Member-State Principals, Supranational Agents, and the EU Budgetary Process, 1970-2008

Abstract

The Luxembourg and Brussels Treaties of 1970 and 1975 took the European Union budgetary process decisively beyond those of other international organizations, not only by giving the EU its own resources and by introducing qualified majority voting among its member governments, but also by giving limited but real powers to two supranational bodies, the European Commission and the European Parliament (EP). This paper examines the changing roles and the influence of the supranational Commission and Parliament on budgetary politics and policies in the EU, in four parts. The first section provides a summary overview of theories of delegation, agency and agenda setting in the EU. The second section applies this framework to the adoption of the EU budgetary system in the 1970 Treaty of Luxembourg, arguing that member governments were motivated in large part by normative concerns about democratic legitimacy in delegating to the EP, yet they also calculated carefully the likely consequences of such delegation for valued policy outcomes, including the preservation of the Common Agricultural Policy. Within those limits, I demonstrate, the Commission and the EP behaved largely as expected, acting systematically to foster the development of new spending policies, particularly in areas designed to appeal to European electorates, and that the EP in particular has succeeded in its efforts, albeit within the limits of its Treaty-based powers. In the third section of the paper, I examine the evolution of supranational budgetary powers from the adoption of a multiannual financing system in 1988 through 2008, which I argue has transformed the nature of supranational influence through a more cooperative budgetary process which increasingly resembles the legislative co-decision procedure in its de facto operation. The fourth and final section of the paper examines the new budgetary rules established by the as-yet unratified Treaty of Lisbon, asking about their likely impact on supranational actors in the budgetary process. The proposed changes to the budgetary process, it is argued, largely codify the current system as it has evolved during the era of financial perspectives, but it also introduces several new elements, including the deletion of the distinction between compulsory and non-compulsory expenditures and the inter-institutional agreements, that may affect the rights and the powers of the European Parliament in ways to be determined in practice.