the european commission and the cap decision making process

SIDEA Summer School

“Metodologia della ricerca nelle scienze sociali e in economia agraria”Bari 8 – 10 September 2008

The European Commission and the CAP decision making process:

Influence of side-payments over the policy outcomes

PhD : Matteo Iagatti

Supervisor: Prof. Alessandro Sorrentino

Università della Tuscia, Viterbo

“Metodologia della ricerca nelle scienze sociali e in economia agraria”, Bari. , 10 - 13 September, 2008

Outline

1. Subject of the Analysis and Objectives

2. Relevance of the theme

3. Theoretical Background

4. Key Starting Points

5. Bargaining Scenario for the analysis

6. “Work in Progress”

a. An institutional framework for the analysis

b. Detailed reconstruction of a decision making process



The decision making process in which the European Common policies are defined In particular the CAP shaping process


Our aim is to highlight HOW and THROUGH WHICH INSTRUMENTS the European Commission can manage and guide the process of CAP definition both

in terms of guidelines and instruments

Understand IF and HOW the Commission can “move”, using side-payments as a leverage tool, Member State’s preferences in order to reach an agreement in which Commission’s preferences are encompassed.

Subject of the Analysis

General Objective


General Objective is decomposed in TWO different steps:

A. Point out, inside the legislative procedure which are the STEPS and the INSTITUTIONAL CHANNELS where the Commission works in order to close the gap between MS’s position. In other words, to search for the moments and the places inside the procedure where the EC takes stock of MS’s preferences and can propose INTERMEDIATE COMPROMISES in order to get a positive and favorable agreement.

B. Propose a specific CASE STUDY (Health Check, Sugar Reform) in which the elements emerged during the previous research phase can serve to REBUILD THE COMPLETE BARGAINING PROCESS in order to obtain as much data as possible to understand MS’s and EC preferences and trace the continuous modifications of the agreement. All these data serves as a basis for the ANALYTICAL MODEL we are trying to develop.




The Analysis became relevant considering the RECENT REFORMS that has changed CAP shape and instruments and the impending Treaty modification that will bring CO-DECISION as legislative procedure under which CAP is

defined.

1. CAP after the Mid Term Review:

• Which perspectives for the CAP after the Fischler reform: is it still a “COMMON” policy?

• Shifting the DISTRIBUTIONAL STRUGGLE between MSs from the common arena to the national governments wide margins of maneuver for MSs in the Fischler reform implementation (crawling renationalization)

• DOMESTIC CHOICES in the reform implementation will make national bargaining positions more RIGID for further CAP negotiations relevance of entanglements between domestic and common arena


2. Changing Institutional and procedural settings :

The REFORMED TREATY ( also called Lisbon Treaty) will introduce new elements on the CAP definition process. CO-DECISION will substitute Consultation giving more powers to the EUROPEAN PARLIAMENT, which is today only a consultative body over agricultural issues.

This will affect the procedure not only from a formal point of view, but also from an OPERATIVE perspective ( Comitology)


In this context, understand how the CAP shaping and definition process is carried out by the various actors involved is important in order to

understand how the relation and the balance of powers between them can affect future reform attempts



Contribution in literature are referable to TWO main approaches

INTERGOVERNMENTALISTS NEO-FUNCTIONALISTS

Utilitarian approach

MS’s interests as the engine of European integration

Council as leading institution

UE Treaties

Not only national interests dominates the decision making and integration process

Active role of COMM

“Everyday Life” inside the EU Institution, Committees.

Different approach proposed by Putnam (1988)


• Putnam (1988) conceived the entanglements between international negotiation and domestic politics as a game of ratification of international treaties

• He called level I the international «bargaining between the negotiators, leading to a tentative agreement», and the level II «separate discussions within each group of constituents about whether to ratify the agreement» at domestic level

• Putnam defined «the win set for a given level II constituency as the set of all possible level I agreements that would win when simply voted up or down»

• «Larger win sets make level I agreement more likely, ceteris paribus […] The relative size of the respective level II win sets will affect the distribution of the joint gains from the international bargain»


4. Key Starting Points

• CAP reform is the outcome of an international negotiation between national governments (intergovernmental approach)

• Each country adapt its bargaining position mediating between thenational interests and the prevailing drifts in the Common arena (Putnam 1988, Putnam et al., 1993, Patterson, 1997)

• The “capacity/possibility” of each Member State (MS) to “pilot” domestic politics (in order to ease national pressures) and manage the negotiations at EU level, will determine its bargaining position

• A primary role is played by the EU institutional architecture and the decision making procedures (neo-functionalist approach)


DEFRUKESIT

I Level feasibleagreement

EC

5. Bargaining Scenario for the Analysis

Radical reformStatus Quo


The tools for the analysis emerged Inside the theoretical background could be represented as follows

In this context we aim in understanding HOW the COMM can “MOVE” national win sets inside the agreement area or Which

instruments the COMM uses to “REFUND” those MSs which are not “satisfied” by the level I agreement.

5. Work in Progress


1An Institutional framework for the analysis

The first step is aimed in highlighting the “STRUCTURE” inside which the various actors performs their role inside the decision making process

The analysis will be based on a detailed reconstruction of the decision making process of a recently amended Common Market Organization

(CMO): The Sugar Reform (why sugar??)

Why Sugar??


THREE main consideration:

1. Importance that the sugar sector has assumed for the COMM in relation to the completion of the reform process started in 2003.

2. The distance between the position of the MSs on crucial issues such as quota reduction/distribution or the temporary restructuring scheme.

3. Heterogeneous nature of the issues involved both political and technical.

5. Work in Progress



The first step is aimed in highlighting the “STRUCTURE” inside which the various actors performs their role inside the decision making process

The analysis is based on a detailed reconstruction of the decision making process of a recently amended Common Market Organization

(CMO): The Sugar Reform (why sugar??)

We are looking at each phase of the procedure, emphasizing the main constraint towards the settlement of an agreement.

5. Work in Progress



The work developed so far has focused on the steps of the procedure in which the COMM can propose intermediate and the

evolution of four fundamental issues of the reform:

•Prices

•Quota Management

•Restructuring Scheme

•Direct Payments

5. Work in Progress



The evolution of each issue has been traced ed along the different steps of the procedure throughout a documental reconstruction

The differences in MSs and COMM position are also taken into consideration in each step of the procedure and for each issue considered

We considered different kinds of documents provided from the COMM and the Council on their Institutional web sites

5. Work in Progress


5. Work in Progress



The evolution of each issue has been traced ed along the different steps of the procedure throughout a documental reconstruction

The differences in MSs and COMM position are also taken into consideration in each step of the procedure and for each issue considered

We considered different kinds of documents provided from the COMM and the Council on their Institutional web sites

5. Work in Progress



Overall Prices (Articles 3-4-5)

Quota management (Art 10-11) Restructuring Direct payments

DE

Wants a rapid implementation, is concerned about deadlines and a review

should not be excluded

Could consider gradual price cuts (max. 3

steps) but is aware of the difficulties of direct

payment implementation.

Wants compulsory quota cuts to be Council

competence

Wants no MS veto right, bio-ethanol options (partial dismantling) and no link between the factory and diversification measures.

Budget neutrality is questionable, compensation

could be lower. Rejects partial coupling (even temporary) and

seeks technical changes for energy crops.

FR

Supports the proposal: price reduction, decoupling, extra

sugar quota. High importance given to

treatment of the DOM sugar sector

Wants to keep to 39% price cut and would see

price staggering negatively

Wanted the possibility of production increases after 2010 and asked

quota transfer from DOM to mainland

Wants full efficiency of the scheme to operate as from

year 1, is against conversion of factories to refineries but to the bio-

ethanol option.

Compensation should be higher if budget allows. Favours

coupling of aids for DOM, at 100% compensation rate, if necessary with State Aids

IT

Opposed to price cuts and production reductions but

have engaged on restructuring fund,

diversification measures and refining quota.

Favour a lower price cut which would enable a higher compensation

rate.


competence as a linear reduction of the quota.

Wants strong MS role, partial dismantling to

include converts to refining, additional amount for

diversification measures and a top-up coupled

payment.

Wants compensation rate of 100% and national aid should

be allowed in southern countries.

ES

Against the reform The most affected regions are those

already hit by the 2nd package reforms.

Want smaller and staggered price cuts

calculated using derived prices.


competence

Disagree with 100% of the aid for the industry, want MS involvement and are interested in bio-ethanol

(partial dismantling option).

Wanted 100% compensation and a partial coupling option.

2006 is too early to start.

5. Work in Progress



As shown above we covered the first three step of the procedure, now we’re approaching the most complex part of the work:

1. Keep trace of the modification during the drafting and implementation phases

2. Interpretation of the collected data

5. Work in Progress


2Detailed reconstruction of a decision making process

With the information obtained from the first step we want to build up an analytical model of the decision making process which is

capable to catch the COMM role and the instrument it uses.

Various options :

1. Build up detailed preferences for the COMM and the MSs over the issues in discussion

2. Trace all the changes and quantify the side-payments

3. Implement these information in the existing model we build up sofar.

5. Work in Progress


2Detailed reconstruction of a decision making process

The analytical possibilities we have are different

Various options :

1. We can try to asses the bargaining power of each actor in the light of new data we collected

2. We can try to model the overall process or part of it ( e.g. Compromise inside the council)

3. We can simply describe the overall process from a more politicalpoint of view ( most difficult!!!)


Thank You for your attention

Critics Advices and Comments are more than welcome!!!!!!!!!!

Contact: [email protected]

the european commission and the cap decision making process

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