preserving social programs more or less as they are” (p. 139). In the end, social democrats, reluctantly or not, collaborated in the rise to hegemonic status of market-based solutions to both economic and social questions. At the same time, through support for this type of European integration, social democrats participated not only in transferring certain national tools of economic management out of their hands, but also in undermining the very notion of the efficacy of state action. The Delorian strategy would appear to have backfired.

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Po litical A gency, So cial Demo cracy, and Euro pean Integratio n If social democracy can be defined according to a common denominator across parties, it is the belief in reformist state action, a political will that is neither entirely dependent upon interventionist or coercive procedures nor entirely reliant upon outcomes in competitive market scenarios. Notermans puts it neatly: “On the one hand it rejects the socialist planned economy as both economically inefficient and undemocratic. On the other hand it also rejects the liberal demand for government abstinence and the acceptance of market outcomes as it holds that the outcomes of unfettered markets are normatively unacceptable” (1995, p. 9). Social democracy incorporates a necessary commitment toward the use of state mechanisms, usually in some type of alliance between organized labor and employers, to moderate market risks for their constituencies as well as to promote economic growth. Clearly, the situation varied from country to country, some where the neocorporatist arrangement complemented state action, others where the state, through nationalized sectors, took a more direct form of economic organization, such as in France. Additionally, and again depending on the specific country, the electoral market varied, inducing in some social democratic parties the need to add to their core constituency in order to secure election to government. Thus social democratic parties were concerned with both a core electoral constituency and supplemental sources of voters, usually drawn from the center or center-right of the political spectrum, and being salaried rather than hourly wage earners. Social democracy, in its various guises, has therefore always implied some form of conscious and rational application of political power and action in order to bring about desired social and economic change. Through their collaboration in the relaunched European integration process of the late 1980s and 1990s, social democrats not only further weakened their association with purposive state action in the cause of their core constituencies already undermined by the austerity policies of the late 1970s and 1980s, but signaled an end to the hope that this was the exception, rather than the rule, of social democratic governance. The core, or traditional, constituencies of social democratic parties are those for whom the precariousness of economic

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trends—associated quite often with EU dynamics—has impacted most. In many cases these are workers in public sector enterprises for whom the combination of deregulation and privatization has cost jobs, strictly moderated wage demands, and, through increased mergers and acquisitions, often across national boundaries, removed the decisionmakers further afield from trade union mobilization. The Renault plant closing in the Belgian town of Vilvoorde in 1997 presents a high-profile case in point (see “The Repercussions of Vilvoorde’s Closing” 1998). The justification for these measures taken by EU governments, social democrats as well as Christian Democrats and conservatives, has in the public mind become linked with the European integration process. When one adds to these trends the tight budgetary if not budget-cutting measures required by the monetary convergence criteria (and the subsequent Stability Pact), the entire government-sponsored social welfare apparatus requires rethinking, in the short term jeopardizing the linkages between those impacted constituencies and social democratic parties. In the end, the commitment of national governments to the EU has represented a promise that the material bases of life will improve, though in the short term there will be certain dislocation costs. The promise of the relaunched integration process appears, however, increasingly hollow to the traditional constituencies of social democratic parties, and for two reasons. First, the transfer of certain economic instruments to the EU has translated into short-term inability of national governments to pursue policies that in the past were manipulated precisely to strengthen support among voters. Here I mean the manipulation of interest rates as well as fiscal measures leading up to elections. The combination of no longer being able to massage the national economy for political purposes, together with the acknowledgment in a formal sense that this is no longer even in the preserve of national states, weakens one of the central sources of national democratic legitimacy, that is, to the extent that government performance is a critical measure in legitimation. The second reason that the integration process appears problematic to certain segments of popular opinion is connected with what presumably justified the transfer of policy competence from the national to the European level in the first place, and this is the

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absence after the 1992 launch of the Single Market and the creation of the euro, with all of the discipline required to achieve it, of any measurable enhancement of the well-being of the traditional constituencies. As Scharpf (1999a) argues, the attenuation of national states in their capacity for problem solving—or even popular mobilization through selected added benefits—has not been fully compensated by the development of effective and legitimate problem-solving capabilities at the European level. Although the picture is not completely dismal, as there remain areas of national governing capacity, as well as areas in which the EU does indeed positively contribute, nevertheless “there are policy areas that are of crucial importance for the legitimacy of democratic welfare states, in which national problem-solving capabilities are indeed severely constrained by economic integration, whereas European regulation, or even policy harmonization, seems to be systematically blocked by conflicts within the underlying constellation of national interests. It is problemsolving deficits in these policy areas that present the most serious challenge to the democratic legitimacy of the multi-level European polity” (p. 3). My argument is that as the political actors most associated with imbuing the state with a robust problem-solving capacity, the partial transfer of this capacity to the EU without tangible proof in the wisdom of this commitment over time undermines the legitimacy of social democratic parties along with national states. Conclusion The increased visibility of the EU due to the expansion of its policy competences coupled with high-profile initiatives, such as monetary union, and the inability of citizens to affect the decisionmaking process, undermines the legitimacy of EU member states. The neoliberal policy orientation of the EU since the late 1980s, rather than strengthening the national state in the context of globalization, appears to have led to its emasculation. The seeming powerlessness of the national state in certain sectors, I claim, has a spillover effect on those national actors most identified with state action, namely social democratic parties (Ladrech 1999). The content of European integration since the

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mid-1980s, then, much more narrow and focused than the more abstract process of globalization, has rendered the social democratic dilemma even more problematic. In supporting this integration process without at the same time shaping its policy orientation in directions more amenable to both their programmatic identity and tools of implementation, that is, state structures, social democrats in a sense positioned themselves in a political corner. Contrary to the quote by French party leader Hollande opening this book regarding the alleged dominance of social democratic ideas as witnessed in the election of social democratic parties in a majority of EU member states by the end of the 1990s, national-specific reasons are more likely to explain this phenomenon. One might speculate that a contributing factor has been the recognition by voters of nothing but continued austerity by conservative and Christian Democratic parties, with the center-left viewed as a lesser evil—in other words, a retrospective judgment rather than a prospective vote for social democrats. Even so, as Jacques Delors declared in late 1998, “from an historical point of view, all European social democrats are at a crossroads. If, in the next five years, they have not demonstrated, on the one hand, that Europe can be powerful and generous and, on the other hand, that this can be translated by a clear fall in unemployment, then the sanction will be terrible for them” (“ Grand Jury RTL” 1998, p. 15). A central weakness of Delors’s vision in supporting the SEM and EMU as the means of protecting a European model of society, or a modified, European-level social democracy, was that it implied a high level of social democratic political coordination—transnationally as well as in European Union institutions—and a common policy development suited to a multilevel governance regime, and this was woefully absent in the late 1980s and most of the 1990s. Social democracy at the beginning of the twenty-first century has, then, a double challenge. The first is a rethinking of its core policy prescriptions, for the Europe of the golden age has changed considerably, and so too the efficacy of old practices. As Kitschelt (1999) reminds us: Now social democrats find themselves in an environment of lower per capita growth, an aging population calling upon

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massive social-insurance-covered health and pension entitlements, open capital markets, new foreign industrial competitors, and new political concerns with the domestic quality of life, multiculturalism, and participatory democratic procedures that constrain the favorite social democratic problem solving techniques—economic growth and centralized administrative governance of a culturally homogeneous population. (p. 318)

The second challenge for social democrats is to reconstitute a conception of collective political agency, aiming to use the EU as a complementary site for decisions and policy setting. This, however, does not mean that social democrats can “expect to carry their politics into a new era by means of a simple change of scale.” To do so not only “ignores the impediment to change each nation’s institutional heritage represents” (Butler 1995, p. 125), it also ignores the very logic of EU politics. How social democratic parties adapt to and influence the logic of EU politics is presented in the next chapter.

PART 2

Adaptation and Innovation by Social Democratic Parties

4

Europeanizing Social Democratic Parties

In Part 2 I demonstrate how social democratic parties have sought to influence the policy orientation of the EU. I argue that over the course of the 1990s, social democratic party leaderships developed the role of their transnational party federation—the Party of European Socialists—in such a way as to maximize their input into the EU policymaking arena. In doing so, one can discern a learning curve represented in the organizational adaptability of the PES to the changing contours of the EU policy environment, in particular the launch of monetary union. I explain this phenonenon, that is, an innovative response or adaptation by national party leaderships to Europeanlevel policy inputs and environmental changes, through a combination of institutional and actor-centered analyses that together explain how the European level presents new opportunity structures and constraints that are responded to “by the problem- and policy-specific constellations of actor preferences and options” (Scharpf 1999b). In other words, the intensification of the use and consequent refocusing of the PES by social democratic party leaderships in the latter half of the 1990s was a product of the response of social democratic parties both to the challenge of European integration since its relaunch in the late 1980s, and to the specific crisis of social democracy that the neoliberal policy orientation of the European Union further aggravated. In attempting to create an appropriate response to the challenge of European integration, social democratic parties have redefined the European issue in such a way as to contribute to their own reformulation of the social democratic project. 59

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In this chapter I turn to an analysis of the programmatic evolution of selected social democratic parties regarding the EU. The central point in this discussion is to explain how the European level came to be understood as an opportunity to resolve, or at least be seen to be addressing, the late-twentiethcentury dilemma of social democracy. More crucial for my overall thesis, the development and nature of activities of the PES, especially in the latter 1990s, owes a critical amount of initiative to the fact that social democratic parties had come to view the European level as a complementary field of action for the attainment of domestic goals. In this perspective, the PES became a useful lever for party politics as well as a privileged area within the overall “interaction context” (Lewis 1995) of social democratic European policy development. The Europeanization of Party Politics The activities of the Party of European Socialists (PES) over the latter half of the 1990s represent a form of organized response by national social democratic parties to the challenges described in Part 1. These challenges were, first, to their relevance as parties seeking to use national government for party goals, and second, as social democrats in particular, for whom the policy orientation of the EU undermines key constituencies and at the same time exacerbates the lack of a partisan alternative to right-of-center parties. The nature of PES activity has been less to figure prominently in European Parliament elections, that is, to focus on European-level electoral activities, and more to engage a process by which social democratic policy development aimed at influencing the EU’s policy agenda in key areas may be facilitated. This innovative response by national actors to inputs from a newly relevant arena or environment follows from the prior transformative effect by which actor perspectives adjusted in terms of political calculations, that is, an internalization of EU dynamics and strategic assessments that has become “part of the organizational logic of national politics and policymaking,” that is, Europeanization (Ladrech 1994). Let me be clear about the nature of this social democratic party response and adaptation. Although I accept the assumption that actors pursue instrumentally defined interests and try

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to maximize utilities, and as such an institutionalist perspective is necessary to analyze the adaptation of nationally based actors to EU rules, regulations, and policymaking, this is only part of the story, and that in addition, “the characteristics of the actors (their capabilities and cognitive and normative orientations) [also] . . . need to be explicitly conceptualised in any framework that is able to account simultaneously for the influence of institutions and for the fact that situations differ and that actors are purposeful and resourceful agents, rather than rule-following automata” (Scharpf 1999b, p. 8). Europeanization, as I employ it, serves to bridge the gap between a rationalist pursuit of interests and the specific characteristics of the actors, in this case social democratic party politicians. I suggest that in the exchanges documented in this book among European social democrats—together with the more general desire to overcome the uncertainty generated by the social democratic dilemma—many participants have come to use European-level forums in a problem-solving capacity. This perspective is close to that of social constructivist arguments regarding the European integration process, especially in the discussion of learning and socialization at the European level (Checkel 1999). Indeed, the instrumental use of the PES by party leaders, coupled with extended exposure to European colleagues’ needs, analyses, and propositions in PES working groups, reflects a research agenda for social constructivists exploring the process of Europeanization. Checkel even suggests that “constructivist deductions on the role of common backgrounds, crisis, density of interaction, etc., could readily be exploited . . . to explore more systematically the conditions under which European committees, through learning and argumentation, socialize their participants” (p. 557). The PES in fact represents one of these problem-solving meeting places. Clearly, the development of the EU, especially since its relaunch in the late 1980s, impinges on the role of political parties, and it is fair to say that they are concerned about the implications for their traditional function of organizing political space within their national political systems, that is, interest aggregation and articulation, as well as policymaking. Thus an interest in controlling or at least influencing the European level is assumed at the outset. Hix and Lord (1997) claim that the EU represents “a new structure of threats and opportunities. They

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[parties] have to adapt to the EU and organise themselves for participation in its institutions and rule-making, if they are to maintain their influence over all the political processes that shape the distribution of values in their own national socieites” (p. 5). However, not all parties are affected by EU inputs alike in terms of their programmatic identity, nor complexion of constituencies. Social democratic parties, already in quest of a programmatic response to the changes in their domestic environments resulting from the factors outlined by Kitschelt as noted in Chapter 3, are more inclined to view the EU level and thus structure their response to it along lines that contribute to a resolution of their internal identity crises. This explains the specific nature of their response to the EU challenge, and also why the PES appears to be more intensively embraced as a site (and actor) by party leaderships than its nominal competitor, the Christian Democratic European People’s Party. Institutional analysis, combined with a focus on actor interests and motivations, incorporating the process of Europeanization, and interpreted within the framework of established political cleavages expressed by party families (Marks and Wilson 1999; Marks, Ray, and Wilson 1999), is therefore required in order to understand the social democratic party response to the challenge of European integration. This also explains the variable nature of party and party family responses to European integration. Hix and Lord (1997) chart most of the terrain upon which national parties have tried to “organise themselves for participation” in EU institutions and rule making. Their analysis by and large posits party adaptation as goal-seeking behavior, and by and large they do not distinguish nor develop any further the specific nature of the initiatives involved in organizing for participation in the EU between party families. Consequently, the focus and weight of their analysis explores the institutional realm of party activity at the European level. Hix and Lord present an invaluable guide to the institutions and processes through which party actors have engaged the EU political system. They focus on the “shape” of the EU party system—its divisions and alliances—the strategic environment and the institutional environment (the formal organizational and decisionmaking structure of the political system). I will return to this institutionalist perspective in Chapters 5 and 6. What follows is a presentation of social democratic parties’ reformulation of the

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European level as a contributing factor to their own programmatic repositioning. This is important in order to understand why and how social democratic parties “turned toward Europe” in a much deeper manner as compared to various party positions on European integration beginning in the 1950s and 1960s. In this context, the ideological, or party family, dimension, plays a key role and is thus a significant factor for understanding the European-level development of social democracy. Europeanizing Social Democracy Europeanization, or the internalization of EU dynamics and strategic assessments in the organizational logic of national politics and policymaking, describes the penetration and absorption of such inputs into actor strategies. It does not imply or predict, however, what those altered strategies will be; in other words, Europeanization does not induce a homogenized policy orientation or direction, despite a common set of institutions at the European level. However, to explain the degree to which Europeanization contributes to modifying party strategies to secure domestic policy goals, it must be combined with an appreciation of political cleavages expressed through party families, for “political cleavages give rise to ideological commitments or ‘prisms’ through which political parties respond to new issues, including that of European integration” (Marks, Ray, and Wilson 1999, p. 23). Policy goals and issues reflect the basic ideological foundations in party families; the European Union for social democrats could therefore be embraced in a substantial, systematic, and coordinated manner only if it could be refitted into the ideological underpinnings of social democracy. Europeanization involves an internalization of EU dynamics and processes into national actors’ routine domestic political and policy calculations, and thus party leaderships are confronted with a variety of factors that demand negotiation with party ideology. The absence or low degree of the Europeanization factor in social democratic party views of the EU, that is, the pre-1990s state of affairs, was represented, in most cases, by a foreign policy orientation usually delegated to government ministers when the party was in office, background positions articulated by party experts when in opposition. This reflected the fact that

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until at least the late 1980s, the question of European integration was not a salient issue for most political parties, that is, it did not resonate in competitive party politics (Featherstone 1988). It also reflected the fact that Europeanization is itself a process that has effectively become a factor in altering party strategies only in the past decade. In the case of social democratic parties, Europeanization engaged the social democratic crisis described in Chapter 3, which in turn highlighted issues of party ideology and identity. As parties with a governmental vocation, social democratic parties are exposed to a wide assortment of EU inputs, thus engendering an intensive penetration of EU factors and dynamics. Responding to the EU, then, was not a decision that could be avoided nor ignored, for in the case of social democratic parties, the EU is both a generator of additional inputs into the cognitive political maps of party leaders and an issue itself problematizing party identity. The nature and substance of responses by social democratic parties over the course of the 1990s, which witnessed a reformulation of their shallow proEuropean positions into a more robust and explicit stance, and, indeed, the use of the PES to express common policy positions, reflect the fact that the EU was reconceptualized as an asset in the resolution of programmatic dilemmas. For these parties to have arrived at this point in their assessment of the EU, at least four related programmatic and broadly political changes had occurred across social democratic parties that made them receptive to viewing the EU in more instrumental and pragmatic terms. Together, these changes account for the social democratic convergence on the European issue. First, a more modest appraisal of the role of the national state, both in its efficacy and scope, had occurred by the beginning of the 1990s. Most debates among party activists and scholars over the past decade have engaged the question of whether the role of the national state was diminishing—in both efficacy and necessity—as a consequence of globalization, and in particular in the sense of being able to meet social democratic goals. Party leaderships, however, whether in government or in opposition presenting a case for their stewardship, must confront issues of governance from mundane details to history-making decisions. The record demonstrates that as the left reentered government throughout the 1990s, rhetoric and indeed policy

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orientation altered regarding the role of the state, and although the left is still championed as an effective and necessary instrument for the achievement of collective well-being, a distinct change as compared with the 1970s has occurred. Certainly, this varies from country to country, and in some cases it is partially a product of inheriting a substantially revamped socioeconomic landscape. In the case of the British Labour Party’s return to power in 1997 after nineteen years of Conservative Party rule and Thatcherite policies, the new generation of leadership explicitly set about redefining the role of the state, a process that had begun in the mid- to late 1980s. Primary in the rethinking of the state’s role was a “rejection of the principles of national economic independence underpinning the ‘Alternative Economic Strategy’ advanced by the Left in the 1970s and early 1980s and an acceptance of the realities of increasing interdependence in the international economy.” This came about as “a gradual shift in cognitive beliefs about how to achieve desired goals” (Featherstone 1999, p. 6). In the case of France, a strong and centralized state had become part of the national identity, especially pronounced among parties of the left and Gaullists on the right. Neither a long spell out of power, as in the case of the British Labour Party, nor a “Bad Godesberg conversion,” however, occurred in explicitly articulating a changed role for the state on the part of the French Parti Socialiste (PS). Nevertheless, even if in a piecemeal fashion, the PS has incorporated the pragmatic orientation toward governance adopted by Prime Minister Lionel Jospin, whereby external constraints on state action are acknowledged, though not to the extent of capitulating to a model of state activity essentially neoliberal. Volontarisme réaliste has become the intellectual framework upon which the values of the French left are to be promoted by the state. According to Jospin, “I remain firm as to the ends, but I know how to be supple as to the means” (Jospin 1998, p. 12). Even in countries often promoted as successful examples of state management, change has occurred. In the case of the Dutch Labour Party (PvdA), partly due to new coalition partners, a new redefinition of the role of the state vis-à-vis the market and social forces has occurred. The PvdA’s “original ideological position of statist social and economic planning, as well as the party’s emphasis on radical income equality, have disappeared,” to be replaced by a “formula [that] mixes traditional

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social democratic ideas such as justice and equality with neo-liberal elements such as the market and individualization . . . [and a loss of] faith in the state as an omnipotent political agent” (van Kersbergen 1999, pp. 164–165). In Austria, as well, programmatic change has been encouraged by the leadership, such that former chancellor Franz Vranitzky’s aim upon becoming party chair in 1988 “was to convince social democrats that it was now time to take leave of old and cherished traditions and find courage and openness to propose undogmatic solutions for the issues of the day” (Fröschl and Duffek 1998, p. 185). In the context of the new party program adopted in the autumn of 1998 (replacing its 1978 program), the new openness marks “a significant departure from the SPÖe’s [Social Democrats’] classic ideological profile” (Luther 1999, p. 28). In southern European parties, the role of the state was rethought in the context of their own societal modernization, and in this respect issues of economic interdependence led to a desire to join the EU. In the specific case of Italy, where one can witness the explicit evolution of the former communist party into a social democratic party—from the Partito Communista Italiano (PCI) to the present Democratici di Sinistra (DS)—the role of the state and its capability as an instrument in the pursuit of party goals were linked to a complementary European dimension, thus explaining the party’s attachment to European integration. These views on the appropriate role for the state have meant that overturning or reversing the neoliberal inheritance in a fundamental fashion has not occurred. For example, there has not been a renationalization of privatized public sector industries in either the UK or France. Articulating explicit limits to state action, though not the abandonment of the state’s role in social transformation, has become the order of the day. How each party arrives at an optimum balance between constraints and initiative varies according to tradition, relative power in the party system, nature of state power, and so on. But the legacy of the 1980s and the neoliberal wave in economic policy have induced a certain modesty into social democratic thought regarding the potential for national state action. Second, and directly related to the reappraisal of the role of the state, there has been a reevaluation of means to ends, for example, in the policy initiatives characterized as supply-side

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social democracy. What does a more modest role for the national state actually imply in terms of policy direction? Bearing in mind that social democracy was never a rigidly homogeneous practice to begin with, the social democratic model at the beginning of the twenty-first century continued to vary from country to country. However, one can point to certain common characteristics, the first of which is the promotion of a new role for the state. As even social democratic governments preside over privatization schemes, that is, negative reconfiguration of state power, most are quick to present initiatives in which the state has reformulated its role in other areas, that is, positive reconfiguration. Most notable across social democratic parties are the various programs aimed at improving the skills of citizens, from information technology to lifelong learning, or what has come to be termed the “supply-side politics of the left.” Again, these new departures by social democratic governments vary according to the national situation, but in most an effort is made to link this policy orientation to a new notion of state-society relations. In many social democratic parties, recognition of the constraints emanating from increased economic interdependence has been the motivation in the redefinition of the possible means by which state action can continue to be maximized. In the case of the Swedish Social Democrats (SAP), the “Swedish model” has been reconfigured rather than replaced. “Universalism” in social security systems and redistribution of income have not so much been abandoned as redefined. Unemployment and sickness allowances have been reduced to 80 percent of income, and part contributions by income earners to the health insurance system and pensions are now accepted. The justification for these changes was one of prioritization. The argument is that “most households can withstand a temporary cut in household income, whereas cuts in education or health care may have long-lasting negative effects on individuals and society as a whole.” Redistribution of income now “seems to be shifting towards ‘redistribution of possibilities’” (Lindgren 1998, p. 89), and in this context education and new technology skills are emphasized. For Danish Social Democrats, the new party manifesto adopted in 1992 reflected a new thinking on the part of statesociety relations. Concepts such as solidarity, community, and brotherhood “were still mentioned in the programme, not as an

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end in itself but as prerequisites for individual freedom, the liberty to choose, pluralism and happiness. Public regulation was replaced by public service, public ownership of the means of production by co-operation between the public sector and private enterprise, welfare state by welfare society and so forth” (Bille 1999, p. 53). For Flemish socialists in the 1990s, ethical socialism became the new buzzword, consummated at an important party programmatic congress in 1993. By “linking post-material concerns with concrete issues such as social security (pensions) and work, the party was able to ‘refocus’ programmatically” (Vermeersch 1998, p. 200). The German SPD–Green government coalition, in particular Chancellor Schröder’s Neue Mitte, also attempts to reorient state action along lines stressing liberalization and modernization, while at the same time invoking social justice. The Alliance for Jobs is one example of Schröder’s notion of the state as partner with other social and economic forces that may in the medium to long term indeed restructure state relations with business and labor. Unlike neocorporatist concertation of the late 1960s and early 1970s, “the initial objective of the Alliance for Jobs is not to launch huge Keynesian-style programs designed to eliminate unemployment tout d’une coup, but to develop a reliable process for reaching a common understanding among German business leaders, trade unionists, and government officials regarding the causes of unemployment as a prelude to developing mutually acceptable long-term solutions” (Silvia 1999, p. 85). Southern European parties were not exempt from this reformulation of the role of the state. In the Panhellenic Socialist Movement of Greece (PASOK), a party for which a clientelistic state network was intimately bound up with its popular support (Moschonas 1999), “modernization” implied a new relationship in state-society relations. PASOK’s Congressional Theses at its Fourth Congress, in June 1996, reflect this change: The modern conception of the welfare state cannot be identified with the post-war Keynesian model. It cannot be an opportunistic charity state delivering according to the economic conjuncture. On the contrary, its institutions should be incorporated in the whole process of development and restructuring of productive activities. Its institutions should be able to guarantee new jobs . . . new insurance policy. (quoted in Fouskas 1997, p. 83)

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Whether dubbed the “Third Way” by the British Labour Party, or Innovation und Gerechtigkeit (innovation and justice) by the German SPD, or sterk en sociaal (strong and caring) by the Dutch PvdA, a “kind of new openmindedness has emerged; a fresh intellectual and conceptual curiousity among thinkers and scholars within and around the parties and among policy makers and politicians” (Cuperus and Kandel 1998, p. 14). There are, of course, obvious electoral considerations pushing these social democratic parties to give some coherence—both intellectually and substantively—to policies that they hope will attract centrist voters. Yet the attention, sometimes with serious internal party organizational consequences, that characterizes the effort to rethink the means by which the state can promote social democratic goals suggests that convergence among social democratic parties is a dynamic process. It is, in a sense, a recognition that “the instruments of reformism are changing: the State, far from receding inexorably . . . is experiencing profound transformations, receding certainly in the economic domain, but redeploying its activities in other sectors” (Lazar 1999, p. 133). Third, a recognition of the domestic policy impact of European integration has taken hold. My operative definition of Europeanization is one that attempts to understand how the behavior of institutions and actors alters as a consequence of their increased embeddedness in the European Union. Europeanization is also understood by others simply to draw attention to the fact that an increasing number of national policy competences are now shared with, or are practically speaking within the purview of, Brussels. In this latter sense, the EU, through its policy jurisdiction in certain areas—for instance, regarding state aid or health and safety—in addition to the strictly economic measures mandated by EMU, has become a very political presence in member states. This politicization of domestic debate introduces new and potentially volatile variables into national executives’ development of EU-related policymaking, a situation for which political elites had been generally unprepared. The days in which the EU was a foreign policy object to most party officials and electorates are over, as it is now clear that from keeping manufacturing plants open to regulating genetically modified organisms (GMOs), the EU is now intertwined with domestic political issues, and no single memberstate government can contain the EU from spilling over into

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issues that affect national politics. Youngs (1999) goes so far as to suggest that all governments now espouse the need to take Europe closer to the people and to strengthen domestic support for, and understanding of, EU policies—this was, for example, stated as the priority objective of the 1998 UK Presidency. This is a direct reaction to the domestic resistance to convergence reforms witnessed over recent years. It demonstrates the ongoing, dialectical interaction between the domestic and European levels of analysis. The lack of domestic engagement in the European debate over the late 1980s influences the nature of the Maastricht Treaty. This, in turn, produced a change in the nature of domestic debate. These changes then rebounded once again to influence the next stage of de velopments at the European level. Rather than a smooth, unilinear process of debate filtering through domestic institutional structures, economic integration has proceeded erratically, with elites driving forward, overshooting, tacking back to domestic opinion, before once again pushing on to forge responses to a new set of circumstances. (pp. 312–313)

Recognition of the presence of the EU in domestic policy settings also has the effect of engendering a sense of limits to national government autonomy (Kassim and Menon 1996), and in turn Europeanization as understood as an internalization of EU inputs modifies party strategies in terms of introducing new constraints but also new avenues to promote policy influence. It is this recognition of the EU as an inescapable component of the political landscape that necessitates a shift in party programs, a reformulation of the EU away from foreign policy and instead into the matrix of domestic policy concerns. This shift has a multiplier effect to the extent that different policies are linked together in networks of domestic policy communities and groups and, thus integrating the EU dimension into party strategies, especially those parties with a governmental vocation, induces a much more general and widespread learning process by party leaderships than a one-dimensional perspective on Europeanization might imply. The party family ideological prism contributes to an understanding of the similar cross-national social democratic party repositioning of the EU reflected in party strategies and programs. Pressures on the state (resulting in a more “streamlined”

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state) and rethinking economic policy (an increase in marketization) for social democratic parties do not necessarily lead to an abandonment of the focus on the state as an instrument for achieving social change. Whether explicitly or implicitly, the state is woven into the basic tenets of social democracy—parliamentary democracy, guaranteed social welfare, controlling the national economy, and so on (Wilde 1994)—and consequently it is not surprising that “many socialists are now attracted by the idea of an interventionist European state. They reassert the politics of unitary agency but at a larger scale” (Butler 1995, p. 125). It is more accurate to say that most social democratic parties have come to view the EU as a potential force in complementing the remaining capabilities of the national state. The evolution of the place the EU occupies in party strategies can be traced in party programmatic developments and leadership positions, and what is clear is that the turn toward Europe is a pragmatic reaction to institutional as well as substantive change and constraints. As each EU member state varies in terms of the political, economic, and social factors structuring the electoral and strategic resources and limits for its respective social democratic party, so too is the manner in which the EU is approached and reimagined as a potential complement to national policies and strategies. This reflects two essential facts. First, national variation in terms of the exact nature of state-society relations results in a different emphasis in each country regarding reform. Second, and following from the first point, one must expect a variation of perspectives on just how the EU is to complement new programmatic directions. Thus French and Dutch socialists will view the EU in a very different and even opposite manner over the issue of public services (i.e., state-owned public utilities) and state aid due to their contrasting perspectives on private versus public delivery of services and the state’s role as a guarantor of social cohesion. Despite these variations, it is apparent that ideology does matter with respect to cross-national similarities among a party family (Jachtenfuchs, Diez, and Jung 1998). So the EU has been reconsidered as a means to complement national partisan efforts, and this varies due to national circumstances. Thus social democratic parties in countries with a statist tradition view the EU as a complement to the continuance of such policy and governance traditions. Such parties will be in the forefront of demands for European-level regulation,

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especially where this has become attenuated at the national level. In the case of the French Parti Socialiste, it has consistently called for the following changes: • European-level measures resembling an activist and interventionist state, for example, a high-tech industrial policy • European-level regulations regarding public services—“it is unacceptable that deregulations insisted on by neoliberals at the national level not be accompanied by the establishment of new rules at the European level” (“Changeons L’Europe” 1994, p. 11) • European-level social measures such as a minimum salary, minimum standards regarding labor rights, and so on • Fiscal harmonization relating to the “definition of a minimum rate of taxation on revenues from savings applicable to all investors” (Socialist Party 1999) • A tax on polluting forms of energy, and so on With the establishment of the euro, the PS was among certain parties calling for an explicit “economic government.” For the German SPD, before its election in 1998, the EU was seen as an instrument, not as an end in itself. According to its spokesperson on European affairs, in a presentation to the British Labour Party in 1995, the reform of the European Union is one of the most important challenges of the political Left . . . with regard to work, social security, a sound environment and peaceful development. Secondly, the European Union is our only chance to influence trade and economic developments in a larger geographical and political area, and hence, to be able to shape political developments where national governments have long since lost any possibilities of control. (Wieczorek-Zeul 1995)

Regarding the 1996 EU Intergovernmental Conference (IGC) and social democratic objectives, especially in the area of employment, Austrian chancellor Vranitzky (SPÖe) presented social democratic strategy as “not a question of transferring to Brussels the tasks of national governments, but of using the

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‘European dimension’ in the matter” (“IGC Socialists” 1996, p. 5). In some cases, such as the Italian DS, the European Union is explicitly acknowledged as a necessary complement in remolding Italian politics of the left more generally, and specifically as a means by which to attain certain reforms in welfare policy, and so on (D’Alema 1998). For parties in less-developed EU member states, the EU is viewed not only as a source of funding (through cohesion funds), but as an object to be enhanced so as to promote further national progress. For the Portuguese PS, their European policy is intimately tied into domestic policymaking. According to party leader Guterres, We have said here that Europe will be social or it will not be. However, it is necessary to recognize that in the current state of matters, Europe is not yet sufficiently social. . . . The word “subsidiarity” fills me with dread, because this can signify, for a country such as mine, that we will have the responsibility of treating our problems which are, in the end, incapable of being resolved by ourselves. I hope that the question of the welfare State can be envisaged at the European level, that a Community responsibility can exercise itself in the matter of social policy. (Guterres 1993, pp. 24–25)

For parties from small states, whether poor or wealthy, the EU institutional structure allows a national influence usually beyond their grasp in international affairs, and this influence, mediated by a party, brings resources to domestic needs. In other words, “the Europeanization of small political parties may bring benefits analogous to those derived by small countries in the European Union: the opportunity to construct transnational alliances; the ability to exploit European norms to apply leverage in the domestic policy arena; and a chance to tap a wider range of political resources than would ever be available in the national setting” (Moxon-Browne 1999, p. 9). Even parties with a history of explicit caution regarding increased European integration—for example, the British Labour Party and Danish Social Democrats—had by the early 1990s developed policies advocating a strengthening of the EU in a number of respects (Haahr 1993). It has been argued that the Europeanization of the Labour Party was facilitated by “the party’s acknowledgement of growing economic interdependence and

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the futility of an economic strategy based on the concept of insulating the domestic economy from the constraints imposed by the international economic context within which Britain operates” (Daniels 1998, p. 83). According to former Labour Party leader John Smith, In a world more and more interdependent, in a Europe more and more united, it is essential to reinforce economic co-operation. In a world where financial markets and industrial systems are more and more integrated, no modern industrial country can permit itself to neglect others in order to survive alone. But, interdependence cuts both ways. If success profits everyone, errors must also be endured in common. . . . Above all, tight economic co-operation, and progress towards monetary and economic union, must be subordinated to the realisation of a true economic convergence and not a purely nominal monetary convergence. However, the condition for a true convergence is to define strategies at the national and European levels, in order to favour growth, employment and the reinforcement of the productive potential of our economies. (Smith 1993, p. 8)

By 1999 Labour Party leader Blair could explicitly link reform policies in the UK to development of the EU. In the joint document drafted with German SPD leader and chancellor Schröder, “Europe: The Third Way/Die Neue Mitte,” the two party leaders write: The challenge is the definition and implementation of a new social democratic politics in Europe. We do not advocate a single European model, still less the transformation of the European Union into a superstate. We are pro-Europe and pro-reform in Europe. People will support further steps towards integration where there is real value-added and they can be clearly justified—such as action to combat crime and destruction of the environment as well as the promotion of common goals in social and employment policy. (1999, p. 9)

Although this report went on to stress supply-side measures to a degree that upset social democrats in other countries, recognition of national circumstances mediated the seeming strategic dissonance with parties such as the French PS. According to Pierre Moscovici, minister for European affairs in the Jospin government,

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These nuances—and, let us speak frankly, these divergences, on certain points—with our neighbours can be perfectly explained by the objective differences of situation and by national specificities. Confined for too long a time to the opposition, having sometimes ceded, during these years, to a “gauchiste” or pacifist vision which condemned them to electoral failure, the Labour Party and the SPD have been obliged, at the same time, to review their doctrines and take into account the heritage bequeathed by conservative governments. Hence, eighteen years of ultraliberal Thatcherism have profoundly altered the face of British society; in such a context, reform priorities can only be the same in countries which have been able, like France, to avoid the dismantlement of tools for collective development and solidarity. . . . So, I want to say to our friends: let us continue our reflection together, but let us remain well on the path of the left! (Moscovici 1999)

In a variety of national-specific cases, then, the EU has been embraced as an additional tool with which to achieve party goals, and in some cases where the national means to achieve these goals have undergone a rethinking, as in the British Labour Party, the EU is considered essential. In those parties where the role of an interventionist state has not been abandoned, but rather modified—for instance, the French PS—the potential advantage of the EU is viewed in a manner that fits with party ideology (Cole 1999). In all cases, though, the EU has been transformed in social democratic ideology in the context of each party’s own reformist dilemmas, and the single most explicit example of how the European level has been embraced by social democratic parties is in regard to support for EMU. One can detect in all parties a similar justification for support, and that is the idea that it is only a first step in providing European-level mastery over currency fluctuations and as a counterweight to the U.S. dollar. Support for EMU is commonly viewed as a means by which to promote European-level economic coordination. On this point parties may again hold different perspectives—with the French PS arguing a maximalist position in which the European Central Bank is “balanced” by a political-economic council. Nevertheless, the euro has been explicitly defined as a means to an end by social democrats, and they have self-consciously promoted this justification, especially when threatened internally and externally by left-wing critiques (Notermans 1998). Once the EU is understood and accepted as a complementary

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field of action, it combines with social democratic ideological notions of collective agency, and thus is made not only more palatable in party debates, but becomes practically indispensable as an instrument for social change. Still, this does not mean that the EU acts only as a support for the state, for this “tells only half the story, and offers statists false hope. The sites of decision of the EU transform rather than merely rescuing the nation-state, and make necessary new intellectual frameworks (such as that of ‘subsidiarity’) to explain them” (Butler 1995, p. 148). Fourth, for particular parties, the EU has become an unavoidable issue itself complicating party management, and therefore accentuating the need for resolution. Not much needs to be stated on this point, as Euro-skepticism in certain member states makes abundantly clear. But for individual parties, the EU as a divisive issue does cause strains within intraparty coalitions, thus necessitating party managers to deal with the issue in a manner that does not hinder the flexibility of party leaders, especially in government. Thus for some parties, for example the Swedish SAP, the EU is a matter of intraparty politics, and potentially a threat to intraorganizational equilibrium. For others, such as the Danish Social Democrats, the opposition is voter, rather than party member, based. Most parties, even those nominally pro-European during most of the postwar years, have had to confront, beginning in the late 1980s, the consequences of a more intrusive EU, and this has stimulated intraparty debate, if not dissension. This has put a premium on party leaders’ skills to confront and resolve the European issue, at the very least in order to protect and stabilize if need be their own positions within the party. The EU as an issue of party management, or intraorganizational dynamics, has of course electoral consequences. They are expressed as both internal organizational and external party system/electoral market motivations and, as such, are additional pressures bearing on party leaders to defuse the EU as a volatile issue. Party leaders have chosen different tactics with which to handle the matter, from conflict avoidance in the Swedish case, in which internal dissent was allowed while the party leadership initially agreed to refrain from making recommendations in regard to the membership referendum in 1994 (Aylott 1997), to confrontation resulting in party breakaways, as in the case of the Greek PASOK (Verney 1996) and the French PS (Guyomarch 1995). The European issue is not, except perhaps for certain

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parties at selected times, the central policy preoccupying party leaderships. However, as Europeanization implies, the EU as a potentially divisive issue infiltrates other policy domains and renders party leaders many times incapable of containing it on one level. The support for EMU, grudging or not, meant that governments were obliged to meet the economic convergence criteria. Certainly, in some cases, these critiera provided cover (an externally induced justification) for a government to pursue structural change that was desired in any case but was considered too politically volatile (Smith 1997), but this still did not preclude reactions against the government by allies such as trade unions and dissenters within the party. Whether one speaks of reducing spending on pensions in Italy, reorganizing agricultural support in Greece, or providing state aid to the national airline in France, the impetus for government action can be easily linked to commitments to EMU as well as other EU directives. The Stability Pact promoted by the German Christian Democratic Union (CDU) finance minister Theo Waigel in 1997, designed to constrain budgetary overspending beyond the introduction of the euro, also has effects that ripple through many domestic policy domains. Therefore, although it may be correct to say that the EU in and of itself is not a divisive issue in many EU member states, the consequences in terms of the political ramifications of its policy orientation is ever present, and susceptible to opposition demagogy. The EU as an issue in party management highlights the pivotal role of party leadership. The views of party elites in many cases determine the official line adopted by the party. This is due primarily to the fact that information on the inner workings of the EU and the place of the respective government and country within it is little known to party activists and voters. Cues from party leaders are crucial in drafting election manifestos and party programs and influence the party rank and file (B. Wessels 1995). Examples of strong leadership and influence on European issues are plentiful. Mitterrand and the French PS, successive party chairs Neil Kinnock, John Smith, and Tony Blair in the British Labour Party, and Felipe González in the Spanish Socialist Party, are some of the more prominent examples of the role of party leadership. Because party cues are important for supporters of a party, and internal party unity does increase the effect of party cues, party leadership is crucial in

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respect to European issues. However, “the distinctiveness of party positions increases the strength of party cues . . . [and] . . . elite consensus can effectively impede partisan influence over individual opinions” (Ray 1999, p. 13). This fact puts a premium on party leaderships to articulate a distinctive position with regard to European integration, and, in the context of party competition in the national political context, linking the EU to partisan goals would seemingly present the requisite opportunity. The motivation to engage the EU issue constructively is consequently a product of both internal party management and (increasingly) party system competition. In varying degrees, all social democratic parties have experienced these four developments, and in applying cleavage theory with its focus upon party family ideologies, the convergence of response is not so surprising. As parties for whom the state in its national setting had been a crucial instrument in the very definition of social democracy (indeed theorized as such), the critique of globalization and its effect upon the state beginning in the late 1980s stimulated debate as to what extent the European Union could compensate for those capabilities lost at the national level. The fact that this debate occurred at all attests to the continued underpinnings and assumptions in social democracy, that is, a role for public power expressed through state institutions. The economic crisis of the late 1970s and 1980s, though, also engendered a wide-ranging critique of economic policy. Consequently, notions of both state capabilities as well as the proper mix of state intervention and market forces became intertwined. By the 1990s, then, as it became clear that many of the national bases for social democracy had been eroded by economic, political, and social changes, “traditional social democratic policies ought no longer be pursued, because they cannot be successfully implemented in the socioeconomic and cultural environment of advanced capitalism” (Kitschelt 1994, p. 7, emphasis added). In this context, social democratic goals were adjusted to the new means at hand, at both the national level as well as the (potentially) European level. The penetration of EU dynamics into debates in the 1990s—a reflection of increased Europeanization—added a pragmatic dimension to programmatic change, in both governing parties and those in opposition. In the end, national circumstances have dictated the range of positions regarding the complementarity of the EU to national goals, but

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by the end of the 1990s it had become viewed as a potential asset and means by which to secure certain policy objectives. The general predisposition and desire to renovate social democratic programmatic identity can be seen in the efforts to link reentry into national government in the 1990s to a willingness to experiment with new approaches. In other words, “nowadays participation in (government) power not only creates classic ‘reformist feelings of guilt,’ but also inspires innovative, daring social democratic politics” (Cuperus and Kandel 1998, p. 15). In this sense, Europeanization understood as “internalization of EU inputs and dynamics” into party leaderships’ general orientation to policy issues and governance focused the minds of party leaders in such a way as to reinterpret the EU away from a perception of threat or challenge, and instead into an opportunity. The inevitability of dealing with the EU as an external actor and as a presence in domestic policymaking confronted social democratic leaderships with a potential solution to their programmatic dilemma. By reinterpreting the EU as a help, rather than as a hindrance, to the achievement of social democratic policy goals, the stage was set then to consider the method by which the EU could be influenced. Put another way, “once the question is no longer whether a European government should take action but whether European government should take action, and what that action should be, the relevant conflict dimensions are not necessarily different from the national level” (Thomassen 1998, p. 14, emphasis added). Conclusion The factors explaining the turn toward Europe by social democratic parties are to be found in the four developments I have sketched here, summarized as, first, the rethinking of the role of the state in the context of globalization and liberalization; second, reshaping policies in light of altered (state) means to ends; third, acknowledging the limits to national autonomy as a result of Europeanization; and fourth, resolving the EU issue as a matter of party organizational management. Again, the key to the timing of these programmatic changes is the degree of Europeanization that brought the EU down to earth for party leaders, thus requiring them to engage it constructively in their own

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programmatic renewals. The intensity of these factors will, of course, vary from party to party, but a comparative analysis of how the EU figures in party programs, as well as transnational activities, demonstrates a general engagement with the EU in a practical, problem-solving manner, both in terms of party ideology and party management. Beginning in the late 1980s, “the overwheming majority of social democrats in established EU member states came to recognize that the European Union was the only game in town, and adjusted their policies accordingly” (Marks and Wilson 1999, p. 118). How social democratic parties have organized themselves in order to reverse the EU institutional framework in which “political parties cannot perform the function of co-ordinating policy priorities in the EU” (Peters 1996, p. 67) is the subject of the following chapters.

5

Party Networks and European Union Governance

In Part 1 I described the challenge that European integration poses not only to social democratic parties, but to all parties with a governmental vocation. The European Union, as I have argued, is not simply an external environment impinging on the nature of domestic policymaking, but increasingly a factor affecting the issue basis of competitive party politics within EU member states. This is reflected not only in terms of contesting the legitimate jurisdiction for policy development—what is national, what is EU, what is shared—but also in terms of the direction of European integration itself—pro and anti, left and right. The EU is a multilevel governance regime (Marks, Hooghe, and Blank 1996) in which a core executive does not exist, and as such any attempt on the part of parties to adapt to and influence its institutional and dynamic logic would necessitate innovation in several areas, not the least of which would be a redefinition of the means upon which parties have traditionally mobilized. In this chapter I argue that political parties have responded to the challenge of European integration by, among other measures, redefining the role of transnational parties. This redefinition is evidence of the capacity for innovation by parties as they struggle to influence the overall policy orientation of the EU. The examples I supply to corroborate this account of party adaptation are taken primarily from the PES, but as I stated in the introductory chapter, the social democratic transnational party federation is most advanced in the process of organizational adaptation precisely because social democrats are especially vulnerable to the policy and relevance challenge 81

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of the European Union. The chapter begins by presenting a general introduction to party adaptation to newly relevant environment(s). This discussion is based upon literature explaining party behavior in various arenas, and in this case the EU itself represents the relevant arena in which party activity is directed. The nature of this arena (or level), as with other arenas in which parties operate, demands a type of activity adapted to its environmental logic. I next describe the EU in terms of the multilevel governance model, specifically identifying those “points in the system” targeted by parties. This discussion allows me to map the EU more clearly in terms of what is most relevant to parties in the context of their adaptation. I then turn to an elaboration of the party network model, the transnational organizational form that parties—social democratic ones in particular—have adopted to operate more effectively in the nonparliamentary institutional dynamics of EU policymaking. Convergence of interests among members of a party family is a component in the process of redefining the role of transnational party federations, but owing to the more in-depth discussion of this phenomenon in Chapter 4 in the case of social democratic parties, it will here remain essentially illustrative. The PES, considered as a party network, represents a transnational adaptation on the part of social democratic parties to the EU. Social democratic leaderships, as this chapter demonstrates, have fashioned an organization realistically suited to the complexity of multilevel governance. The PES therefore reflects an innovation on the part of national party actors, for they have elaborated a new manner of coordinated activity that extends beyond each of their national systems, but is still inextricably linked to them through the (successful) output of the actions undertaken by the PES. Environmental Challenge and Party Adaptation Political parties, it is assumed, respond to changes in their environment. Thus changes in electoral rules, for instance, will necessitate changes in party strategy regarding alliances, candidate selection, and so on. Parties also operate in multiple arenas within their domestic environment, for instance, in government, in parliament, in relation to other organizations such as

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interest groups, and so on. An arena is, by definition, competitive in nature. Competition is over control of resources and other factors that impinge upon the activity of the party. One can therefore postulate that parties will attempt to capture or control those centers or sites of decisionmaking that influence the achievement of party goals. Each arena, however, may demand a different form of party involvement and, adapting to each relevant arena will require appropriate types of party activity in order to promote influence and/or secure policy goals. Parties in federal systems have long learned how to operate in two explicit levels of political dynamics, each sometimes vastly different from the other, going as far as multiple party systems. If we assume that the European Union as sketched in the previous chapters impacts the fortunes of social democratic parties, we should therefore conclude that a desire to adapt to this relevant arena will motivate party leaders if not actually to control its power centers, then at least to hunt for opportunities to benefit their domestic goals. In order to conceptualize systematically this adaptation and subsequent activity, I modify an analytical framework linking party behavior in national and EU levels that I believe assists in explaining how and why the party network model became the key form of party response to European integration in the 1990s. In Political Parties in the European Union (1997), Hix and Lord develop a theoretical framework for understanding the link between party organization and behavior at national and European levels, which they claim is based upon “a new structure of threats and opportunities. They have to adapt to the EU and organise themselves for participation in its institutions and rulemaking, if they are to maintain their influence over all the political processes that shape the distribution of values in their own national societies” (p. 5). Their work lays out the main outlines and foundations of my subsequent focus. Here I will briefly summarize their central points regarding parties and the EU and then elaborate upon a few central insights. First, the EU presents policy choices to national parties that may become the basis of a new source of political competition. Second, as parties aggregate and articulate interests at a national level, among other functions, they may want to pursue such activities at a European level. Regarding the development of public policy, parties are interested in managing this process

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for their own ends. In the “EU system, policy goals are secured through the outputs of the domestic and European decisionmaking processes” (p. 22). Third, operating in the EU environment is a fundamental challenge to parties. The “shape of the [EU] strategic environment” mitigates against a simple translation of left-right issues onto the European level because of the varying intensity of the pro- and anti-integration issue. This “strategic environment consequently undermines the possibility of competition between political parties replacing the existing structure of political competition in the EU between the European nation states” (p. 74). Fourth, the structure of the “institutional environment” prevents the emergence of parties operating and exclusively focused on “the pursuit of European-level office and/or policy goals” (p. 74). All in all, “there is an extremely ‘low partyness’ of the EU system” (p. 74). These constraints, however, do not mean that national parties are shut out completely from influencing the European level. In their adaptation to the EU, parties can use certain resources to “reduce the strategic and institutional constraints on their behaviour” (p. 75). The main parties can strive to compete on the European level over classic left-right issues; they can endeavor to increase coordination transnationally; and, finally, they can formally assert the right of parties to operate at the European level, for instance, in promoting the “Party Article” in the Maastricht Treaty on political union, article 138A, which recognizes the contribution of political parties to the European integration process. Finally, short of major constitutional reengineering of the EU, EU politics, although incorporating a certain amount of “partyness,” will not resemble national systems. Indeed, “even if political parties are able to adapt to this difficult environment, it is unlikely that they will be able to reinvent their powerful domestic organisations at the European level” (p. 76). Hix and Lord then develop their argument with examples and further analysis of the relationships between European Parliament party groups, transnational party federations, and national parties. For my purposes, I am particularly interested in the discussion concerning transnational party federations, or “parties beyond the parliament.” However, before turning specifically to this area of partisan organizational development, one final contribution of their work is vital to the following discussion. This is their evidence of actual success, however modest, in

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the pursuit of policy outputs from the EU level. To be exact, it is less specific policy output than it is the construction of a network among the major party families in which common positions on selected issues have influenced the “medium- and longterm EU agenda.” It is worth quoting their summary in some length: This network is an ongoing interaction between the three levels of party organisation in the EU—the national parties, the EP groups, and the party federations. The development from initiation (in working groups), through adoption (by party leaderships), to implementation (in legislative action) is comparable to the policy-making process in any political party in the domestic arena. . . . However, the national parties are willing to participate in this network only because it can contribute to a coherence and consistency on problematic issues in domestic party competition. As a result, this network is not used on every issue on the EU agenda. The party families are only able to develop common policy frameworks on socio economic issues . . . that are easily transferable into domestic party alignments. (pp. 73–74)

Though Hix and Lord do not make direct references to a specific literature as such, they employ the term policy network to describe the logic and direction of party behavior. By way of reducing transaction costs of policy development, they point to the critical role of transnational federations: “for the same costreduction reasons, the national member parties and the EP party groups from the same party families have begun to use the framework of the party federations to develop common policy platforms on a number of European issues” (p. 68). What Hix and Lord provide is a clear framework for analyzing the behavior of national parties as they attempt to adapt to the increasingly salient dimension that is EU policymaking. Parties will have to adapt to the peculiarities of a system in which national states, not parties, are the dominant actors. The key decisionmaking institutions—for example, the commission and Council of Ministers—are not open to electoral acquisition. If individual parties are to pursue policy outputs at the EU level in order to satisfy domestic needs and goals, they are nevertheless forced to develop linkages with parties in other member states, and party families, organized in the form of party federations

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and EP party groups, are the means by which this extranational activity can conceivably be organized. One of the key functions of the party federations, if not the most critical function, is to integrate national parties and EP party groups from the same party family in the activity of the party leaders’ summits, which take place on the fringes of European Council summits. This is the epitome of networking as Hix and Lord present it, and from where a measurable impact of such activity can be evaluated in terms of the EU policy agenda. I now briefly present some modifications or additions to their framework, essentially a further emphasis on selected points rather than wholesale reconfiguration. First, Hix and Lord have made the case that national party adaptation to the EU, through the development of more cohesive EP party groups and the activities of the transnational party federations, has come about essentially as a rational response by party organizations to the political growth of the EU, that is, its increased authoritativeness in policymaking. They make little reference to the ideological bases for various party families’ response to this growth. Although they do assert that national parties hold the reins of partisan activity on the European level, the variableness of this response between party families is absent (although, to be fair, this is not their particular focus). Apart from noting “the problems that globalisation and the ‘crisis of the welfare state’ have presented for left-of-centre parties in particular, and the attendant search for ‘solutions’ at the European level” (pp. 15–16), explaining the degree of cohesiveness within party families, and how this may affect the cohesiveness of their organizational response to the growth of the EU, is not dealt with at a great length. This dimension of party family response as demonstrated in Chapter 4, however, is important, because the motivation of national party leaders to explore the benefits of increased cooperation and coordination with similar parties across national boundaries, and, more specifically, in the type of organization suited for engagement at the European level, relates to their ideology, as well as to the shape of the EU system. In other words, the intensity of convergence among member parties of a party family, plus the actual programmatic incorporation of the EU as a tool for partisan benefit, will help to explain why the social democratic PES appears

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more advanced in the nature of its activities than does the Christian Democratic EPP. Second, transnational party federations emerge as increasingly significant organizations (see also Hix 1998), because here the coordination over policy positions among national parties within a party family becomes apparent and goes some way in bringing classic notions of competition, in the form of left-right construction, to the EU. In the format of party leader meetings, the agreed policy positions are publicly adopted, and in a manner oriented toward influencing the European Council summit and, by extension, the EU policy agenda. But this is only part of the story. Let me return to Hix and Lord’s use of the term policy network. Their use of this term, without qualification, is taken to mean that national actors (parties), organized through transnational party activities, and in conjunction with European Parliament party groups, evolve common positions on selected EU policies. It is a network in two meanings of the word. One, it involves different types of actors: national party leaderships, parliamentary groups, and transnational party secretariats. Second, these actors are based in different levels of activity, or arenas: national, transnational, and supranational. So policy network is used descriptively. The transnational party federations facilitate the EP party group–national party relationship, with party leader meetings representing the crowning activity that the network mobilizes to support. I employ the term party network to denote the activity documented by Hix and Lord and others (for example, Johansson 1999; Ladrech 1999) but also the interactive effects of the network itself. Party network, as I will explain, is a more focused definition of this activity, and there are two main justifications supporting this claim. First, the term policy network, left simply as a descriptive term, does not tell us much about the nature of the effects of this networking on the participants themselves. Second, although party leader meetings are critical, the activities developed by the PES involve important points of contact and policy development beyond the focus of semiannual summits. Party network better conveys what is distinctive about this pattern of activity because it implies (1) partisan content, (2) national parties as the central players, and (3) a motivation on the part of national parties to participate and construct a particular

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type of transnational organization for reasons specifically relating to party relevance. This last aspect incorporates programmatic development within the national parties. Consequently, party network defines the transnational party federation as more than simply an organizational tool of national parties for reducing transaction costs, but also as a site for mediating party family ideological positions with national party adaptation to the EU institutional and policy system, a managed response to Europeanization. As such, the more successful (useful) it is to national parties, a transnational party begins to develop a form of autonomy based on its utility in a fashion similar to that of the European Commission vis-à-vis the member-state executives. Targeting Multilevel Governance In earlier chapters I explained how the relaunched European integration process has affected the legitimacy of national states and in particular the basis of the political and policy positions of social democratic parties. Assuming that the more general post-Keynesian environment, which includes changes in society regarding demographics, the nature of business-labor relations, the legacy of neoliberal policy restructuring, and so on, has contributed to the crisis of social democracy, and that these issues—differently composed depending on the particular national case—represent the background of each national social democratic party’s internal problems, then the nature of the EU’s policy orientation has aggravated this state of affairs. As previously stated, the leaderships of social democratic parties should strive to influence or control EU areas of authoritative decisionmaking in order to pursue policy outputs and reduce tension within the party—for instance, in the case of factionalism that can threaten internal party equilibrium, and even schisms and the setting up of rival parties, especially at the time of European Parliament elections (here examples abound in many EU member states). A number of constraints, however, present themselves when any one party leadership contemplates influencing or controlling the supranational level of decisionmaking. Beyond the fact that the EU is not a parliamentary regime, wherein the commission plays the role of an executive supported directly by a partisan majority resulting from

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European Parliament elections, there are a number of other characteristics complicating attempts by parties to adapt in order to influence channels of decisionmaking. Hix and Lord have addressed the general logic of these constraints, but a further appreciation of the EU system will shed light upon the nature of the social democratic response. This involves the complexity of adapting to a system of governance that is itself evolving and multilevel. The literature describing the European Union as a multilevel governance regime, of which there are several variations, has advantages when speaking both about the effect of European integration on the state, and in conceptualizing the EU in a comprehensive manner. The advantages are brought due to the fact that although member-state executives are not devalued to the point of becoming simply another actor among many, the total environment in which they are embedded does have an effect on their strategies vis-à-vis other actors, supranational and domestic, as well as other member-state governments. As my argument in earlier chapters sought to portray, the European integration process is not doing away with the nation-state, nor for that matter the national executive, which remains a pivotal player on many levels. This being said, however, the multigovernance model as articulated by Marks, Hooghe, and Blank (1996) and by Hooghe and Marks (1997) presents a realistic rendering of EU political dynamics, for it does make a case that European integration has altered the state, and in so doing, affects the very nature of national interest formation (see Chapter 7). For my purposes here, let me quickly sketch the main points of the model, and then fit this with the comments so far developed concerning party adaptation and transnational parties. First, decisionmaking is no longer monopolized by national executives and is shared by actors at different levels, including supranational institutions—“above all, the European Commission, the European Court of Justice, and the European Parliament” (Hooghe and Marks 1997, p. 23). Second, the nature of collective decisionmaking implies that an individual state cannot be a winner all of the time, and the increase in majority decisionmaking in the Council of Ministers means that although compromise is a constant, the overall effect “involves a significant loss of control for individual state executives” (p. 23). Finally, and perhaps most important for the following discussion,

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a variety of actors are able to transcend their original boundaries and participate in exchanges in other levels and arenas. In other words, national executives no longer “monopolise links between domestic and European actors but are one among a variety of actors contesting decisions that are made at a variety of levels” (p. 23). In sum, decisionmaking in the EU “is shaped by multiple, intermeshing competencies, complementary policy functions, and variable lines of authority—features characteristic of multi-level governance” (p. 33). This brief sketch of the multilevel governance features of the EU is sufficient to impress upon one the daunting task of any single party leadership influencing such a regime, especially in translating a partisan perspective onto its complex policymaking process. The constraint for parties, to be blunt, is the sheer complexity of the EU’s decisionmaking process, which is beyond the direct control or influence of even the most powerful member states. Let me now return to the issue of party adaptation. If the multilevel governance model has any validity, it is its focus on the complex interplay between the supranational, the national, and the subnational levels in European politics, in which “the allocation of competencies between national and supranational actors is ambiguous and contested” (p. 39). For parties to target the relevant part of the environment that is itself multilevel, involving supranational as well as transnational dynamics, a direct confrontation with a core power center is impossible. Yet this is the traditional method of party mobilization, using elections as the defining moment to capture or occupy the government apparatus. If policy networks require, in the end, an authoritative center to finally legitimize policy outputs, an alternative method is required in respect to European governance. Party networks strive to bring coherence to mutlilevel governance, at least in terms of the policy agenda, and the prior existing ideological basis reflected in a party family, however rudimentary it may be in the context of European integration inputs, allows a common recognized affinity—a shared identity—to form beyond each national arena. Therefore, one can define a successful transnational party or party network as an organizational nexus involved in the shaping of national party demands to fit the logic of EU governance. In the end, the interaction context that intensive contact and bargaining within the transnational party facilitates structures the nature of the

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national party demands themselves. Thus the party network, existing above the national setting where most domestic politicking unfolds, although intensively focusing party leaders and others on the ramifications of EU dynamics for their partisan policy agenda, becomes inseparable from the processes whereby the member parties reformulate their interests. The party network model, then, represents a form of activity drawing national actors together in order to influence supranational decisionmaking and policy. In a sense, it is similar to the Council of Ministers and the Committee of Permanent Representatives (COREPER) in regard to the effects of its interactive consequences, that is, becoming a body that is supranational as well as national (Barber 1995; Edwards 1996; Hayes-Renshaw, Lesquesne, and Mayor Lopez 1989; Johnston 1994; Lewis 1995; W. Wessels 1991). Edwards, among others, argues that through constant interaction at a myriad of levels, from heads of state and of government in the European Council to the most highly technical of Council working groups, member governments are a part of a complex network of institutions and procedures that makes up EU decision-making. That interaction, indeed, the institutional network itself, inevitably plays a part in determining government strategies and in influencing the goals and objectives of governments both at the national as well as the European levels. (p. 127)

The party network lacks the institutionalization of the Council of Ministers, and the participants already are self-selected by virtue of their partisan orientation. Nevertheless, the party network, while linking EU policy considerations directly into party-political thinking and strategies, unlike the more general process of Europeanization, has a mission in the sense of translating and seeking ways of reacting, if not becoming proactive, vis-à-vis the EU. In some cases regarding a party or government’s European policy, there is a difference in emphasis, tactical silences, and so on, on the part of party/government leaders, between their public articulation for domestic consumption and the development of policies and positions in regard to partner parties or even other governments, from council negotiating positions to the drafting of common partisan policy declarations. One example of this involves the British Labour Party, which especially since its election in 1997 has

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demonstrated a cautious pro-European stance, exemplified in its wait-and-see policy concerning the adoption of the euro. On the other hand, its foreign minister, Robin Cook, cochaired the PES working party that produced its manifesto for the 1999 EP elections. This document, approved unanimously at the March 1999 PES Congress in Milan, contains references to tax harmonization, among other points, publicly ruled out by Chancellor of the Exchequer Gordon Brown when just a couple of months earlier German finance minister Lafontaine raised this as a necessary measure to ensure fair competition. Involvement in the PES network, especially in policy development, may be motivated for reasons other than immediate domestic public consumption, and rather to maintain an influence in transnational projects where positions closer to the national political interest are secured, even though other less desirable points are included. It is not at all surprising that the organizational structure of a new organizational actor should imitate already existing bodies, and the Council of Ministers comes closest to a forum (or format) allowing national-partisan interests to bargain and produce negotiated compromises. To what extent, then, has the PES been grafted onto the EU system in a fashion aiming to maximize national party interests? This is the subject of the following section. The PES Party Network The organizational development of the PES demonstrates a rapid learning curve on the part of social democratic parties as to the appropriate and most efficacious design of their transnational party federation. My purpose in this section is to provide a brief overview and argument regarding the development of the PES in ways intended to maximize its admittedly marginal position as an actor at the European level. The central insight is that the PES has, since its launch in 1992, been altered by the party leaders to assist them in European-level policy development and coordination. Specifically, continuous assessment and consequent amendment of its activities—resulting in a streamlining and more intensive focus on a limited number of initiatives—has conferred upon the PES an increasingly important

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role in the evolution of European social democracy. Its organizational development and mission focus, however, does not mean that it has become more of a “party,” for it is one of my fundamental assertions that the utility of the PES, indeed, its very conceptualization, is as an aid in the creation of Europeanlevel common policies and positions, not as an organization intended to link electorates to an executive authority via competitive elections. The PES is the successor to the Confederation of Socialist Parties of the European Community (CSPEC), a loose structure of parties created in 1974 as a response to the decision at the Hague summit of December 1969 to have direct elections to the European Parliament. CSPEC had itself evolved from the Liaison Bureau of the Socialist Parties of the European Community, created in 1957 between Socialist International member parties in the EC. Although the European Parliament elections served as the catalyst for transforming the Liaison Bureau into CSPEC, the changes in organizational structure were cosmetic, and in the end “the new organisation was closer to the traditional type of cooperation under the Socialist International than to any truly supranational party organisation” (Hix 1995, p. 7). CSPEC decisionmaking was mostly by unanimity of the member parties, and its decisions were not binding. The most revealing aspect of CSPEC’s marginal influence was the fact that a common election manifesto for the 1979 EP elections was unable to be agreed upon, and only a short “Appeal to the Electorate” was issued. The 1984 and 1989 EP elections did have common manifestos, although a number of opt-outs on particular points by member parties undermined the apparent consensus. The European Council summits of 1990 prepared for the Intergovernmental Conference of 1991, and during this time the impact of the quickening pace of European integration, especially in high-profile initiatives such as monetary union, became clearer to party leaders: With the long-term EC agenda ultimately set at the European Council meetings . . . the Confederation and the Socialist Leaders were more concerned with the outcomes of these meetings than the deliberations of the Socialist Group [in the EP]. This became particularly important after the presentation

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of the Delors Report to the Madrid Council, and the sub sequent decision to convene an Intergovernmental Conference (IGC) on EMU to reform the EC Treaties at the end of 1990. The future shape of Europe would again be decided by the EC Heads of Government and the national ministers. (Hix 1995, p. 17)

At this time CSPEC had begun a process of internal reform, which culminated in the November 1992 launch of the PES. If the organizational changes made at the time of CSPEC’s creation were essentially cosmetic, the new statutes (as opposed to simply rules of procedure) did reflect a desire to make the transnational party more efficient. But efficiency relates to the satisfaction of goals, and organizational enhancement must therefore be related to a prior definition of exactly what the goals of the organization are. As the preceding comment suggests, by the time of the IGC, which eventually produced the Treaty on European Union, or the Maastricht Treaty, the implications of the sheer influence of the EU on structuring domestic politics and policymaking were becoming clear. Thus the relevance dimension of the European challenge, and the construction of an appropriate response, are reflected in the attempt to shape the PES into a more vital tool for party leaders. The PES statutes reflect the continuing centrality of the role of national parties; in other words, the PES was not intended to be a federal party organization in which aspects of national party sovereignty were to be shared or else traded up to a European-level central office. Introduced formally into the PES statutes, therefore, was a new article 8, which included as an official organ the “Party Leaders’ Conference,” alongside the congress, bureau, and secretariat. The need for enhanced coordination among major social democratic figures is reflected in the standardization of party leaders’ meetings every two years, as well as the rules governing their activity (articles 16, 17, and 18). Article 9 highlights the change in decisionmaking, with majority and qualified majority voting employed alongside the general desire to emphasize consensus. Consequently, article 9.2 states that administrative and organizational matters can be “taken by simple majority in the Bureau whereby all member parties as well as the President and the Socialist Group have one vote each,” and article 9.3 provides that political decisions “shall in principle be

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taken on the basis of consensus. Decisions regarding policy areas subject to majority decision-making within the EC Council can be taken on the basis of a qualified majority.” In a preparatory document from the British Labour Party concerning the transformation of CSPEC into the PES, bearing in mind that the party had only recently taken on a pro-European position, pragmatic adaptation of transnational structures for national party benefit is viewed as necessary: It is absolutely necessary that there is far greater co-operation at a political level by Socialist, Labour and Social Democratic parties in government, including regular meetings of Ministers (and Shadow Ministers/Opposition Spokespersons) as well as Party Leaders. ... The EPP were far more effective in the pre-Maastricht discussions than the Socialists, largely because of the lack of co-ordination and co-operation between Socialist parties in government compared to the effective EPP meetings. ... The question of moving to a system of qualified majority voting is only relevent if it can make the Confederation/Eurosocialists more effective. This means it shall concentrate on those areas where we agree rather than being used in such a way as to highlight differences of approach or attitude to controversial questions. ... In principle we have no objection to qualified majority voting in the Confederation/Eurosocialists on those areas where qualified majority voting also applies in the Council of Ministers. ... The emphasis in political declarations of the Confederation whether at the Leaders Summit meetings or at lower level meetings, including the Bureau, should be firmly based on assisting the development of our policies and highlighting those key areas where we agree. (Labour Party 1992)

The aims of the PES are contained in article 3, and there are nine of them, ranging from “to strengthen the socialist and social democratic movement in the Community and throughout Europe” to “adopt a common electoral program for European parliamentary elections.” Throughout all nine aims, the language chosen to define them is indicative of how the PES was to

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link national parties and other elements of the party family. Thus we see phrases such as “to develop close working relationships,” “to define common policies,” ”to prepare structures for an ever closer collaboration,” “to engage parties’ members in activities of the Party,” “to guarantee close cooperation with the Socialist Group,” and to “promote exchanges and contacts with European trade unions.” Various party leaders may interpret these aims according to their own national circumstances, yet a common understanding of the proposed role for the PES appears evident. Less than a year after the launch of the PES, four party leaders were asked a number of questions regarding the direction of the PES, and although there is a clear variation between them in terms of the degree to which the PES should take initiatives, all agree that national parties should use the new party. Below are edited selections from this interview: Question: At the moment of its foundation, the [PES] inherits the structures of the old confederation, modified to allow for majority voting in certain circumstances. How do you envisage the development of democratic and accountable forms of organisation in the new Party? Andreas Papandreou (President of PASOK): The development of the European Union makes necessary the consolidation of socialists’ leading role in European construction. . . . At this stage, the PES, unlike national parties, will not consist of a mass party. Rather, it will lead the way in terms of ideology and programme development, and take responsibility for improved socialist co-ordination within the Council, the Commission, the European Parliament, and among our parties. Poul Nyrup Rasmussen (Chair of the Danish Social Democratic Party): I believe there is no urgent need to modify the structures inherited from the old Confederation, as I am of the more fundamental opinion that, although the name of the Party of European Socialists indicates the opposite, our national parties still form the basis of any political action undertaken. Michel Rocard (First Secretary of the French Socialist Party): At the moment of the foundation of our new European party, I believe it necessary to have the national parties elect their delegates to the Congress of the [PES]. It would be necessary for the new party to have a document restating the major stances of the different member parties and the communiques of the vice-presidents of the [PES]. Before thinking of any other measures, we need to succeed in this first step.

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Mario Soares (Portuguese Socialist Party and Honorary President of the Socialist International): It is obvious that, in theory, for the [PES] to be genuinely so, it must have a joint programme and statutorily defined and democratically controlled bodies. *** Question: What means of contact could be developed between active Party members within the different national parties? Papandreou: It is true that, in the framework of the PES, contacts should be developed between different levels and members of our national parties. Conferences, preparatory meetings, and various political activities could open up such opportunities. The PES should also have a more active presence in the member states, and an improved information system should be developed within the PES member parties and the Socialist Group [in the EP]. Rasmussen: In order to deveop contacts between active Party members within the different national parties, one could envisage the setting-up of an exchange of active members on the basis of grants for limited time periods, their participation in seminars and conferences organized jointly by the national parties, and a more systematic and frequent exchange of information concerning each party’s activities. Soares: I do not think that these should be provided a priori. In my view, they should be the result of a broad debate within national parties and in the [PES]. *** Question: What would be your priorities in developing the links between Party organizations in office at national, regional, and local governmental levels? Papandreou: The PES could contribute in this direction as one of its aims is to reinforce a broad Socialist network in Europe at all levels. An improved information system is an important factor for this. Rasmussen: It seems to me that the present level of exchanges between party organizations in government is satisfactory. However, such exchanges between regions, or between local councils, remain quite insufficient. I believe that it is important that we try to promote the creation of further links between local councils and regions, and although the Maastricht Treaty to some extent remedies the deficiencies in

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the present situation, I believe we should give some further thoughts as to how to promote these exchanges. Rocard: In order to link the activities of socialists at different levels—national, regional, local—I think we must have periodical regular meetings of the leaders of the parties, with the relevant Socialist ministers. Soares: I am in favour of major decentralization within the context of European Union. . . . Exchanges within this vast network should be very loose—leaving the initiative to those concerned—and obviously should receive maximum encouragement from the [PES]. *** Question: What would you like to say in conclusion? Papandreou: The forces of democratic socialism today in Europe have to elaborate an alternative strategy for development in a spirit of social justice, and for the democratic organization of international political and economic relations. . . . Rasmussen: The [PES] should efficiently and rapidly respond to major political events whenever possible in the form of a statement from a meeting of Party leaders. The Party should, first and foremost, address itself to the main problems of today’s society: that is, unemployment, the environment, and the social dimension, and only in the second instance pronounce itself on institutional matters, and matters of a more academic interest to the public. (excerpts from “How Should We Build” 1993)

These comments portray differences between these party leaders more over the level of intensity of a dynamic PES and less over whether there ought to be a transnational organization enabling national parties to develop common European policies and to network among themselves. Over the course of the following five years, from 1993 through 1997, the PES did in fact strengthen certain aspects of its networking role, again using the party leaders’ summits as a pinnacle of semiannual activities, but selectively expanding other high-profile and significant opportunities for intensive coordination and policy development. What follows is a presentation of some PES-proposed initiatives and activities, accompanied by my own assessment and further proposals. I have concentrated on those proposals and activities that are by their very nature aimed at bringing

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about greater European-level policy development involving prominent national party and governmental figures. The following two excerpts represent statements about the mission and operationalization of the PES: 1993–1994 Work Programme, adopted at the Hague Congress, November 9–10, 1992. A priority in addition to a “build-up towards European elections” is to “set up and develop a structure for political coordination covering socialist and social democratic leaders of all parties (in government or in opposition), ministers, and EC commissioners.” Party leader meetings should continue to be to the point and to stimulate political action (follow-up). Socialist prime ministers, deputy prime ministers and ministers of Foreign Affairs will continue to be invited. The main topics of the discussions should be the agenda of the European Council. In principle important meetings of the different Council of Ministers should be informally discussed beforehand by socialist and social democratic ministers. The PES should take the initiative. Opposition parties should be informed of these meetings. Party leader meetings, the President and the vice-presidents anyway have the power to act when coordination fails. PES Activity Programme, 1995–1996, adopted at March 1995 Barcelona Congress. Networking: The PES is the (only) organisation with the explicit task to create the necessary conditions for a close cooperation between Socialists and Social Democrats on the level of the European Union. Being “a party of parties” its first reference is its member parties. For a real coordination, however, this network has to be extended. Apart from the parliamentary group in the European Parliament, the trade unions and the Socialist International, better contacts and coordination have to be established with the Socialist and Social Democratic members of the European Commission and EU Council. The Intergovernmental Conference 1996 will be a first opportunity to try to establish and mobilize this wide network.

The following two excerpts, both articulated by the recently elected PES president Rudolf Scharping, attest to the self-reflection by the PES secretariat and political leaders as to their methods for better networking, or, in other words, a self-assessment of their tactics. The proposal to involve personal advisers with

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prime ministers/leaders in preparation of European Council meetings and the following acknowledgment of its relative success demonstrate the deepening of the PES network, as well as the willingness of political leaders to bring European affairs closer to high political supervision: Note for the attention of Bureau members, in preparation for PES Bureau Meeting of June 1995. Observations from the President (Rudolf Scharping). Networking: The PES statutes are very clear about the fact that the PES is not just there to bring about political cooperation among its member parties. A core task of the PES is to assure that member party representatives and Socialists and Social Democrats active within the European institutions (Parliament, Commission and Council) meet in order to formulate common policy goals and strategies. The ties between the PES and the Group of the PES are strong. . . . The involvement of socialist and social democratic members of the European Commission in PES activities has improved considerably over the last years and will have to be further developed. . . . The links between the PES and PES ministers participating in the EU Council are very weak. The establishment of some sort of cooperation in specific areas (for example the IGC, social affairs, etc.) is a precondition for the establishment of a European social democrat–democratic socialist policy and/or strategy. As a first step I would like to look into the possibility of consulting personal representatives of prime ministers (and/ or ministers of foreign and European affairs) in the preparatory phase of PES summits linked to EU council summits. Furthermore, members of the PES Bureau from the member state presiding the Council could facilitate PES Bureau contacts with the EU Council. Rudolf Scharping: PES Activities and Priorities 1996/1997, March 1996. Networking: European Council: The PES leaders’ meetings have become more and more influential with regard to the political coordination of European Social Democrats and democratic Socialists within the European Institutions. On a number of occasions, party leaders’ meetings have been followed by gatherings of PES participants at EU-summit meetings (“prime ministers’ meetings”) which have proven effective. In the context of the June 1996 Party Leaders’ meeting, the PES will, for the first time, organise contacts between the

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PES Prime Ministers’ senior advisors. Coordination between the so called “sherpas” some weeks before a Council meeting could promote increased cooperation among the PES Council participants. European Commission: The PES, represented by its vicechair Philippe Busquin, has promoted more active involvement of Socialist and Social Democratic members of the Commission in the work of the PES (Bureau, working parties, leaders’ meetings and special coordination meetings). Cooperation with the Parliamentary Group of the PES also helps to ensure that coordination between all EU-institutions exists. Strengthened PES Cooperation: At its last meeting of 7th February [1996], the PES Bureau concluded that the PES is performing well in a number of areas involving a limited number of high-level party representatives. Five years after the founding of the PES in The Hague we need to prepare for a major step forward in order to create a Party of European Socialists which is an integral part of the member party organisations, and a true reflection of the reality of European political integration. A core theme for next year’s Congress (apart from the IGC, EU enlargement and the “Delors proposals”) will have to be the political and organisational strengthening of the PES. I will work together with the PES Bureau to prepare proposals aiming to: • Redefine the working methods and role of the PES in light of the need to make the PES known to the rank and file of its member parties • Further extend the network function of the PES bringing together its member parties with PES members of the Euroean Council, Commission and Parliament • [Give] the PES a legal and independent basis (article 138a of the EU Treaty) The political will of the PES member parties and the Parliamentary Group of the PES to further develop the PES will also involve widening its organisational and financial basis.

Whereas the previous selected quotations focus on PES organizational matters, the following quotations point to a more policy-substantive evaluation, in this case employment. Presented during the course of the intergovernmental conference leading to the Amsterdam Treaty, it also brings attention to the growing organizational density of PES ECOFIN meetings:

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PES Activity Report 1996–1997, May 1997. Employment: Since its last Congress in Barcelona in 1995 employment has been the first priority of the PES. The work of the meetings of the Socialist members of the Employment and Social Affairs Council, the reflection team led by Jacques Delors into “A new model of development” and the working group on the IGC and Enlargement composed of personal representatives of the Leaders under the responsibility of Antonio Vittorino and Jan Marinus Wiersma, will probably lead to the realisation of our wish to have an Employment Chapter in the new Treaty, and the creation of an Employment Committee. The meetings of Socialist members of ECOFIN, which began at the request of the Leaders, have been highly successful and have sought to put our desire to build a prosperous Europe into effect. PES Leaders Meetings: Employment has also been the first priority of the Leaders, the frequency of whose meetings has increased considerably since the last Congress. Several measures have been taken to improve the efficiency of the Leaders’ meetings: • There are now regular meetings of the Socialist members of the European Council, the Prime Ministers and Foreign Ministers, with the President of the Party and the Leader of the Parliamentary Group, which define a joint strategy to advance socialist priorities. • These meetings are prepared by meetings of their senior advisors (the so called Sherpas) who meet at least twice before each European Council, one sometime in advance, the other just before the Summit itself. These meetings have been especially fruitful when one of our member parties is in the government of the country holding the Presidency of the European Union. PES Council Coordination: As has been mentioned above, the Socialist members of the ECOFIN and the Social Affairs Council have met on a regular basis. Meetings of the Socialist members of the Transport and Research Councils have also been held. Representatives of member parties in opposition and of the PES Parliamentary Group take part in these meetings.

These extracts tell a story of an ever-increasing focus by the PES to organize its member influence upon the input points of the EU decisonmaking apparatus, from semiannual European Council Summits to Council of Minister meetings. Through a

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number of working parties (discussed in more detail in Chapter 6), the PES has involved senior politicians from member parties in drafting explicitly European proposals for problems shared by all or most member states. Although the next chapter will assess the actual impact of the PES efforts to influence the EU agenda, at the very least both the expansion and increased rate of meetings by senior party and government officials under the auspices of the PES attest to a success of sorts, that is, the establishment of a network with realistically chosen aims and goals. In the party network model described earlier in this chapter, I sought to define how a self-selected group of participants, in this case parties from a single-party family, would organize their response to the challenge of European Union. The organizational development of the PES since its launch in 1992 demonstrates certain aspects of this model. 1. Employing the term party network rather than policy network emphasized the partisan coloration of the goals of the network. Policy and programmatic development is surely a component in the achievement of the ultimate goal, which is to change the policy agenda of the EU in such a way as to satisfy national party requirements. As such, politicization of EU politics is in fact a hoped-for development, as this lends credibility to the idea that the activities of national parties can indeed bring promised change at the European level. In a note addressed to PES president Scharping by bureau member Gérard Fuchs of the French PS, entitled “Bringing the PSE to Life,” a competitive, partisan dimension at the EU level is deemed necessary for the PES to have a wider impact. One change in PES strategy, according to Fuchs, is to promote differences with other actors at the European level: “To exist politically you have also to oppose. I think it is imperative for European Socialists to move away from a strategy of cooperation with the Christian Democrats or the Liberals to a strategy of opposition, at least in those areas where the institutional mechanisms do not require a qualified majority. It must be made crystal clear to public opinion that the confrontation between right and left, between conservatives and progressives, is just as real and pertinent at European level as it is at national level.” As socioeconomic issues such as unemployment (see Chapter 6) have been selected

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as the main basis of confrontation, that is, a cleavage relating to traditional left-right competition, party networks assist in translating the national positions into European-wide platforms. 2. A party network is primarily composed of political parties as the dominant and defining participants. This is clearly demonstrated in the launch and subsequent development of the PES. Although relations are often described as good and constructive with the parliamentary group of the PES in the EP, the national parties, either directly in contact with their Member of the European Parliament (MEP) or through the PES, have set the policy and strategy of social democrats in the EU. This does not preclude a growing influence on the part of the group as the EP itself continues its own institutional evolution, and the Amsterdam Treaty is the latest treaty revision granting the EP even more power in the EU interinstitutional relationship. Yet parties still call the shots in partisan activity at the European level, and a contributing reason for this relates to the problems of constructing a left bloc in the EP (Raunio 1999), and the nature of the decisionmaking rules regarding institutional reform. On the institutional question, the need for a qualified majority to reform EU procedures requires a PES-EPP alliance, that is, a nonpartisan coalition. The implications of this situation for PES-group relations, as well as where to focus limited resources, are expressed by the former Socialist Group president, Jean-Pierre Cot, commenting on a perceptible politicization within the EP between two major blocs: What strategies can then be envisaged? A grand coalition on institutions and a Left-Right confrontation on fundamental subjects? This doesn’t seem to me to be possible, because institutional problems and fundamental questions are tightly linked. One could not, for example, build a social Europe without majority voting, institutional reform being preliminary to any political progress. If we do not want a Europe reduced to simply a giant market, we must insist more on the institutional path, notably in order to put an end to the abusive usage of the right of veto by the partisans of a minimalist Europe. The debate between liberalism and socialism therefore intersects very largely the debate on institutions. The principle of the qualified majority, in vigor in the Parliament of Strasbourg, seems to me to be sensible. The adoption of principal decisions thus demands the mustering

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of a large coalition. This arrangement is indispensable, in this transitory phase, because we are not ready, at the European level, to see an important text voted by the narrowest of margins, by three or four votes ahead, as is the rule in a democracy. This necessity of forming coalitions must not prevent socialists from affirming with force their identity, in order to impose themselves in future debates. I do not see, for my part, any contradiction between the vivacity of political confrontation and this rule, temporary, of consensus that the European Parliament needs in order to acquire the authority which it presently lacks. (Cot 1993, pp. 39–40)

Since Cot’s remarks in 1993, evidence of growing cohesion among the Socialist Group, and also between the group and other left-of-center parliamentary groups, has evolved. The fact that members of the European Commission have explicitly demonstrated their participation in party leaders’ summits, while not directly influencing their work as commissioners, does lend some profile to the notion of a truly European party family. 3. A party network exists in the first place to promote the interests of national parties, which are themselves affected by the intensification and growing scope of the EU. As Hix and Lord (1997) state, national parties have turned their attention more intensively toward the EU because it represents “a new structure of threats and opportunities. They have to adapt . . . if they are to maintain their influence over all the political processes that shape the distribution of values in their own national societies” (p. 5). Yet the very type of organization constructed to project coordinated national party action at the European level incorporates features of national party, or party family, identity, expressed through a prior convergence of ideology and policy goals. The EPP, and more specifically the EPP group in the European Parliament, was until the early 1990s composed primarily of Christian Democratic parties, for whom European integration was a feature in their ideological profile. Consequently, the EPP party federation had as part of its aims the promotion of a federal Europe, and a reflection of Christian values in this entity. It had, in other words, a primary goal that was institutional in nature. The focus of its attention was not European institutions as such, but national authorities that held ultimate power concerning more or less integration, or movement toward a European neofederalism or

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remaining essentially intergovernmental. Thus a highly developed organization as I have described the PES was not required—in fact, could not realistically be organized. As the pace of integration has slowed to more of a consolidation phase, and as the EPP has expanded its membership to include parties for whom European federalism is actually an anathema, for example, the British Conservatives or French Gaullists, the EPP is forced to turn explicitly toward policy content, and here the Christian Democratic values regarding social welfare represented by the Belgian parties contrast with the more neoliberal concerns of the conservative parties now in the group. The EPP party structure reflects this ideological heterogeneity far more than do the social democrats. According to Jansen (1998b), it was necessary in view of all the different concepts of politics and political identity that were at stake—to devise a basic political framework for the enlargement of the EPP that would command wide acceptance or, at the least, minimize differences. In the light of the sensitivities and historical baggage that surrounded the question of how Christian Democrats and Conservatives should be related, such a framework had, above all, to avoid an irreparable rupture between the existing parties of the EPP. (p. 109)

Conclusion The convergence of social democratic parties in the 1980s and 1990s described in Chapter 4 is reflected in the comparatively high level of voting discipline reflected in the Socialist Group of the PES. This convergence of the national parties around a reform agenda (Lazar 1999) has allowed the various national party leaderships to debate appropriate strategies, not argue over basic and fundamental goals. The PES party network is successful at least in this regard, that is, in bringing relevant party officials together, and the increased relevance of this activity may also have a further impact, a socializing or Europeanizing effect. This is not to say, following the claim of sociological institutionalism regarding norms and values of institutions being learned by individuals such that appropriate preferences are formed, that interaction within the PES network causes party

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officials to become more supranational (Beyers 1999; Hooghe 1999), simply that this exposure may widen horizons beyond the national context when policy options are considered and developed. In the next chapter, evidence is presented concerning the influence of the PES on the EU policy agenda, for in the final analysis, the PES is intended to be more than simply a club for party elites, and instead a means to bring social democratic priorities to the EU.

6

The PES and European Union Agenda Setting

The party network of European social democrats aims to achieve its goals through the intensive cooperation of party leaders and other prominent party officials—in government and in the opposition—in the development of common policies and strategies, and then advocating them in the most efficacious manner within the fragmented and multilevel EU system. The institutionalization of the PES is then, on the one hand, a form of lowering transaction costs for national parties, who individually are greatly disadvantaged in operating outside their national political systems. On the other hand, the impact of the PES, because its dominant participants—party leaders—also occupy national executive office at times, affects the nature of intergovernmental bargaining. Thus the more institutionalized the PES becomes, the more it may contribute toward changing the fragmented nature (“garbage can” model) of the EU policymaking process. This chapter moves from documenting the construction of the PES network to presenting its output as measured by tangible contributions to the EU agenda. The preceding chapter analyzed the involvement of a number of individuals and party leaders in an increasingly focused transnational network. The very fact that many party leaders in the late 1990s were also prime ministers, that is, preoccupied with daily governance as well as with party management, and yet continued to involve themselves in the work of the PES, attests to a type of success all of its own. Further, institutionalizing the activities of prime ministers’ senior advisers (or “sherpas”) in the run-up to a European Council summit under the auspices of the PES demonstrates the 109

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utility that the party network has maintained both for party-toparty relations and in coordinating prenegotiation government positions. What has been accomplished to date? What are realistic expectations for success? Influencing the EU agenda by introducing new priorities is one way of measuring success, and this chapter will briefly consider evidence of such efforts. In the attempt to influence the EU agenda, however, I stated at the beginning of this book that this may also go some way toward defining a truly European social democracy. This idea will be evaluated in the concluding chapter, but one should expect that a necessary aspect of its manifestation would be defining and acting upon common positions regarding the goals of EU action. This chapter will first present a balance sheet of PES efforts. I will then turn to an assessment of these developments in light of the more general issue of whether or not they have imparted a social democratic orientation to EU policymaking, or, as a high-ranking civil servant in the European Commission put it, an “ideological re-balancing” (“La lutte contre” 1999, sec. 2, p. 2). PES Activities and Agenda Setting It may be useful to think of the PES as similar to what Sabatier (1988) has described as an “advocacy coalition,” that is, a coalition of actors who share a particular belief system and who show a nontrivial degree of coordinated activity over time. Richardson (1996), evaluating Sabatier’s advocacy coalition concept in the context of EU policymaking, states that “it is shared beliefs which provide the principle ‘glue’ of politics, indeed, he [Sabatier] emphasises stability of belief systems as an important characteristic of policy sub-systems” (p. 18). Also borrowing insights from Sabatier is Johansson (1999), who writes, in regard to transnational coalition formation, that “on the basis of ideas and consensual knowledge, units inside a transnational coalition also combine to defend interests. It is in this connection that ‘advocacy coalitions’ may emerge. . . . Individuals in the coalitions may therefore act as policy entrepreneurs, or ‘advocates,’ exploiting the number of access points in the EU system” (p. 88). The PES, especially because of the linkages between its units

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(parties) represented by party family ideological presuppositions and assumptions, appears as a type of advocacy coalition par excellence. Incorporating notions of advocacy coalitions in his analysis into the logic and activities of transnational networks made up of parties, Johansson has traced the influence of the PES, along with trade unions, governments, and European institutions, operating as advocates for inclusion of the Employment Chapter in the Amsterdam Treaty. Its placement onto the final treaty (it originally was not on the table of items for negotiation and bargaining at the beginning of the IGC) has been claimed as one of the most tangible and visible successes of the PES to date. In Johansson’s analysis, “there was a clear party-political pattern behind the support given by individual governments. This pattern illuminates ideological divisions over the socio-economic dimension of politics” (p. 98). According to Johansson, through a variety of activities the PES contributed to putting the employment title on the IGC agenda and driving it along to the concluding Amsterdam summit. The group of Sherpas, which is made up of personal representatives of party leaders in government and the chairman of the PES Group, met to co-ordinate approaches in view of the European Council summits and to influence the direction of the IGC. Also, there was a PES working group on the IGC. At another level, there was the party leaders’ conference, which brings together party leaders and heads of government along with a couple of commissioners, the chairman of the PES Group as well as the PES president and secretary-general. (p. 89)

Tracing these activities in more detail with regard to the employment issue, Johansson conveys just how important this advocacy network was in maintaining a high profile for employment as well as in discussions concerning methods beyond the treaty language to actually develop further policy initiatives on the issue. Considering the overall intellectual paradigm leading up to the Amsterdam summit, with neoliberal economic orthodoxy privileging sound money and the German government’s promotion of a Stability Pact, the fact that the Employment Chapter and subsequent measures were adopted, however nonconstraining

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they may be, indicates the possibility of “a new axis for policy development” (Dyson 1999, p. 195). The Employment Chapter in the Amsterdam Treaty is certainly the most visible output of the PES network, suggesting that with social democratic governments in power, the EU political agenda shifted towards a higher valuation on growth and employment objectives; on protecting and promoting infrastructural spending and renewing the “capital stock”; on social exclusion and poverty; on eliminating unfair competition in social policy, labour market policy and taxation so as to ensure minimum standards of social protection; on defining an optimal policy mix at the EU level to strengthen economic development; and on strengthening European policy coordination for these purposes. (Dyson 1999, p. 197)

These items for a revised EU agenda did not simply “come off the shelf” late in the game, but are products of the PES network’s internal coordination and cooperation over common policies. According to a recent PES document, as the EU “went into the 1994 elections to the European Parliament, there had been little common ground among member States on how—or even whether—to address the scale and nature of the unemployment problems they faced, together, as a Union” (PES 1999e, p. 3). Linking PES proposals and activities to output is the focus of the rest of this section. Backgro und A “Putting Europe to Work” report was initiated in September 1993 as a result of a request made by the PES party leaders to deepen the discussion on employment policies. An ad hoc working party of personal representatives of national party leaders, representatives from the Socialist Group of the PES in the EP, a representative from the European Trade Union Confederation, and senior commission officials (already engaged in the Delors white paper) began a sustained, in-depth discussion (four meetings in three months) that enabled its chair to present the first comprehensive report to the PES Brussels summit in December 1993. The PES party leaders adopted the report and called on the working party to further develop a series of

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points. A second version of the report was adopted by the party leaders at their Corfou summit in June 1994, and the resulting employment strategy served as a common program for the PES candidates in all EU member states in the 1994 European elections. Impact Is the current EU employment agenda, broadly defined, the result of the PES action program? In addition to the Employment Chapter in the Amsterdam Treaty, there is also the case of the November 1997 extraordinary Luxembourg jobs summit and its agreement on a common strategy for member states, based on four pillars: employability, entrepreneurship, adaptability, and equal opportunities. National action plans were required to be submitted in 1998, and finally a European Employment Pact was adopted at the 1999 Cologne European Council summit. The PES network was active behind the scenes promoting its program. Comparing its proposals and the action taken, an apparent linkage may be seen. Invest in human resources. The PES program called for an improvement in quality and capacity of education, training, and skill development and for the expansion of discussions on reducing working time to include the issue of reeducation. Actions taken as a result of the Luxembourg summit include the employability section of the employment strategy, which underlined making human resources investment a top priority; a doubling of resources for retraining over five years; and the urging of social partners to enter negotiation, at the national level, on provisions for lifelong learning. Invest in new organization of work and new pattern of working life. The PES program states that “a high tech, high skill economy requires a new organisation of work, quite different from the Tayloristic model that has been prevailing for almost a century.” The program calls for taking advantage of new information and communication technology and new decentralized work practices, and for employers and unions at the European level to consult on these issues. Actions taken include a commission communication,

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in November 1998, called “Modernizing the Organization of Work: A Positive Approach to Change,” inviting social partners at all levels to seek to establish common objectives and develop a process of modernization. The Luxembourg summit European employment strategy with regard to the third pillar, adaptability, also identifies the importance of modernization of the organization of work. Invest in equal opportunities. The PES program emphasized active measures for equal opportunities for men and women, including ways in which work and family responsibility could be combined, legislation barring discrimination against part-time workers, reform of taxation and social security systems, and new opportunities for the long-term unemployed. Actions taken include the 1995 Fourth Action Programme for Equal Opportunities, which established the priniciple of mainstreaming, and the equal opportunities pillar in the Luxembourg employment strategy. Invest in new productive capacity. Calls for measures to increase investment in productive capacity included ECOFIN and the (then) European Monetary Institute cooperating in reducing interest rates, avoiding damaging tax competition, deploying fiscal policy to stimulate private investment, and committing to reemployment as policy for private investment. Actions taken have included agreement at the Vienna summit for a better synergy between economic and employment policies; initiatives raised by both Austrian and German European Council presidencies to avoid tax competition; and, in 1998, the adoption by ECOFIN of the Employment and Growth Initiative, providing ECU 420 million over three years for innovative and job-creating Small and Medium-Sized Enterprises (SMEs). Invest in improved infrastructure. The PES program urged infrastructure investment as part of a medium- and long-term growth strategy. It urged public and private partnerships in financing and called for an exploration of the potential of new financial instruments at the European level, such as bonds for infrastructure and innovation. Action taken has included the identification of fourteen trans-European infrastructure networks (TENs)

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projects at the December 1994 Essen summit, and the European Commission review of progress in the implementation of the TENs at the Cardiff 1998 June summit. Invest in an effective employment service to bridge the gap between supply and demand. The PES program called for matching vacancies with job seekers in a more efficient manner—a strengthening in information, placement, and labor market adjustment, and integrating computer technology and networks into vacancy availability. Actions taken include, in the European employment strategy adopted in Luxembourg, making youth and long-term unemployment a top priority. The European Commission has also developed a framework for the improvement of Public Employment Services to support the European employment strategy, which focuses on information, brokerage, and labor market adjustment. These are some of the comparisons between PES positions developed over the course of 1993 and 1994 and adopted by party leaders, and actions taken by the European Commission, European Council summits, and the extraordinary Luxembourg summit. The latest action, the Employment Pact agreed to in Cologne in June 1999, was also promoted at the PES Congress in March 1999 in Milan. Although it would be simplistic to assume that the action taken has resulted solely from PES proposals and its mobilized network, it does appear that at least in principle the PES agenda has become the employment agenda of the EU. In the next section, I undertake a general assessment of the utility of the PES network in promoting a social democratic European orientation to the wider political-economic agenda of the EU. Social Democracy in Euroland The launch of the single currency, the euro, on January 1, 1999, is no doubt one of the greatest single efforts in European integration since the creation of the EU over forty years earlier. For a number of reasons, Economic and Monetary Union (EMU) alters the logic of domestic policymaking in the realm of economic policy. At a symbolic level, the abdication of national

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currencies highlights the degree to which notions of national sovereignty must be revised. The intellectual challenge to policymakers, who are by and large committed to working within the boundaries established by the Maastricht Treaty, and additional frameworks such as the Growth and Stability Pact, which is designed to ensure budgetary discipline in national budgets (hereafter referred to as the Stability Pact), is to find ways in which political agency may be exercised. Although social democrats did support EMU and the Stability Pact with varying degrees of enthusiasm, by the late 1990s it was clear to many social democratic leaders that further measures were required to add a social-political dimension to the purely monetary logic of the new European Central Bank (ECB), and upon his election just prior to the Amsterdam summit, French prime minister Jospin argued, unsuccessfully, for a renegotiation and revision of the Stability Pact and the mission of the ECB. Nevertheless, the predominance of social democrats in national government throughout the EU, and especially for the first time in Germany, France, Italy, and the United Kingdom simultaneously, did seem to present a rare opportunity to translate their concerns into action, that is, to influence the EU agenda regarding its political-economic orientation. If the PES network had proved to be of added value regarding employment policy, surely the wider macroeconomic logic of EMU could also become a point of discussion, common policy development, and even action. In this section I review the extent to which one can perceive a social democratic macroeconomic orientation taking shape on a European level. As my point of departure in this exercise, I engage directly the argument of Kenneth Dyson in his recent article “Benign or Malevolent Leviathan? Social Democratic Governments in a Neo-Liberal Euro Area” (1999). In short, Dyson argues that, in broad terms, “social democratic governments brought a difference in priorities within, and attitudes to, the euro area” (p. 205). He backs up this assertion with mention of the stress laid on employment issues and economic policy coordination. Although I do not take issue with his rendering of the proof of this difference of attitude, “indicating the impact of changes in the parties of government” (p. 195), one is left wondering if the examples given are simply coincidental, discrete developments, or the manifestation, as I argue, of the efforts made by the PES network.

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Dyson’s argument is that the neoliberal logic that led to the Maastricht Treaty and the Stability Pact was part of an intellectual paradigm that “grounded economic policy on the overriding importance of price stability and of credibility in the financial markets” (p. 198). The Maastricht Treaty convergence criteria “served above all to bind the hands of EC finance ministers to ensure that economic stability remained the paramount objective. . . . Maastricht created a new framework for ‘binding Leviathan’” (p. 200). The new political context, firmly established with the election of the SPD-Green government in Germany in September 1998, meant that a “new path opened up: towards a reshaped discourse about EMU based on strengthening the pole of economic policy coordination in the service of redefined objectives and setting minimum standards in taxation, labour market and social policies. . . . Fundamentally, social democratic political leaders were disposed to see Leviathan as more benign than the inherited neo-liberal design of EMU had envisaged” (p. 201). According to Dyson, the conclusions that emerged from the informal European Council meeting at Pörtschach on October 25–26, 1998 “were widely seen as a turning-point in the EU’s agenda, indicating the impact of changes in the parties of government” (p. 195). Although “a change of political climate had already beg[u]n to manifest itself in EU policy in 1996–7” (p. 195), notably in the employment articles in the Amsterdam Treaty and a code of conduct against harmful tax competition, the “newly ascendant social democracy in the EU” (p. 196) seems to spring forth fully formed in 1998, helped by the fact that in 1997 the national governments of the UK, France, and Italy turned to the left. Also, “at Pörtschach and in the first meeting of Lafontaine and Strauss-Kahn, there was evidence of a new political ambition for the EU to play an active role as a contributor to regional and international stability” (p. 205). Seemingly independent of each other, Dyson reports on Jospin’s speech to the PS summer school at La Rochelle in August 1998 and Lafontaine discusses it in his book (Lafontaine and Müller 1998), both arguing for new EU initiatives to promote growth and employment. An additional contributing factor mentioned by Dyson, also during this same time period (1997 and 1998) was that “behind the scenes Delors’s ‘Notre Europe’ research and study group had been active since 1997 in

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promoting the idea of a pact for the coordination of economic policies based on strengthening the role and competencies of the economic ‘pole’” (p. 203). In the end, the initiative and new ideas apparently come down to the coincidence of French and German elections in which social democrats with avowedly European-wide activist plans are brought to power and are able by the following year at a European Council informal meeting to have their general views on economic coordination accepted. To be fair, the thrust of Dyson’s article is not on the prior development of European positions by social democrats, though references to the political-economic orientations of Blair, Jospin, and Lafontaine are raised. Furthermore, the new correlation of forces in EU national capitals is also assumed by others to explain the shift toward employment and social issues in the final draft of the Amsterdam Treaty: “In the context of the negotiating record of the conference [IGC], it seems clear that the emphasis on social issues in the Treaty can only be explained in terms of the last-minute victories of leftist governments in France and especially the United Kingdom. . . . The Treaty of Amsterdam was negotiated principally by governments of the left and center-left, and bears their imprint” (Pollack 1998, p. 31). Although both Dyson and Pollack appear to be incorporating a party-family ideological dimension to EU member-state preference formation, last-minute elections could make a difference only if prior positions between social democrats in government throughout the IGC and those in opposition had already been involved in some form of collaboration. Although I do not dispute the fact that, indeed, by 1998 it appeared that a left-right division had opened up on the European level over the consequences of EMU, or what some have termed a struggle between “regulated capitalism” and the “neoliberal project” (Hooghe and Marks 1999), the propositions articulated by Lafontaine and Schröder in Germany, Jospin and Strauss-Kahn in France, and Delors (behind the scenes) are the products of a much wider experience in consultation and development of common positions, even if there is some variation in detail owing to national circumstances, especially political. I describe in fuller detail in this chapter the antecedents to Dyson’s presentation. PES activities over the course of the midto late 1990s aimed at the development of a common social

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democratic input into the political-economic orientation of the EU, motivated certainly by what Dyson characterizes as a shared “underlying sense that the big problem for economic stability was not just governments but also the markets and specifically the financial system” (p. 202). In light of this activity, the pronouncements of the French and German social democratic governments in 1998 and 1999 should have come as no surprise. T he PES at W o rk Several general points must be made at the outset concerning the role and activities of key individuals involved in the development of a PES position and potential influence. First of all, in the various forums that operate under the auspices of the PES, from its own bureau meetings to the party leaders’ summits, representatives from all social democratic parties participate. Consequently, especially in the party leaders’ gatherings, which I have mentioned have been further institutionalized and deepened by involving personal representatives in more intensive preparation, government and opposition figures are brought together in the pursuit of a commonly agreed endeavor. Both Jospin and Lafontaine became party leaders of their respective parties in 1995. Delors completed his term as commission president in 1995 and, although creating “Notre Europe,” remained active in PES activities, as I will demonstrate. French PS and German SPD bilateral relations precede these facts, as the Friedrich Ebert Foundation and its French counterpart, the Fondation Jean Jaurès, have at least since the 1970s been active in cosponsoring seminars. The formalizing of PES ECOFIN meetings, with a prepared agenda and including representatives from parties in the opposition, demonstrates that at least at the level of opportunities to interact and discuss views, the PES has presided over an increasingly dense web of cooperative and collaborative work by key individuals in all EU social democratic parties. The PES activity program for 1995/1996 was adopted at the PES 1995 Barcelona Congress. It was reiterated that the PES “should be further developed into an organisation within which its member parties define their common EU policy in close cooperation with Socialist and Social Democratic members of the European Institutions” (PES 1995–1996, p. 1). To this end,

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among other priorities, the 1996 intergovernmental conference and employment policy were two of the most prominent. A working party on the 1996 IGC was set up in January 1995 consisting of personal representatives of the PES party leaders, who by definition had access to party leaders in addition to the PES group and social democratic members of the commission and council. Regarding employment policy, the Barcelona Congress had accepted the Larsson Report on employment, known as the PES European Employment Initiative (see Johansson 1999 for background). The congress also adopted the Auken Report on Environment, Employment, and Welfare (Auken was Danish minister for the environment). The activity program called for the integration of these two reports, and at the same time Delors was asked to participate in writing in reaction to the proposals. In the eventual Auken-Larsson report, “A Fair Deal—for Employment, the Environment and Equality,” completed by the summer of 1995, one can see elements that become incorporated in the Amsterdam Treaty. The report emphasizes four central elements for a new development model: “(1) the need for a new structural approach to the labour market; (2) the need for a new European macroeconomic approach; (3) the need for a new investment strategy for sustainable development; and (4) the need for a new strategy for equality between men and women” (p. 7). The PES group had also produced a document on the IGC for an extraordinary meeting of the group in February 1995. This report, entitled “Reflection Document, by Elizabeth Guigou, Following Dicussions in the Working Group on the 1996 Intergovernmental Conference” (PES 1995g, p. 9), had as its first section a focus on economic and social policy. It asserted, inter alia, that “economic and monetary union must seek greater balance between the economic and social objectives on the one hand, and the existence of the single currency on the other.” Further, to establish such a balance, “It seems to us to be indispensable for the Council and the Commission to govern the economic and social side effectively in order to balance the monetary power of the Central Bank” (p. 10, emphasis in original). It is “also necessary to harmonise indirect taxation and withholding taxes on savings in order to avoid major distortions between Member States and to discourage monetary and financial speculation” (p. 10, emphasis in original). Guigou, who had been until 1993 the

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French minister for European affairs, became an MEP in the 1994 EP elections, and became one of two MEPs (representing the Socialist Group) to sit on the Reflection Group, which drafted the IGC agenda. In this report and another devoted to economic and social policy, “La politique économique et sociale dans le Traité, en particulier en matière d’emploi,” Guigou stresses the importance of explicitly linking to article 2 (which calls for a high level of employment and social protection) article 103, which specifies that the member states consider their common economic policies as a question of common interest and coordinate them within the council, conforming to article 102a. Emphasis is also given to article 105 (1), which specifies that the ECB “shall support the general economic policies in the Community with a view to contributing to the achievement of the objectives of the Community as laid down in Article 2.” The pace of PES networking on employment and other economic issues quickened in light of the looming 1996 IGC. At the PES party leaders’ meeting in Valbonne in June 1995, the Austrian chancellor Franz Vranitzky (SPÖe) was asked to prepare a report on EMU and employment, which was delivered at the December 1995 Madrid party leaders’ meeting and further discussed at a conclave in March 1996 in Lisbon. Entitled “On the Social Compatibility of the Economic and Monetary Union,” Vranitzky suggests that the “strict implementation of the Monetary Union according to the Treaty, bare of collateral policies, would probably see, in the beginning, increased unemployment and adverse effects on growth, and later restrict the margin of action for an economic policy to counterbalance critical economic developments. This is why the necessary creation of the Monetary Union requires a number of collateral measures” (PES 1995h, p. 3). The main points called for include the following: • Creating an Employment Union—“as suggested by Allan Larsson” • Although the convergence criteria are not to be questioned, “an interpretation of the criteria that is true to the Treaty should allow for a generous handling of the debt criterium, [which] should focus more on the structure of the deficit in order to preserve a margin of counter-action in exceptional economic situations” (p. 4)

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• Balancing of regional shocks to the Monetary Union through “a stability reserve or the creation of Euro-bonds as a financial instrument” (p. 4) • Integrating the ECB into an overall economic concept • More intensive cooperation between the ECOFIN Council and the Council of the Ministers of Social Affairs During the Irish presidency of the first half of 1996, Irish Labour Party leader Dick Spring (then Irish deputy prime minister and foreign minister) and finance minister Ruari Quinn (who assumed party leadership in 1997) organized a PES meeting of finance spokespeople in March to discuss a paper drafted by Quinn entitled “EMU, Social Cohesion and Employment” (PES 1996a). The paper proposed some additional measures in the context of EMU in order to achieve a low unemployment objective. The following is a summary of the paper’s recommendations: 1. An Employment Chapter in the treaty 2. A new-incomes policy chapter in the Social Chapter 3. A Stabilization Fund to alleviate major asymmetric shocks in individual member states in the EMU 4. A modified Stability Pact proposal with nominal GDP criterion “to revert to Maastricht Treaty criteria when there is a major slowdown in the EU economy and where some participating states are experiencing very low nominal GDP growth” 5. Implementation of Essen summit (December 1994) conclusions regarding the reduction of indirect labor costs and reducing working time to improve “employmentintensity of economic growth” 6. Implementation of Union bonds as in 1993 white paper on growth and competitiveness (the Delors paper) 7. More democratic accountability by having the ECB president and the executive board (as a group) approved by the EP or an appropriate committee of the EP Jacques Delors’s involvement in PES activities has never been a secret, as he has attended PES congresses all along. His most explicit contribution toward the PES development of common positions for member parties came with his contribution at

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the 1997 PES congress held in June 1997 at Malmö, Sweden. In a report entitled “Towards a New Model of Development,” Delors argued the case for a transition from the “growth of the ‘golden sixties’ to a more harmonious model of sustainable development” (Delors 1997, p. 2), emphasizing, among other points, the need for renewed growth based on an increase in the productive capacity of the Community economy; a high and sustained growth rate characterized by a “suitable balance between investment (increasing productive capacity and growth potential) and consumption (supporting end-user demand)” (p. 5); growth for job creation based on a reorganization of working hours and methods; and a widening of the wage/cost distribution pattern by cutting wage costs at the lower end without reducing workers’ net income. In addition, he argued for a framework for stimulus using EMU, balanced by an Employment Chapter in the treaty to ensure that, in the process of policy coordination, “the objective of full employment is genuinely taken into account at all stages of application of Article 103 of the Treaty” (p. 8), and sustainable growth incorporating new dimensions of development, such as environmental protection, time management, women in employment, and new information technologies. He further advocated control of the instruments through an adaptation of forms of production (e.g., an ecotax on carbon dioxide emissions), promoting technological research into processes economical of natural resources, and so on. Finally, he supported the encouragement of lifelong learning and the creation of a third sector of activity—for example, neighborhood services—similar to that promoted by the French Socialist labor and social affairs minister Aubry. In his conclusion, Delors notes in reference to his 1993 white paper, that the measures proposed at Community level . . . have been applied only scantily. This shortfall points up the lack of will to unite our forces and coordinate our efforts. The gap must be filled by the full implementation of all the provisions relating to economic and monetary union. This has to be said again and again. The Party of European Socialists must fight for the full application of the Treaties, and must propose a new model of development, as the only means by which we can meet the challenges of the future and ensure equality of opportunity for all men and women of Europe. (p. 18)

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The fruit of PES ECOFIN activities, that is, a common position regarding a social democratic economic framework for the EU developed under the auspices of PES finance ministers and spokespersons for finance from the member parties, was “The New European Way: Economic Reform in the Framework of EMU, A Paper by the PES EcoFin Group,” dated October 1998 (PES 1998b). The paper was the product of a discussion initiated on a common draft position on “Economic Reform in the Framework of EMU” under the British presidency in February 1998. In July 1998 the Austrian presidency took over the followup discussion, with the PES ECOFIN group meeting three times to discuss the subject. On October 12, 1998, the PES ECOFIN group adopted the text, with Gordon Brown (British chancellor of the exchequer), Dominique Strauss-Kahn (French finance, economics and industry minister), and Oskar Lafontaine (German finance minister–designate), among others, signing the text. Characterized as the “first attempt at a common definition of a Left economic policy in Europe” (“Les ministres” 1998, p. 3), the paper focuses on four areas. The first, globalization (“Work with change, not against it”), calls for a reform of the international financial system in order to increase transparency, improved multilateral surveillance of national policies, monetary cooperation between the major currency blocs, and improved governance of international financial institutions. The second calls for economic policies that emphasize cooperation and coordination with the EMU, for example, the coordination of budgetary policies and economic policies to achieve sustainable growth and full employment “in accordance with the single monetary policy”; the coordination of economic and structural policies in order to promote fair rules for competition; cooperation between countries in EMU and EU member states outside; and accountability and transparency for the European Central Bank, in particular a role for the EP. The third measure, a new social contract, emphasizes education and training, including lifelong learning, active labor-market policies, and the use of employment guidelines to reduce structural unemployment: “We will be sharing best practice at ECOFIN and in the Social Affairs Council and the European Council through discussion of the Employment Action Plans, which Member States have prepared” (p. 6). The fourth measure links Europe and economic reform,

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stressing the encouragement of SMEs; capital and product market reform through a reduction of fiscal, administrative, economic, and cultural barriers; public investment; and tax policy coordination to control the distortion in economic decisions with regard to labor, capital, and services. Overall, the paper stresses the absolute need for greater cooperation and coordination at the supranational level and between national capitals and the EU, and innovation in regard to financial policy at the EU level. The most recent declaration of common thinking on a social democratic economic approach was adopted at the March 1999 PES congress in Milan. “A European Employment Pact— For a New European Way” (PES 1999d) calls for a new mix of monetary, wage, fiscal, and tax policy in order to achieve a “new trajectory of growth and employment with social inclusion in Europe” (p. 2). In an interview with the Financial Times (“Milan” 1999), Guterres asserted that the report represented something new: “If you look at macro-economic policy in its two dimensions of short-term demand management and longer-term structural reform, we never had any effective co-ordination except to create the conditions for the euro by reducing budget deficits and inflation. The new policy is to answer the question: is there any room for co-ordination of economic policies to allow for more growth and employment?” The European strategy for growth and employment is based on three objectives: managing sustainable growth, improving the potential for innovation and growth, and strengthening an active and inclusive society. Coordination is the key concept in managing sustainable growth. Here the new policy mix is detailed, and defined as “an appropriate policy mix between the unified monetary policy, the 15 national budget positions and the multitude of wage and income development in Europe” (p. 6). National budgetary discipline combined with European-level initiatives are components of the new policy mix, as EU action can complement national efforts at investment. For example, “the Community budget for structural and internal policies should be complemented by the European Investment Bank and by the European Investment Fund, and by diversified public-private partnerships. . . . The role and the viability of eurobonds should be seriously considered by European institutions, taking also into account the cost-

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benefit for future generations” (pp. 7–8). In the end, the Guterres report reflects a mix of demand management measures, of which the European level has a role to play, with lessons of the 1980s and 1990s regarding national budgetary control. In national political contexts, the activities of the PES, as well as initiatives by key political actors—individual and parties—reinforce each other. In its report on Labour’s position in preparation for the 1996 IGC, adopted at Labour’s 1995 Conference on Europe, explicit support is given to a coordinated approach at the European level. Not only does it restate support for the Delors 1993 white paper, it mentions the Swedish government submission to the IGC Reflection Group regarding the inclusion of an employment priority in the treaty (essentially, the Larsson Report recommendation). Many elements proposed as part of a “European-wide strategy for co-ordinated action on unemployment” reflect ideas circulating through the PES network. There is a call for “closer co-ordination of economic policies between member states to promote investment, create jobs and boost growth; the establishment of a European Recovery Fund to utilise the credit rating of EU institutions to raise finance for infrastructure and training projects; the development of TransEuropean Networks; and a more effective distribution of the European budget towards industry, training, research and development.” It also calls for a “Europe that is capable of achieving balanced growth and better distribution of the wealth created in this vast single market. That requires the co-ordination of the economic and social policies of member states” (Labour Party 1995, pp. 3–4). Many of the ideas espoused by the French government of Prime Minister Jospin had been articulated even before its election in May–June 1997. In February of that year, at a conference in Brussels, Strauss-Kahn presented a detailed definition, or redefinition, of socialism for the twenty-first century in which attention is brought to the political economy of Europe. Defending the notion that the state has an important role to play despite globalization and liberalization, Strauss-Kahn stressed that the quality of macroeconomic policies matters, and that it is now more than ever necessary to promote serious attention to the coordination of economic policies, whether this happens in the ECB or the Euro-11 council. New notions of regulation, but also conditions for more capital risk taking, are detailed, investment in public

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services is defended as an infrastructural support for competition, full employment is understood in an altered context incorporating retraining and lifelong learning, and so on (StraussKahn 1998). All of these initiatives, and the intensive transnational collaboration under which they were mobilized—among party leaders and their associates in government as well as in opposition—present evidence that the “turning point” in the EU’s agenda manifested at Pörtschach was the result of this activity. If so, the PES network has been indispensable for lowering transaction costs for individual parties for whom ongoing coordination with fourteen other parties would be nearly impossible on a unilateral basis. Conclusion The elections of the British Labour Party and French Socialist Party in mid-1997, and the German SPD in September 1998, gave a new impetus to the drive to develop a truly European social democratic influence in the EU agenda. In the history of the EU, this lineup of major member states had never occurred. As former French prime minister Michel Rocard characterized it: “Europe, up to now, has always . . . been dominated by the right. Certainly, a number of national governments have been, at one moment or the other . . . led by the left. But this never attained a sufficient force in order to impose its priorities. When left governments were numerous, they lacked power, for want of a sufficient number of the major European countries, and when the left had power, it lacked numbers: when France, Germany, Italy, Great Britain had leaders from the left, chance rendered them isolated” (Rocard 1997, pp. 1, 17). The fact that these parties are now in government throughout the EU, and especially in the major countries, does not itself translate into a common policy agenda. After all, these parties range across the left political spectrum, from Blair’s New Labour to Schröder’s Neue Mitte, from Jospin’s “realism of the left” to D’Alema’s reformed communists. One could be forgiven for expecting these and more parties to develop clear and common policies. However, although welcomed by left-wing activists and voters, the election of these parties to national government by itself does

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not automatically lead to a shift in the EU agenda. For this to occur, as I have attempted to demonstrate, intensive prior cooperation and collaboration at the highest levels of all the parties, major and minor, would have to take place. Still, even the political weight of these parties, at the very least espousing a common policy focus, may engender shifts in EU priorities in an indirect manner. A report in the Financial Times stated that the European Investment Bank (EIB) “is shifting the emphasis of its strategy from the funding of infrastructure projects to investment in schemes designed to reduce unemployment, a response to changes in the political climate across Europe.” The EIB’s president, Sir Brian Unwin, was quoted as saying, “This kind of investment is vital for growth and jobs. The election of the French Socialist government last summer and the creation of the new employment chapter in the European Union’s Amsterdam treaty stimulated this” (“EIB” 1998). Furthermore, common policies do not mean a single policy, for in the end these are national parties whose reelection depends upon convincing voters of their credentials in bringing promised change to domestic affairs. The transfer of competences to Brussels, even though it may command an intellectual and logical justification, and whether it be a new policy or an alteration to a decisionmaking procedure (as in expanding qualified majority voting into more policy areas), conflicts with the desire to remain in command at the national level of as many tools for action—a matter of political efficacy and relevance—as possible. Thus political parties, including social democratic, are rigorous in their support of subsidiarity. A European policy perspective, then, operates as a complement to national efforts, not a transfer to the European level of any one national model writ large. In the case of the employment issue, one should evaluate the activities of the PES in this context. “Success” may be granted given the fact that employment has now been given prominence in the treaty and in the explicit orientation of the EU institutions, including the supranational commission. Success may also be granted in the efforts at coordination of macroeconomic policies, or at least the very placement of this strategy in serious debate among the executives of the member states. Thus success is demonstrated less in actual policies, hard and specific, than in changing the terms of

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debate and challenging the predominant neoliberal orientation of the EU agenda. In the case of employment, the June 1999 Cologne summit adopted a “European Pact for Employment” that did not satisfy the more maximalist demands of Jospin, or the ideas initially articulated by Lafontaine while briefly German finance minister. To say, though, that what was produced was the “social liberalism” of Blair, following the “Blairite” Amsterdam Treaty (Pollack 1998), misses the point of intraparty family bargaining, that is, that the parties are national actors in their organizational relational logic. Employment is a singularly national issue when one considers the basis of national government legitimacy, that is, a performance legitimacy (Beetham and Lord 1998). According to Jean-Claude Barbier of the Centre for the Study of Employment in Paris, three reasons explain why a strong and vigorous European-level employment policy, despite the number of social democratic governments in the EU at present, will probably not materialize any time soon. First, “no government would wish to relinquish its national policy in the fight against unemployment, the sole area in which it can argue its legitimacy” (“La lutte” 1998, sec. 2, p. 2). The fact that structural and social policies remain in the domain of each member state attests to this fact. Second, the absence of a true European labor market means that national policies of social protection continue to differ, thus presenting an obstacle to the mobility of labor. Third, it is a fact that social democratic parties, based on their national specificities, including political history and inherited socioeconomic conditions and traditions of state activism, vary from the emphasis on supply-side measures of Blair to the legislated thirty-five-hour work week of Jospin. “In these conditions, if one were to reason in terms of an obligatory common framework, any harmonisation could only be made at the minimum level,” suggests Barbier (“La lutte” 1998, sec. 2, p. 2). Realistic expectations must be integrated into what any transnational network, made up of national actors, can be expected to accomplish. The PES party network in itself cannot redefine national traditions and circumstances, but it has allowed these national perspectives to expand their horizons as the European dimension impinges ever more intrusively into their domestic situations. As a party family for whom employment has been an issue intimately

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woven into its identity, the desire to make this issue a top priority at the European level is not remarkable. The issue itself, because it is a shared component in their party identities, allows at the minimum a discussion to take place in which incentives to act are apparent. This is not the case, for example, in defense matters, and consequently it is not surprising that a Common Foreign and Security Policy (CFSP) has remained solely a national rather than a partisan issue. The launch of the euro, and the drive to meet the convergence criteria, itself made economic policy coordination inevitable to even the most laissezfaire of social democratic parties. Finally, again invoking the party family factor, one must add “the instinctive sympathy of the left for greater policy co-ordination” (“Social Democrats” 1998, p. 2). The instruments to turn policy coordination into reality, apart from hoping for a social democratic hegemony across all EU national capitals and a subsequent willingness to cooperate transnationally, means turning to the EU in a pragmatic fashion. Thus the PES has been a mechanism for the conversion of social democratic parties toward viewing the EU as a help, rather than a hindrance, to their own national policy activities.

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The quotes by Hollande and Andreotti that opened this book certainly reflect partisan views regarding the impact of a single and cohesive party family occupying a large majority of EU member-state governments. Each, in his own way, expresses hopes or fears that national parties belonging to the same party family will be able to translate a coherent European-level program into an altered EU policy agenda. In other words, if social democratic governments are able to translate their ideas into concrete common policies regarding the agenda of the EU, then a political monopoly could possibly result. Whether social democratic ideas dominate Europe today by virtue of the election of so many social democratic governments may be open to question, as the reasons for their election are primarily dependent upon national-specific factors, ranging from new alliance strategies with liberal, ecologist, and postcommunist parties, to retrospective voting on conservative government performance. On the other hand, a political monopoly suggests prior agreement over certain issues, and coordinated measures to insure their acquisition and maintenance. What this study of the development of the PES has attempted to demonstrate is movement in a direction that could substantiate these comments at some point in the future, although in a manner less readily identifiable than one would expect. In this concluding chapter, I assess what the PES experience to date represents about party adaptation to the EU and the evolution of European social democracy. 131

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Organizational Adaptation and Innovation A fundamental premise of this work is that national party leaderships constructed the PES as a means to facilitate and magnify national party influence at the European level. I have not argued that the PES is an embryonic European political party, which has as one of its primary functions the linkage of electorates to a European government. This view, however, has been the dominant assumption when transnational parties, and even European Parliament party groups, are considered outside their immediate institutional environment. In most studies, the role and future prospects for EP party groups and transnational party federations have revolved around an assumption that the destination of their developmental trajectory is a reproduction of national party functions at the European level. The following comment by Hix and Lord (1997) is typical of this view: The empirical reality . . . is that the EU has made some progress towards a “Europe of parties.” However, the position of European-level parties is still extremely weak in comparison to parties in most democratic systems. . . . European-level parties are weakest of all in comparison to classic political parties on the most vital criteria of all: the question of electoral legitimacy. Without electoral legitimacy, there is little possibility for European parties to control the individuals holding positions of authority in the EU system and for policy competition between the parties to be translated sub sequently into EU action. (p. 213)

The contention of this work is that rather than promote an organization that could possibly influence or interfere in the basis of domestic political competition, national party leaders have been careful to construct an entity that serves their interests domestically by focusing its attention at the supranational level. Yet the issue of legitimacy raised by Hix and Lord is valid, and two aspects of the problem stand out. First, the complexity of the EU policymaking process makes it difficult to trace backward the individuals or groups responsible for a policy directive or regulation. Therefore, holding any one institution or actor accountable for policy failure is nearly impossible. The lack of a recognizably authoritative center—or executive government— at the EU level renders mobilization for or against EU policies

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disjointed, and often directed at national governments. Apathy and declining turnout at European Parliament elections is therefore not surprising. Second, the lack of a readily understandable basis, or axis of competition, with which to interpret EU politics, such as left-versus-right in domestic politics, accentuates the technocratic characteristics of the EU, and thus further removes the EU from public understanding of its mission. In light of these considerations, the activities of the PES certainly do not plug the gap between national electorates and EU institutions. However, bearing in mind the reasons and orientation imparted to it, the PES was never designed to fulfill this role. What others have described as its weakness—the control by national party leaders over the agenda and activities of the transnational party and, to a more limited degree, EP parliamentary groups—is actually the strength and legitimacy of the PES. Why is this so? First, party leaders and prime ministers have over the course of the late 1980s and 1990s ceded increased authority and competences to the EU, with monetary union being the most significant in terms of contesting traditional notions of national sovereignty. Yet, for whatever reason this process has been engaged, from either an institutionalist or an intergovernmentalist theoretical perspective, the satisfaction of interests was primary, the results of which have intended and unintended consequences on national bases of legitimacy. Although the multilevel governance model emphasizes the degree to which national executives have become embedded in a broader regime in which power is dispersed, such that other actors’ agendas—from interest groups to EU institutions—compete with theirs, this does not mean that a desire to control uncertain and unpredictable environments has dissipated. Thus, from a subgroup of national executives—social democrats— comes the formation of another aid in pushing national preferences, here defined by a strong partisan element. The PES then shares in the logic of EU institution building, which implies a calculated sacrifice of autonomy. In the case of the PES, the strengthened rules regarding the use of qualified majority voting in its decisionmaking reflects this similarity. Second, the PES assists, due to its explicit partisan identity, toward an enhancement of national party efficacy. If one accepts the argument in Chapter 2 concerning the effect of European integration upon national party relevance, then the PES

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represents an effort to reclaim relevance through the coordination of activities among a collective partisan group, the party family, a transnationally identifiable set of actors for most voters. Although explicit and direct change in domestic affairs has not been a factor in the short lifetime of the PES, the measures aimed at unemployment have been used by party leaders/prime ministers for domestic consumption. Through the connection made by party leaders to the EU policy output, or at least the revised policy agenda, national electorates may come to see the EU as simply another arena, certainly on a qualitatively extended or removed basis, of domestic politics. In other words, EU legitimacy may be affected by the activities of national actors employing the EU as another level for competitive politics, although in this case nonelectoral. The EU becomes identifiable as a “plane of contestation” (Banchoff and Smith 1999). Still, with the term “Party” in its title, the PES, and for that matter the EPP, continue to be viewed conventionally as protoEuroparties, that is, they will assume their proper function only when the EU has been constitutionally reengineered to exhibit more straightforward parliamentary dynamics. But the integration process has created more and more complex relationships and interactions (multilevel governance), and the PES, through its agenda as selected by national party leaders and its activity based clearly on partisan lines, does help to transfer the national socioeconomic issue basis to EU politics. Even though this is not a legitimizing process or procedure as traditionally defined (it lacks the competitive electoral basis), it is nevertheless a type of legitimation. This “tendency for an expanding range of actors to articulate and pursue their preferences at the European level will further signify the growing legitimation of an evolving polity” (Smith 1999a, p. 42). Expectations of the behavior and role of transnational parties, extrapolated from national parties and understood to focus on electoral activities and parliamentary support for an executive (i.e., party government), deflect attention away from the innovative function of the PES. This function is to facilitate the adjustment of social democratic parties in the process of Europeanization. Even further, since a partisan or party family dimension is present, one can say that the PES has been constructed and developed over the course of the 1990s in order to establish collective political agency heretofore lacking at the

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European level. In my definition of “Europeanization” in Chapter 4, I discussed the internalization of EU inputs into domestic actors’ routine political strategies and perspectives, and added that this did not determine how actors’ behavior would be modified, how and if policy goals would change, and so on. Europeanization, in other words, “involves the evolution of new layers of politics which interact with older ones in ways to be examined. The exact patterns of interaction are not specified as part of the definition but are instead kept as ‘free parameters’ to be examined empirically” (Cowles, Caporaso, and Risse forthcoming). Employing the PES as an instrument through which coordinated activities may influence the EU agenda, social democratic parties are able to confront (or at least to be seen to be making the effort, which itself may have a symbolic attraction) the challenge to their relevance and programmatic aspirations, even if this means revising them in light of Europeanization. Unable as individual parties acting unilaterally to produce positive change/integration (Scharpf 1995), the PES organizes social democratic party efforts at the EU level such that Europeanization becomes a two-way process, in which EU factors internalized into domestic actor strategies create new possibilities for goal attainment, with one response being coordinated efforts to control EU sources of decision- and policymaking, the process of which transforms both national and supranational dynamics. This characterization of the interaction between coordinated social democratic parties and EU policymaking is hinted at by Olsen’s definition of Europeanization: “institutions and actors at the European level influence as well as adapt to institutions and actors at the national level, who at the same time influence and adapt to institutions and actors at the European level” (1995, p. 4). This is then the innovative aspect of the PES, and for the foreseeable future, its prime task. At the same time, although the PES cannot be said to be a completely autonomous agent, constituted as it is by national parties, the activities of its working groups, especially as they are increasingly staffed by senior political figures, and the coordination occurring in PES ECOFIN meetings do suggest that a transnational level of participation, separate from the national arenas and formally charged with a European-level focus, has become institutionalized. Through references to its role in recent party programs and national media—in particular (and interestingly) at crucial

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moments of EU summits and Council of Minister meetings, rather than at EP elections—the PES has become a self-constituted space within the EU multilevel system, demonstrating the dynamics that redefine traditional notions of autonomy, agency, and spatial boundaries. If PES success is measured by (1) the development and coordination of various national party positions into a common policy/activity program, and (2) its influence in altering the EU issue agenda to a perceptible degree, at least three implications for the evolution of EU politics must be considered. First, agenda setting at the margins will be the norm, rather than the possibility of clear shifts in policy agendas as is the case following alternance of parties in government in majoritarian political systems. The nature of the interinstitutional relationship among EU institutions, incorporating territorial interests of member states, supranational interests represented by the European Parliament, and individual and coordinated interests promoted through lobbying, all combine to limit the exertions of even a large majority of similarly partisan governments. The complexity and fragmentation inherent in EU policymaking, already touched on in the discussion of multilevel governance, represents an additional constraint, suggesting that the range of agreed goals to be mobilized by a party network will remain few. This being said, this book can claim to have demonstrated that the PES has made a difference in the evolution of high EU policy agenda issues. The very complexity and fragmentation just described makes it quite unlikely that an international organization of fifteen member states would have been able to prioritize a single issue—employment—that (1) was not of a high or pressing security relevance, and (2) explicitly linked a central domestic policy responsibility—one that very often can make or break a government before elections—to the intrusion of a supranational actor. Several years of coordinated policy development and public commitments on the part of party leaders— becoming an overwhelming majority of EU prime ministers by the time of the Amsterdam Treaty—explains the prominence given to employment in the treaties and, furthermore, to the majority of national executive positions that can only be described as maximalist in this debate, both at Amsterdam and Luxembourg. Left to strictly intergovernmental links and negotiations, it would have been virtually impossible to envision the

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widespread support for some level of supranational responsibility in this policy sector. Rather, because PES membership is based upon partisan organizations—which may at any one time occupy national executive office—links and prior negotiation with partner parties include current and future national executives. This reduces the time required for a new government to come up to speed regarding any ongoing intergovernmental negotiations. The election in the first half of 1997 of the British Labour Party and French Socialist Party did not precipitate any sudden disarray in positions pretty much agreed on by the time of the Amsterdam summit midyear, for both of these parties had been involved in the development of the employment issue in the IGC all along (this of course did not preclude the French prime minister from insisting upon his party’s maximalist demands for domestic consumption). The absence of the PES and activities described in this book would surely have meant, at most, simple declarations at EU summits leading to Amsterdam of the need to attend to the problem of unemployment, that is, purely cosmetic gestures. Second, national or state preference formation, as a prelude to intergovernmental bargaining, must now be seen to be an even more porous or penetrated process. Activities by organizations such as the PES mean that governing parties may be participants in coordinated activities that blur the distinction between national and partisan preferences. This is not to say that political parties have not been associated, along with other domestic actors, with the study of national preference formation. However, the analysis of domestic actor inputs into state preference formation has traditionally sealed off the linkages of parties to similar organizations in other countries. Transnational relationships, be they bilateral (the Franco-German tandem) or multilateral (the European Round Table of Industrialists) of course exist and have been mapped out by various students of the integration process, but the extranational network of parties, consisting of nonelectoral activities, has not been a focus in this area. Networks, too, have been given attention, but again, notably because of the general a priori approach to transnational party federations, the PES and EPP have not been conceptualized as active representatives of network mobilization. However, the combination of pressures on social democratic programmatic identity and the intensification of the European

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integration process since the late 1980s represents the conditions under which a new form of network can emerge, and has emerged. According to Richardson, “it may be that at any given time several types of policy networks (in the generic sense) are in operation. If so, we need to analyse the interrelationships (if any) between these and the conditions under which they emerge” (1996, p. 9). A party network such as the PES represents a new type of policy network, but one in which—at any time—some members occupy the national executive that itself is mediating between supranational and its own domestic interest groups. Intergovernmental bargaining, then, necessarily takes on a different complexion, at least concerning those issues on which the party network has devoted or invested its primary efforts. This interpretation supports Marks’s contention regarding actor-centered perspectives to multilevel governance, in which intergovernmental negotiations “are negotiations among actors representing states rather than negotiations among states. The actors involved may have some more or less definite interpretation of ‘national interest,’ but, in a liberal democracy, they never cease to be politicians who operate in electoral, party-political, and interest group arenas. The concepts of ‘national interest’ or ‘state interest’ are abstractions which refer not to any objective reality, but to subjective, contestable, interpretations on the part of particular political actors” (1996, p. 25). Third, and this will be developed further in the next section, expectations for social democracy at the EU level must be realistically driven in light of the preceding comments, and should therefore be viewed distinct from expectations and possibilities at the national level, which may yet contain the potential for more thorough assertions of social democratic choices (Garrett 1998). This implies that the EU level, although representing another arena for contesting policies and agendas, is appropriate for only certain types of competitive activities. In this manner, federalist and decentralized national regimes give us a clue as to how far competitive politics may be organized at the supranational level. Essentially, without having to adopt a highly deterministic institutionalist stance, institutions do structure the broad outlines of actor strategies. Just as different coalition possibilities among parties are conceivable at local levels when they may be impossible at the national level, so too are

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different rules and institutional prerogatives important configuring factors for EU-level politics. As for the potential of Europeanized social democratic dynamics becoming inscribed at the European level—or, put another way, of the left-right cleavage to structure more explicitly the nature of political competition at the European level—possibilities are constrained by what is institutionally possible. The remark by the former leader of the Socialist Group in the EP, Jean-Pierre Cot, regarding the necessity of qualified majorities for institutional reform (a PES-EPP alliance), is a perfect indicator of how the shape of the EU political system presents constraints as well as opportunities. In the end, agreement on a limited number of issues, further development of European-level policies, a select number of national governments occupied by social democratic parties, and continuous and ongoing interaction of party elites through PES initiatives can at best politicize the EU policy agenda and, as a consequence, promote social democratic interests within the multilevel governance structure. The Evolution of European Social Democracy In his 1988 analysis Socialist Parties and European Integration: A Comparative History, Featherstone cites Ignazio Silone’s comment that, “There is nothing the Socialists nationalise as quickly as socialism” (p. 14). Featherstone’s analysis of the positions of socialist parties on the issue of European integration demonstrate just how varied they were, ranging from the almost nationalist British Labour Party to the Belgian Socialist Party’s commitment to supranationalism. Featherstone suggests that the “disparate response of European socialist parties to issues of integration has been paralleled by a confused debate over the relationship between socialism and supranationalism” (p. 339). In this debate, many of the antisupranationalists argued that socialist goals could be attained only by a national effort. In this perspective, supranational structures could prevent or constrain socialist initiatives. These views could have an effective following only if based on a shared assumption of strong national state autonomy. Since Featherstone published his work in the wake of the ratification of the Single European Act, abundant, if complex, evidence of the attenuation of state autonomy has been

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established. Featherstone surmised that, “In the past, European Socialists debated the issue of membership in a supranational entity like the EC; in their future considerations of their strategy, it is essential that they are conscious of the need for supranational and international action to overcome the shortcomings of the individual nation-states” (p. 347). It would seem that the creation and further development of the PES in the 1990s demonstrate the recognition by all social democratic party leaderships of national state limits, though not necessarily of political agency. Featherstone also concluded that evidence of “various policy influences clearly points to the importance of the individual national contexts for the policy adopted towards supranational integration by Western European socialist parties. The extent to which there have been influences independent of a particular national situation is very limited. In that sense, socialist parties in Western Europe have pursued a national response to the integration process” (p. 333). I have argued that national responses continue to explain the orientation of party leaders toward European integration. However, what has changed in a fundamental sense is the pronounced external influence of single market and monetary union factors on the strategic thinking of national politicians. The nationalist rhetoric has been reduced to a very limited number of factions within parties; no party leadership argues against membership in the EU. Opposition to party leadership positions from within or outside certain social democratic parties is manifested less in support of withdrawal from the EU than it is either in a brake on further integration (ranging from Swedish opposition to joining EMU to British consolidation of recent measures), or in major institutional and policy reform (ranging from constitutionalizing the treaties with a bill of rights to emphasizing a vastly expanded European-level social welfare system). In other words, debates have shifted from whether there ought to be European government, to what kind of European governance there should be. The impact since the late 1980s of the relaunched integration process explains the commonality of national responses, and the PES has been useful in coordinating what could have been a dozen or more disparate calls for redirecting the priorities of the EU. Again, this does not mean that there does not exist a spectrum of views concerning the degree to

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which European governance is proper in some cases, and in this sense Featherstone’s finding that national situations are crucial in determining social democratic party positions remains valid. Examples of national variation range from the reluctance by Danish party leader Rasmussen to see the PES engage in ambitious organization building to the promotion of a higher profile of the PES by the French Socialist Party at the time of their 1997 party congress at Brest: Social democratic parties represent electorally the leading political force in Europe. They can operate more efficiently than has been the case, and one way of doing so . . . would be to give activists in all European countries a PES membership card. Our national congresses would associate members from other parties. The PES congress must give place to an effective preparatory debate in the federations. Common themes, such as employment and public services, can become the focus of conventions by all parties simultaneously. (Socialist Party 1997)

The common denominator across all parties is a recognition and support for serious reflection and controlled action at the European level by social democratic parties. The level of coordination and deepened involvement by social democratic party elites in PES activities demonstrates, at the very least, the outlines of the adaptive process of European supranationalism and social democracy. When speaking of national situations, one is essentially focusing on the Europeanization of social democratic parties, a process that has become fused with these parties’ individual attempts to redefine and impart a new élan to their social democratic identity and electoral attraction. To speak of the internalization of EU factors by the policies and strategies of party leaders is only part of the story, for the EU is an issue that cannot be contained at an elite level any longer. Consequently, it is no longer a question of whether the EU ought to be redefined as a domestic rather than a foreign policy issue, but how it is to be treated in party programs and in government policy. One can analyze how each individual party has wrestled with the EU issue, but the very nature of the EU in the 1990s, especially after the launch of EMU, obliged social democrats to come to terms with it, on a practical political level as well as on ideological grounds.

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The PES has been useful in creating the space, albeit on an elite level, to begin fashioning a social democratic discourse combining ideology and pragmatic factors (bearing in mind the continuing resonance of national situations). If solutions to particular problems necessitate coordinated action across national boundaries, how else can social democrats create a meaningful social democratic critique if not through some sort of cooperation? The historical record indicates how well individual countries enjoyed the luxury of a national focus. Social democrats fell under the sway of the power-fields of the nation-state until they could no longer think clearly beyond their confines. Given relatively closed economies, and the stable international order of the immediate postwar decades, they could construct domestic welfare states with more determination than otherwise might have been possible. The opening structures of international production, trade and finance, and the blossoming of non-economic forms of globalization, exposed the limitations of this understanding. (Butler 1995, p. 146)

Through the participation of party elites in continuous and focused initiatives linking select domestic issues to EU-level action, the PES creates the organizational setting in which supranational factors required for developing the European dimension of social democracy—that is, institutional and policy variables— positively confront various national-specific conditions. The role of the EU is bound up with the larger question of revitalizing social democracy. Telò has suggested several principal themes around which contemporary social democrats have been rethinking their program. They are: (1) an investigation of a “new compromise” between economic growth, environmental policies, and the desire to submit new technologies to political control; (2) dialogue with postindustrial and postmaterialist social movements; (3) a search for an economic and post-Keynesian employment policy “capable of including new approaches to the Welfare state” and a debate on the length of working time; (4) a will to go beyond regulatory policies based upon state intervention, and to proceed to a radical renewal of citizenship; and (5) a concern with the limits of national constraints to reformist policies and a corresponding openness to exploring a common European strategy effectively based on a supranational public authority (1999, pp. 126–127). According to Telò, the consequences

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of these programmatic changes “must not be under-estimated: social democratic parties are henceforth more concerned with the environment than parties of the Right, more sensitive to the theme of ‘gender,’ and, a new and singular fact, more European than their counterparts in the centre right” (p. 127). The exploration of these themes by social democrats as part of the effort to renew social democracy inevitably lead to an engagement with the issue of Europe. European integration may have problematized social democratic party relevance, that is, introduced new variables into parties’ environments, but adaptation and new channels of influence are not necessarily ruled out. Adapting to and thereby influencing and shaping parliamentary politics at the turn of the last century became one of the defining characteristics of social democracy. Similar adaptive dynamics to the EU level of policymaking may itself contribute toward defining European-level social democracy for the next century. Party leaders are subject to the vicissitudes of party democracy and electoral competition, thus placing certain constraints on their extranational activities. At the same time, the European Union in the latter 1990s represented an extraordinary picture of collective policy-making combined with autonomous domestic politics, of governments which have grown into each other and Parliaments which scarcely interrelate. National economic management has given way to European-level regulation; national monetary sovereignty is giving way to the [ECB]. . . . Governments have so far managed to share sovereignty without fully admitting to their domestic publics the extent to which this involves the loss of national autonomy. It is open to question how much further governments can move without the underlying contradictions becoming apparent. (Wallace 1999, p. 518)

Responsible party leaders have no choice in this new environment whether to ignore or embrace the issue of how to relate their domestic priorities to EU competences. How, then, can social democrats operationalize the European Union into an effective and advantageous agent for political change? How can they manage the EU in domestic politics—by definition a competitive venture for political parties—without being labeled by opponents as selling out the nation’s destiny? The “central paradox of the European political system in the 1990s is that

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governance is becoming increasingly a multi-level, intricately institutionalized activity, while representation, loyalty and identity remain stubbornly rooted in the traditional institutions of the nation state” (Wallace 1999, p. 521). The PES gives a first glimpse of how nationally rooted party leaders have attempted to link their domestic concerns with the opportunities potentially present at the European level. This process has meant finding the right balance between retaining national legitimacy and seizing opportunities through coordinated action at the European level. This reflects the continuing salience of domestic issues as well as the fact that the national level remains the primary source of legitimation. As Sassoon (1996) has observed: What was crucial in the construction of the European entity was that control of this pooled sovereignty remained in the hands of the executives of the nation-state. It was never ceded to a faceless civil service . . . or to a democratically elected and publically accountable parliament. Socialist parties are unlikely to work hard at eroding national prerogatives. They too derive their legitimacy from nationally based electorates. When in opposition, lack of power may lead them to support an extension of the powers of the European Parliament. But in office, the pressures may work the other way, towards preserving the prerogatives of their own nation-state. The close collaboration between the modern democratic nation-state and the parties of the Left has profoundly marked the experience of the last hundred years. These habits will not be easily discarded. Socialists, unavoidably, became “nationalist.” They responded to the aspirations of their “national” constituents. (p. 771)

Although the PES may at a later date be replaced with some other organizational nexus between national parties, especially if there is significant EU constitutional change, it provides at present the best evidence so far of tentative steps by social democrats to adapt to the challenge of European Union. The PES displays, in microcosm, the external forces pushing social democratic parties to engage realistically with the EU, while at the same time the internal or national factors cause them to hesitate with regard to a maximalist approach, that is, a federalist orientation. Bergounioux and Lazar (1997) have suggested that “one is still far from a single [social democratic] European

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party with a congress, elected delegates . . . but nothing formally prevents this occuring. There is only one step to cross. But if this has not yet been taken, it is due to the hesitation of different European socialist parties regarding the political nature of Europe. Most social democratic parties want a powerful Europe, in a Keynesian manner, but most do not want to give it the political, and, hence, institutional means” (pp. 30–31). What this book has demonstrated is that through the participation of social democratic party leaders, a new formula for constructively intertwining the national and European levels may be taking shape, thus overcoming the zero-sum argument regarding parties and the European Union.

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Index

Cot, Jean-Pierre, 104–105, 139 Council of Economic and Finance Ministers (ECOFIN), 13, 101–102, 119, 122, 124 CSPEC. See Confederation of Socialist Parties of the European Community

Agenda setting, 85 Amsterdam Treaty, 13, 45–46, 101; negotiation of, 9 Andreotti, Guilio, 1, 2, 131 Berès, Pervenche, 2 Blair, Tony, 15, 74, 118, 127, 129 Brown, Gordon, 92, 124 Butler, Anthony, 6, 41, 55, 71, 76, 142

D’Alema, Massimo, 127 Delors, Jacques, 47, 50, 54, 112, 117, 118, 119, 122–123 Democratic deficit, 35, 45–48 Democratici di Sinistra, 66, 73 Dutch Labour Party (PvdA), 65 Dyson, Kenneth, 111–112, 116–119

Cafruny, Alan, 48–49 Cerny, Philip, 27 Checkel, Jeffrey I., 61 Christian Democratic parties, 6, 12, 31, 54, 105, 106 Committee of Permanent Representatives (COREPER), 91 Competition Policy, 33 Confederation of Socialist Parties of the European Community (CSPEC), 4, 11, 93–95 Cook, Robin, 92 COREPER. See Committee of Permanent Representatives

ECB. See European Central Bank ECOFIN. See Council of Economic and Finance Ministers Economic and Monetary Union (EMU), 1, 8, 32, 45, 48, 50, 77, 115–116, 122, 124 161

162

INDEX

Economic management: national, 23; European, 25, 125–127 Edwards, Geoffrey, 12, 14, 91 EIB. See European Investment Bank Employment Chapter (Amsterdam Treaty), 1, 13 111–115, 122, 123 EMU. See Economic and Monetary Union EP. See European Parliament EPP. See European People’s Party ETUC. See European Trade Union Confederation European Central Bank (ECB), 75, 124 European Commission, 2, 30, 46–47, 85, 105 European Council, 2, 86–87, 93, 102 European Council of Ministers, 12, 14, 29–30, 45–46, 85, 89, 91–92, 102, 136 European Investment Bank (EIB), 128 Europeanization: definition, 60–61; of parties, 62, 70; and PES, 135, 141; of social democratic parties, 60–75 European Parliament (EP), 8, 14, 28, 30–31, 35, 45–46, 88–89, 93; parliamentary groups, 14, 28, 31, 84, 86, 104–106, 132–133, 139 European People’s Party (EPP), 8, 11–12, 14, 30, 62, 87, 105–106, 137, 139 European Trade Union Confederation (ETUC), 13, 112

Featherstone, Kevin, 64, 65, 139–141 Fuchs, Gérard, 103 Gaffney, John, 26–27, 28, 30, 50 Garrett, Geoffrey, 24, 138 Gonzalez, Felipe, 77 Guigou, Elizabeth, 120–121 Guterres, Antonio, 13, 73, 125–126 Held, David, 35 Hix, Simon, 28–29, 61–62, 83–86, 132 Hollande, François, 1, 2, 54, 131 Jansen, Thomas, 12, 106 Johansson, Karl Magnus, 110–111 Jospin, Lionel, 2, 65, 118–119, 129 Kinnock, Neil, 77 Kitschelt, Herbert, 38, 54–55, 78 Labour Party (Dutch), 65 Labour Party (British), 5–6, 65, 73–74, 75, 127, 137 Ladrech, Robert, 6, 53, 60 Lafontaine, Oskar, 2, 92, 117–119, 124, 129 Larsson Report, 120, 126 Lazar, Marc, 69, 106 Lord, Christopher, 28–29, 61–62, 83–86, 132 Maastricht Treaty, 45–46; ratification of, 3, 7, 26–27, 39 Mair, Peter, 22–23

INDEX

Marks, Gary, 138 Milward, Alan, 23–24 Mitterrand, François, 31, 77 Moravcsik, Andrew, 25–26, 46 Moscovici, Pierre, 74–75 Multilevel governance: definition, 81; and European Union, 88–90; and party networks, 90–92 National parliaments and European affairs: Danish, 29; French, 29; German 29 Notermans, Ton, 32, 49, 51, 75

163

networks, 13, 82, 99, 100, 103–106; and social democracy, 15 Party relevance, 21–23 PASOK. See Panhellenic Socialist Movement Paterson, William, 42 PES. See Party of European Socialists Peters, B. Guy, 30, 80 Quinn, Ruari, 122

Olsen, Johan, 10–11, 135

Rasmussen, Poul Nyrup, 96–98 Richardson, Jeremy, 138 Rocard, Michel, 96, 98, 127

Padgett, Stephen, 42 Panhellenic Socialist Movement (PASOK), 68, 76 Papandreou, Andreas, 96–98 Party activities at European level, 28–30, 35–36 Party adaptation, 82–83; to European Union, 83–84 Party management, 8 Party networks, 82; definition, 86–88; and multilevel governance, 90–92; and PES, 103–106; and state preference formation, 137–138 Party of European Socialists (PES): activities, 99–102; agenda setting, 109–112; aims, 109, 135; background, 11; competition with EPP, 11; development, 12, 14, 59, 92–98; ECOFIN meetings, 102, 124, 135; and employment issues, 13, 112–115, 119–127; party leaders’ meetings, 94, 99, 102, 111, 119; and party

SAP. See Social Democratic Party (Swedish) Sassoon, Donald, 144 Scharpf, Fritz, 49, 53, 59, 61 Scharping, Rudolf, 99–100, 103 Schröder, Gerhard, 7, 15, 68, 74 Single European Act (SEA), 43–45, 50 Smith, John, 74, 77 Smith, Mitchell, 26, 47, 77 Soares, Mario, 97–98 Social democracy, 15; convergence on Europe, 6, 9–10, 11, 75, 78–79; crisis, 38–39; definition, 51; and EMU, 115–119; and European integration, 39–53, 142–145; and Europeanization, 69–70; prospects, 138–139 Social Democratic Party (Danish), 5–6, 67, 73, 76 Social Democratic Party (Swedish) (SAP), 67, 76

164

INDEX

Social Democratic Party of Austria (SPOe), 66, 72 Social Democratic Party of Germany (SPD), 2, 7, 68, 72, 127 Socialist Party (French), 65, 72, 75–76, 127, 137 Socialist Party (Portuguese), 73 SPD. See Social Democratic Party of Germany SPOe. See Social Democratic Party of Austria

Strauss-Kahn, Dominique, 117, 118, 124, 126–127 Telo, Mario, 142–143 Transnational party federations, 84–88, 132, 134 Vranitzky, Franz, 72, 121 Wallace, William, 143, 144 Youngs, Richard, 3, 34, 70

About the Book

The shift in executive power from the European Union’s member states to Brussels raises profound questions for Europe’s social democratic parties as they seek to remain relevant within an integrated “Euro-polity.” This book analyzes the response to this challenge: an entirely new organizational form of party politics emerging at the European level. Ladrech shows how social democratic parties are retaining their influence on EU policymaking through a continuing process of adaptation and the evolution of an innovative party network. This network was manifested in the establishment in 1992 of the Party of European Socialists, which went on to play an important role in shaping policies at the 1996–1997 IGC. Ladrech also explores what this new form of political activity means for European politics, arguing that the traditional positions of left and right may be becoming increasingly significant within the EU’s evolving, transnational political culture. Robert Ladrech is lecturer in the School of Politics, International Relations and the Environment, at Keele University (UK).

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