institutional hokey-pokey: the politics of multispeed integration in the european union

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Institutional hokey-pokey: thepolitics of multispeed integrationin the European UnionChristian B. Jensen & Jonathan B. SlapinPublished online: 08 Sep 2011.

To cite this article: Christian B. Jensen & Jonathan B. Slapin (2012) Institutional hokey-pokey: the politics of multispeed integration in the European Union, Journal of EuropeanPublic Policy, 19:6, 779-795, DOI: 10.1080/13501763.2011.610694

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Institutional hokey-pokey: the politicsof multispeed integration in theEuropean UnionChristian B. Jensen and Jonathan B. Slapin

ABSTRACT EU member states desiring deeper integration often call for a multi-speed approach to pursue ambitious projects without the hinderance of laggards. Atother times, laggards have desired a multispeed approach to avoid policies they findobjectionable. Under what circumstances do laggards (integrationists) propose(object) to a multispeed Europe? We investigate the institutions and member statepreferences that lead these camps to accept or resist multispeed proposals, payingparticular attention to how a multispeed approach affects member state bargainingpower. We present a series of case studies to demonstrate that the preference con-figurations we examine do, in fact, lead states to pursue the policies with regard toa multispeed Europe that we expect.

KEY WORDS EMU; flexible integration; formal theory; multispeed integration;political institutions; Schengen.

INTRODUCTION

Following the June 2008 Irish ‘no’ vote on the European Union’s (EU) LisbonTreaty, ardent Euro-federalists issued calls for multispeed Europe (Smyth2008). A multispeed approach allows member states desiring deeper integrationto pursue ambitious projects without hinderance from laggards.1 Such calls arenot new. In the early 1980s, amid Margaret Thatcher’s threats to veto all EUactivity until she secured a budget rebate for the UK, French President FrancoisMitterrand suggested that other member states leave Britain on the sidelines(Dobbs 1984). Again, while negotiating the 1997 Treaty of Amsterdam, theFrench and Germans pressed for an ‘enhanced co-operation’ clause, to allowfor deeper co-operation among a small group of member states, over British pro-tests (Palmer 1996).

Europhiles are not the only ones to propose a multispeed Europe. Laggardshave also desired a multispeed approach to integration to avoid implementingpolicies to which they object. While Europhiles often speak of ‘enhanced’ or‘closer’ co-operation laggards talk of opt-outs. The British under Prime MinisterJohn Major, for example, sought an opt-out from the EU’s social policy con-tained in the Maastricht Treaty. Following their failure to ratify the Maastricht

Journal of European Public PolicyISSN 1350-1763 print; 1466-4429 online # 2012 Taylor & Francis

http://www.tandfonline.comhttp://dx.doi.org/10.1080/13501763.2011.610694

Journal of European Public Policy 19:6 August 2012: 779–795

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Treaty, the Danes, along with the United Kingdom (UK), demanded an opt-out from Economic and Monetary Union (EMU). Despite the difference inlanguage, the result is the same – two groups of member states pursuing inte-gration at different speeds.

Multispeed proposals have been at times resisted and at times accepted byboth camps. Although, a multispeed approach might allow laggards to avoidswallowing distasteful policies, they may fear being left on the sidelines. Integra-tionist states, on the other hand, relish the thought of moving Europe into newpolicy areas without pesky laggards holding them back, but they worry that suchan approach undermines the goal of a united Europe. This raises an interestingpuzzle. Under what circumstances do laggards (integrationists) support(oppose) a multispeed Europe? To investigate this question, we draw on scholar-ship on the rational design of international organizations, European Uniondecision-making and the role of exit and voice in bargaining.

Using a spatial model, we investigate the institutions and member state pre-ferences that lead both camps to accept and resist multispeed proposals, payingparticular attention to how a multispeed approach affects bargaining afterwards.Our primary insight is that decisions to implement a multispeed approach alterthe identity and location of the pivotal actor in the Council, therefore alteringpossible policy outcomes. Whether laggards or integrationists prefer a multi-speed approach depends upon who benefits in terms of policy outcomes frommultispeed integration following a change in identity and location of thepivotal actor.

MULTISPEED INTEGRATION IN THE EU AND BEYOND

The major theoretical traditions in European integration literature – suprana-tionalism (e.g., Marks et al. 1996), liberal intergovernmentalism (e.g., Moravscik1998) and new institutionalism (e.g., Tsebelis and Garrett 2001) – have largelyneglected the topic of multispeed integration. Moravcsik (1998: 471), forinstance, acknowledges that a ‘two-track’, or ‘flexible’ Europe is a legacy of theMaastricht Treaty, but his liberal intergovernmental theory does not specificallyaddress when and why member states pursue this option. Likewise, Tsebelis andGarrett’s (2001) theory of legislative decision-making does not account for a mul-tispeed process. And supranationalists, who tend to place less emphasis onmember state governments in theories of integration, do not explore why govern-ments sometimes wish to opt out of decision-making.

Some scholars have suggested that multispeed integration has the potential,albeit unlikely, to lead to a breakdown of the European project as memberstates pick and chose from the menu of rules they wish to enforce (Kelemen2007). When considering future paths for European integration, Schmitter(1996) has suggested that a Europe with multiple centers and different member-ships advancing with integration at various speeds is a suboptimal, yet likelyoutcome for the EU. Other scholars are more sanguine about the prospectsfor multispeed approaches. Literature on international organizations, for

780 Journal of European Public Policy

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example, finds that flexibility often increases the likelihood of co-operation.Downs et al. (1998) argued that deeper integration is possible if the states pre-ferring more co-operation integrate first, allowing other states to join them later.If laggards are let into the union too soon, they will wield their veto power toblock further integration that would have been possible if they had been kepton the sidelines until a later date. Before exploring our model, we examinethe various literatures on EU integration, international organizations and feder-alism with respect to their implications for multispeed integration in the EU.

Multispeed integration in EU literature

EU research generally discusses three categories of multispeed integration: mul-tispeed; variable geometry; and a la carte (see Stubb 1996, 2002; Warleigh2002). Multispeed integration is characterized by a core of member statesmoving forward on some dimension of integration with the assumption thatthose that lag behind will eventually join when they are able and willing todo so. The second category, variable geometry, refers to the establishment ofa permanent division between one set of member states and another basedupon member states’ abilities to implement EU policies. In the final category,a la carte membership, member states select the aspects of European integrationin which they wish to participate based solely upon their willingness, rather thantheir ability, to implement policy. Our analysis is concerned with the third cat-egory in which states choose to opt out based upon their policy preferences.

Recent work theorizes why member states pursue multispeed integration insome areas, but not in others (Harstad 2006; Kolliker 2006; Labeta 2009).Kolliker (2006) argues that multispeed integration is least likely in policyareas that handle public goods where common pool resource problems arelikely to arise. When it is difficult to exclude member states outside of thenew core from partaking in benefits produced by those participating in thecore, there is little incentive to form a core in the first place. However, whenit is possible to prevent outsiders from free-riding, core states desiring deeperintegration have a stronger incentive to co-operate. Moreover, member statesoutside the core have a stronger incentive to eventually join the core.2 Thiswork represents a great advance in understanding incentives for creating a multi-speed Europe; however, it still overlooks the role of member state preferencesand EU institutions, such as voting rules, that lie at the heart of our argument.

Flexibility and opt-outs in international organizations

The decision to create a multispeed Europe is, in essence, a decision to createmore flexibility in EU decision-making. Recent literature on the rationaldesign of international organizations has argued that flexible institutions,including the presence of escape clauses as well as the ability to renegotiateterms of agreements following a specific period of time, allows for stronger insti-tutional co-operation but also involves costs (Downs and Rocke 1995;

C.B. Jensen and J.B. Slapin: Institutional hokey-pokey 781

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Koremenos et al. 2001; Rosendorff and Milner 2001; Rosendorff 2005). Somehave even suggested that increased legalization may backfire, leading to less co-operation (at least in the form of trade liberalization) because states refuse toparticipate in highly legalized regimes that go too far (Goldstein and Martin2000).

Renegotiating treaties is costly as it involves not only coming to new agree-ments with negotiating partners, but may also involve putting together newdomestic political coalitions, whose support may be necessary for ratification(Koremenos 2005). Creating escape clauses may be very costly in the presenceof incomplete information. If it is difficult to know when a partner state is rene-ging on obligations because domestic politics makes it absolutely necessary orwhether they are simply trying to avoid costs of compliance, states may useescape clauses in a way that undermines the entire treaty (Rosendorff 2005).

This literature suggests that creating a multispeed Europe may be a double-edged sword. On the one hand, as the EU diversifies by adding more states, amultispeed approach may offer flexibility so that all member states canchoose a policy option sufficiently close to their ideal. On the other hand, itmay increase bargaining costs and limit the degree to which states integrateby offering them an opt-out that would not otherwise exist.

Exit, voice and federal bargaining

Models using Hirschman’s (1970) influential exit, voice and loyalty framework(e.g., Bednar 2007; Dowding et al. 2000; Dowding and John 2008; Gehlbach2006; Slapin 2009) offer insights into how the creation of a multispeed Europeis likely to affect bargaining power among member states. When facing a pro-posal on integration with which they do not agree, member states have theoption to voice their discontent, perhaps through vetoing policy change, or toopt out of the given policy, akin to partial exit from the EU. Which of thesestrategies states choose (and, indeed, are even available to states) dependsupon the costs associated with allowing the laggard to opt out for both integra-tionists and the laggards.3 If integrationist states sincerely desire the partici-pation of laggards, and laggards do not fear being left on the sidelines,laggards can threaten to veto legislation unless their demands for slower andshallower unification are met. Integrationists prefer that laggards blockchange in a union that encompasses all member states over the creation of amultispeed union where laggards cannot block change and are instead leftbehind on certain contentious issues.

On the other hand, if laggards pay a high price for being left behind by inte-grationists on a particular issue and integrationists are more concerned aboutdeeper co-operation among a select few than shallower co-operation amongall states, laggards will not be able exercise their veto. If laggards did exercisetheir veto, integrationists may opt to create a multispeed Europe that leavesthe laggards on the sidelines. Fearing this, they choose to go along with thepolicy of deeper integration. Generally, this literature suggests that both


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laggards and integrationists must weigh the costs and benefits of deeper inte-gration against the costs and benefits of pursuing integration in smaller groups.

LEGAL FOUNDATIONS OF A MULTISPEED EUROPE

There are many legal avenues for a multispeed process. Integrationist states couldpursue deeper integration outside of the framework of the EU. Alternatively,member states can pursue different levels of co-operation within the legal frame-work of the EU. We are interested in situations in which a single, discrete decisionto opt in or opt out on a particular policy has implications for an entire policy area.

There are two primary legal mechanisms for pursuing a multispeed approachwithin the treaties.4 The first is Art. 114(4) Treaty on the Functioning of theEuropean Union (TFEU), which was first introduced with the Single EuropeanAct (SEA) and allows member states, under strict conditions, to apply nationalrules after they have been outvoted by a qualified majority in the Council(Ehlermann 1998). This clause means that, in certain circumstances, laggardscan opt out after a vote has been taken. Of course, knowing this, integrationistsmay not push for a vote with which they know laggard states will not comply.

The second mechanism is the provision for closer co-operation found in Art.20 Treaty on European Union (TEU), first introduced with the Treaty ofAmsterdam. This provision allows a majority of member states to pursuedeeper integration as a last resort when there is no other way to pursue inte-gration within the EU framework. According to Art 329 TFEU, memberstates in the Council may unanimously vote to invoke Art. 20 upon a proposalfrom the Commission (requested by those states who wish to pursue enhancedco-operation) with the consent of the European Parliament. Art. 20 TEUaddresses how decisions are taken when not all member states participate inthe decision-making process. It states that ‘only members of the Council repre-senting the Member States participating in enhanced cooperation shall take partin the vote’. The qualified majority threshold is recalculated based on the statesparticipating in the policy area. Thus, leaving the laggards on the sidelines effec-tively changes the identity and location of the pivotal member of the Council.

We present a model which examines decision-making once member stateshave decided to allow for a multispeed approach. We are interested in exploringthe policy consequences of a multispeed approach, and what these consequencesmean for future decisions regarding opt-outs. The model holds in any situationin which a laggard member state can opt-out after being made worse off than hecurrently is as a result of the decision-making process. This can occur both whena multi-speed approach is pursued outside or within the treaty framework.

THE MODEL

Assume a game with three players i [ {A,Q,L}, where A is a supranationalagenda setter, Q is the qualified majority pivot in the Council, and L is alaggard.5 Each player holds a single-peaked Euclidean preference in a uni-


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dimensional policy space, Xi [ <. This policy space reflects a single issue withina larger policy area. For example, it may refer to one decision regarding mon-etary union within the larger policy area of EMU. For simplicity, the statusquo policy, SQ, is located at zero. We assume XA . XQ . XL . 0. In otherwords, A prefers the most policy change, followed by Q, followed by L, andall players prefer some degree of change. The game is sequential. It beginswhen A makes a policy proposal XP anywhere in the policy space, XP [ <.After A makes a proposal, Q can accept or reject the proposal. If accepted byQ, the proposal Xp becomes law.6 In the final stage of the game, L can chooseto remain part of policy-making in this policy area, or it can chose to exit. IfL chooses to exit, it implements its own ideal point on the particular issueunder debate, but it does not participate in any future decision-making in theentire policy area, not only on this particular policy. If L decides to exit, allactors pay a non-policy cost CiL associated with L’s exit. For the laggard,these non-policy costs include any harm to its reputation as a result of optingout, losses owing to the lack of harmonization and domestic audience costsassuming a segment of its public would have preferred to remain part of EUdecision-making. For the other states, non-policy costs could include lossesowing to lack of harmonization with the laggard on this issue and futureissues in this policy area, possible harm done the EU’s reputation abroadbecause it could not successfully co-ordinate among its members, and loss ofany value attached to pursuing integration as a united Europe. Figure 1 presentsthe game tree with the sequence of moves and payoffs.

Figure 1. The sequential opt-out game


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For any policy A proposes, there are four possible outcomes of the game: Qaccepts and L exits, Q accepts and L stays, Q rejects and L exits, and Q rejectsand L stays. The payoffs for each of these are a function of the distance of theplayer from the final policy outcome as well as player’s non-policy costs associ-ated with the laggard’s exit CiL, should L decide to exit this policy area. If L exits,it can implement its own policy ideal point on this issue, but it pays a costassociated with leaving the decision making process, CLL. We assume thatCLL . XL. This implies that L prefers to remain part of the decision-makingprocess if A’s proposal is rejected and the status quo prevails. In other words,if L is at least as well off under the new policy as under the status quo, it isnot worth leaving the entire policy area for any short-term policy gains itcould achieve by implementing its own ideal point; the non-policy costs associ-ated with doing so are too high.

Solving the game through backwards induction, we first examine the decisionof L to stay or exit. If Q rejects A’s proposal, the status quo remains, and byassumption L is best off remaining part of the decision-making process. If Qaccepts A’s proposal XP, L stays part of the decision-making process if XP ≤CLL + XL and opts out otherwise.7 Having determined the conditions underwhich L opts out, we can move on to examine Q’s decision. If L stays (XP ≤CLL + XL), Q accepts any proposal XP ≤ 2XQ, but if L opts out, Q onlyaccepts a proposal XP ≤ 2XQ – CQL. Lastly, we consider A’s move. AssumingA can make a proposal XP . CAL, A is always best off making a proposal thatQ accepts. Thus, A is faced with the choice of making the proposal XP ¼ CLL

+ XL (assuming CLL + XL , XA) so that Q accepts and L remains part of thedecision-making process, or the proposal XP ¼ 2XQ – CQL that Q acceptsbut leads L to exit (or XP ¼ XA – CQL if 2XQ ≥ XA). A compares its utilityfrom these two choices, and makes a proposal so that Q accepts and L doesnot to opt out if CAL ≥ 2XQ – CQL – CLL – XL assuming 2XQ , XA (orCAL ≥ XA – CQL – CLL – XL if 2XQ ≥ XA). Otherwise, A makes a proposalthat is acceptable to Q but leads L to opt out.

This equilibrium solution sets out the conditions under which A makes a pro-posal that Q accepts and keeps L part of the decision-making process. When A’scosts associated with L’s opt out are high relative to its policy losses, the costs toQ and L of L opting out, and L’s policy loss associated with accepting A’s pro-posal, A makes a proposal acceptable to both Q and L. When A’s costs associatedwith L opting out are relatively low, or Q’s position is relatively close to A, Amakes a proposal that is acceptable to Q but that leads L to opt out. Thereare two possible interpretations of L’s opt-out. The first interpretation is thatthe laggard demands an opt-out because the integrationist states push changetoo far. The second interpretation is that the agenda-setter and pivot demanda multispeed approach by proposing a policy they know is unacceptable tothe laggard. Although empirically distinct, these outcomes are equivalentfrom a theoretical standpoint and both are compatible with the model.

Although a one shot game, this framework provides insights into the dynamicprocess of policy opt-outs. Imagine states have decided to reform border


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security, and the Commission makes a proposal that the Council accepts overthe objections of a laggard, who then opts out of border security decision-making. Later a new border security policy arises where the states have asimilar preference configuration to the previous issue. However, the formerlaggard is no longer part of the decision-making process. There is a newlaggard L∗ with a policy position X ∗

L . XL and a new pivot Q∗ with a positionX ∗

Q . XQ . If X ∗Q were the same as XQ, any proposal that led L to stay will also

keep L∗ in the decision-making process. However, when XQ shifts to the right toXQ

∗, the range of proposals acceptable to Q∗, but that lead L∗ to exit, grows,assuming costs associated with exiting have not changed, C ∗

iL = CiL∀i. Todemonstrate this point, assume CQL ¼ 0. Q accepts any proposal XP ≤ 2XQ

while L only stays if XP ≤ CLL + XL. Imagine the ideal points of both L andQ shift to the right by some amount Z. The range of points acceptable to Qexpands by 2Z, but the range of points acceptable to L only expands by Z.This holds because Q decides to accept a proposal by comparing the proposalto the status quo, while L compares the proposal to opting out. This holds solong as the shift from L to L∗ is less than twice the shift of Q to Q∗. Thus, shift-ing the position of the pivot to the right can cause an opt-out cascade. There aremany new policies under which L∗ would not have opted out given the positionof the old pivot Q, but would opt out given the position of Q∗.

In the following section, we present a series of cases designed to demonstratethe plausibility of our model. We are not presenting these cases as a definitivetest of a hypothesis. However, the cases we examine are among the highestprofile examples of a small number of examples that fit the circumstances ourmodel is designed to explain. Kollicker (2006) identifies 15 examples ofmulti-speed integration. Of these, three are based on different particulars ofthe Schengen Agreement and three are based on different aspects of monetaryintegration (Kollicker 2006: 117). The cases we discuss, the Schengen Agree-ment, the Social Charter and EMU, are presented as high-profile demonstrativeexamples of our model. Our focus on these cases reflects views often stated in theliterature that opt-outs in these areas are the most substantively significant forthe future of European integration (Adler-Nissen 2009: 63–4). In terms ofour model, EMU represents an opt-out cascade, while the Schengen Protocolsand the Social Charter represent opt-outs without cascades of the integrationistand laggard initiated varieties respectively.

CASE STUDIES

Opt-out cascades: Swedish opt out from monetary union

Our model has suggested conditions under which an opt-out cascade (statesopting out because previous states’ decisions to opt out created favorable con-ditions for subsequent opt-outs) is possible. In the case of EMU, the UK andDenmark, take on the role of L, and opted out right from the start. Theirdecisions to opt out are straightforward from the point of view of our model.


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The policy (spatial) costs to L for participating in EMU were too high, so theywere willing the pay the non-policy costs (C) associated with opting out. Inte-grationist states preferred to see the laggards leave (they paid C as well) thanwater down or get rid of monetary union in an effort to maintain a singlepolicy. However, the decision by the UK and Denmark to leave set up anopt-out cascade in which Sweden (L∗) opted out in part because of thechanges to the policy space that resulted from the earlier opt outs.

A key reason for the Swedish decision to opt out of the EMU, cited by areport by an advisory committee led by Lars Calmfors (Calmfors et al. 1997),was that the UK and Denmark had already opted out (Novack 1999: 7).Although Sweden was not an EU member state at the time that Denmarkand the UK opted out of the EMU, we argue that had Denmark and the UKdecided to participate in the EMU, Sweden would have been much morelikely to participate when it joined the EU. Key to Sweden’s decision was theposition of the pivotal actor in the decision-making process. In terms of ourmodel, Q shifted to Q∗, making possible outcomes that the Swedes found unac-ceptable.

The cascade observation predicted by our model requires a particular prefer-ence ordering of states. States that opt out second or third should be less Euro-skeptic on the dimension in question than the state that opts out first. As thedimension in question here is monetary integration, we first look at average inter-est rates from 1990 to 2000 to give a rough idea of what interest rates fiscal auth-orities in the various member states would have preferred. We rank these averagesfrom lowest to highest. We chose to use the interest rates as the dimension alongwhich to place the member states because the European Central Bank’s (ECB)most important policy decision is the setting of interest rate targets for theEuro-zone countries. We further assume that member states’ central bank repre-sentatives prefer that the ECB set interest rate targets that would require the leastamount of policy adjustment from the member state governments. We do notargue that this ranking is a direct measure of preferences but rather a heuristictool for estimating what interest rates governments would be most likely toprefer. We base this on the assumption that governments are more likely toprefer interest rates from the ECB that are most similar to the interest ratesthey had established at the national level prior to joining the euro.

With regard to EMU policy decisions, there is a supranational agenda setterin the form of the ECB’s Executive Board. The Governing Council, the maindecision-making body of the ECB, is made up of the six member ExecutiveBoard plus representatives of the central banks of the countries participatingin the common currency, and votes by simple majority. The ExecutiveBoard’s membership, which includes the President of the ECB, is appointedby the member state governments of the eurozone. Simon Hix (2005: 331–2) argues that it is reasonable to assume that the six votes from the ExecutiveBoard will support higher interest rates as a means to avoid inflation.8 Interms of our model, the supranational agenda-setter will propose a policy tothe right of the pivot.


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When all 15 pre-enlargement member states are included, the winning coalitionconsists of the Executive Board plus the representatives of the central banks fromthe five member states with the highest interest rate preferences. When only 13or 12 of the pre-enlargement member states are included, the winning coalitionconsists of the Executive Board and the representatives of the central banks fromthe four member states with the highest interest rate preferences.

Table 1 presents member states’ average interest rates, 1990–2000, and theranking of those averages. When we match the voting rules with the rankingsof the averages, we find that if all 15 member states had participated in thecommon currency, the UK would be the pivotal state, with Sweden solidlyinside the range of the winning coalition. However, with Denmark and theUK outside the EMU, Sweden’s position within the winning coalitionbecomes tenuous. If the Swedish government had much uncertainty about itsown interest rate preferences relative to those of the other member states,opting out probably looked like the safest option. This would not have beenthe case had Sweden been able to rely on the co-operation of the British andDanish representatives on the ECB governing council.

When the UK and Denmark opted out it may have also reduced the costs ofother states opting out after them. Under some interpretations of its terms,Sweden’s opt-out was a technical violation of its accession treaty. But the hea-viest sanctions for violating the treaty can only be imposed through Article 7 ofthe TEU, which allows for the suspension of voting rights for a waywardmember state but only if there is a unanimous vote of the other memberstates. When the UK and Denmark opted out it may have made it impossible

Table 1 EU15 average annual long-term fixed interest rates, 1990–2000

Country Average (1990–2000) Ranking of average

Spain 9.13 1Italy 8.70 2Sweden 8.37 3Finland 8.33 4United Kingdom 7.78 5Portugal 7.44 6Denmark 7.40 7Ireland 7.39 8Belgium 7.02 9Greece 6.97 10France 6.87 11Austria 6.66 12Netherlands 6.57 13Germany 6.50 14Luxembourg 5.88 15

Source: OECD (http://stats.oecd.org/Index.aspx?DatasetCode=MEI_FIN)


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for the Council to impose this sanction on any member state that wants to optout even if its accession treaty requires participation. This may suggest that cas-cades are a function only of a previous country’s opting out. However, thiswould lead to the conclusion that opt-outs always lead to cascades, which wedo not believe is the case. Our argument is that cascades are function both ofthe distribution of preferences, the costs and benefits of participation versusthe costs and benefits of exit, and voting rules.

Opt-outs without cascades: the Schengen Agreement and the SocialCharter

Our model predicts two possible situations of opt-out without cascades. In thefirst, the laggard initiates a multispeed approach, allowing the agenda-setter andthe integrationist member states to move on without them. In the second, theintegrationist agenda-setter initiates. While these two scenarios are empiricallydistinguishable, from the point of view of our model, they are theoreticallyequivalent. An integrationist agenda-setter may recognize that it could realizeimportant policy gains from a multispeed approach that excludes a laggard.To achieve this desirable end, the agenda-setter could propose a policy thatso distasteful to the laggard that the laggard has little choice but to opt out.

The Schengen Agreement is one of the most prominent examples of a multi-speed approach adopted because of the desire of integrationist governments tomove forward without laggards. Although initially not formally part of the EUframework, the Schengen Agreement was deeply intertwined with EU policiesfrom its beginning. The free movement of peoples caused complications forimmigration policies for the member states. In 1985, France, Germany andthe Benelux countries adopted the Schengen Accord outside the normal frame-work of EU decision-making. By initiating the integration of migration policyoutside the EU, these five member states were able to move forward on a dimen-sion of integration without compromising with laggard governments (Guirau-don 2000). The five original Schengen countries wished to move forward on theapplication of free movement of peoples to non-EU citizens. Denmark, Ireland,Greece and the UK opposed the application of this principle to citizens of non-EU member states (Kollicker 2006: 212; Nanz 1995: 31; Wiener 1999). Ofthese states the UK has been most persistent in its opposition. Denmark’s oppo-sition is based primarily on the legal basis of the Schengen protocols, whileBritish governments have opposed the substance of the protocols themselves(Wiener 1999). Ireland’s decision to opt out of Schengen, meanwhile, isdriven by its desire to retain its common travel area with the UK. This leadsto an arrangement of preferences on Schengen that places the UK at thelaggard end of the spectrum and Germany at the most integrationist, withthe rest of the member states arranged between them. This preference distri-bution is consistent with recent theoretical analyses of EU immigration policy(Givens and Luedtke 2004).


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In the early stages of Schengen’s development, integrationist governmentssought a multispeed approach. In 1985 there were 10 member states, withSpain and Portugal set to join the following year. As the SEA was being nego-tiated, Denmark, Ireland and the UK opposed the full incorporation of Schen-gen into the amended Treaty. Belgium, France, Germany, Luxembourg and theNetherlands opposed the opening of their borders completely to Greece, Italy,Portugal and Spain. The argument presented in the negotiations was that Med-iterranean countries were incapable of enforcing their border regulations (Dinan2010: 531). In both the original 1985 Schengen Agreement and the SEA nego-tiations in 1986, the integrationist bloc of governments chose to excludemember states whether or not the excluded governments wanted to participate.

The situation changed in the 1990s when the Schengen protocols were incor-porated into the Amsterdam Treaty. By that time, a qualified majority of gov-ernments were ready to participate and the laggards – the UK, Ireland and to alesser extent Denmark – sought opt-outs (Wiener 1999). In terms of ourmodel, Schengen was set up so that, once it was incorporated into the treaty fra-mework, the laggards were willing the pay the non-policy cost CLL to exit (or, inthis case, remain out), and the integrationists were also willing to pay CiL toallow them to stay out. The policy benefits for both sides associated withmoving forward without the laggards were too great. At the same time,though, the difference in the position of the pivot in the hypothetical scenariowhere Denmark, the UK and Ireland would have participated, compared withthe scenario where they did not, was great enough to lead other states to opt out.

If Schengen represents a situation where the integrationist side initiated themulti-speed approach, the Social Charter represents a scenario in which thelaggard insisted on a multispeed approach. The British government underJohn Major was opposed to including the Social Charter in the MaastrichtTreaty, and threatened to block the new treaty unless the UK was exemptedfrom the Social Protocol sections. In the debates about the inclusion of theSocial Charter, only the Major government opposed the basic premise of acommon European social policy. This opposition was based on that govern-ment’s unusual, for Europe, approach to social policy and industrial relations(Towers 1992). The UK was not the only member to resist the implementationof the Social Charter. However, in the end, it was the only member state thatcould not be brought into the fold (Kollicker 2006: 183). Given that theSocial Charter was going to allow for social policy to be passed by qualifiedmajority vote, the UK government’s unique opposition to a European socialpolicy would have placed that government on the losing side of the pivotalmember state in most if not all social policy votes in the Council of Ministers.The Major government knew that the UK would not be able to block proposalsand it feared that the pivot preferred substantially more integration than theUK. This led the UK to seek an opt-out on this issue. Later, under the Blairgovernment, which held a more integrationist position with regard to EUsocial policy, the decision to opt out was reversed. This supports our hypothesisthat laggard states that are far more Euro-skeptic than the pivot will pursue an


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opt-out, and this will be supported. Given that all other member states generallysupported the inclusion of the Social Charter, the UK’s opt out did not greatlyshift the position of the pivot, and thus no cascade occurred.

CONCLUSION

This article presents an institutional analysis of the decision-making rules underwhich policy would be decided if member states decide to opt out. Memberstates compare policy outcomes that would occur following opt-outs withthose that would have occurred if the all states had remained part of thedecision-making process. They also weigh the relative benefits of these policyoutcomes against the costs of exiting. Our crucial insight is that a decision toopt out by one member state affects the identity and location of the pivotalmember state in Council decision-making. This, in turn, affects policy out-comes and may potentially affect other states’ preferences with regard toopting out of EU decision-making within a particular policy area.

We presented a theoretical model of when and why member states supportopt-outs. In some instances, laggard states are most likely to call for a multispeedapproach; in other instances states desiring deeper integration will call for a mul-tispeed approach; and in some cases, cascading opt-outs are possible. States thatprefer a unified approach on a particular policy will start to call for a multispeedapproach only after other states opt out first.

European integration is evolving into a ‘number of, often overlapping, stategroupings established for cooperation in a variety of fields’ (Majone 2009:205). This suggests that the explaining the progress of European integrationhas to include an examination of when member states will or will not partici-pate. Given the highly institutionalized nature of EU decision, such a theoryhas to account for decision-making institutions. Our analysis represents a con-tribution towards that goal. Our analysis also leads to policy implications. Fromthe point of view of advocates of a fully harmonized and integrated EU, themost distressing scenario is when a cascade of several opt-outs occurs. Wefind that cascades are possible even when all the member states want policy tomove in the same direction. The passages of the treaties that allow memberstates to opt out may encourage the most integrationist member states to sacri-fice unity in the pursuit of rapid integration.

Biographical notes: Christian B. Jensen is Assistant Professor in the Depart-ment of Political Science at the University of Iowa, USA. Jonathan B. Slapinis Assistant Professor in the Department of Political Science at the Universityof Houston, USA.

Address for correspondence: Christian B. Jensen, Department of PoliticalScience, University of Iowa, 341 Schaeffer Hall, Iowa City, Iowa, 52242,USA. email: [email protected]/ Jonathan B. Slapin, Department ofPolitical Science, University of Houston, 4800 Calhoun Rd, Philip


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G. Hoffman Hall, Room 447, Houston, Texas, 77204-3011, USA. email:[email protected]

ACKNOWLEDGEMENTS

Earlier versions of this article were presented at the annual meeting of theMidwest Political Science Association, Chicago, 2009, the biannual meetingof the European Union Studies Association, Los Angeles, 2009, and theDublin European Institute, University College Dublin, October 2009. Weare very grateful to Sergio Fabbrini, Dan Kelemen, Will Phelan, ThomasSattler, Daniel Thomas and several anonymous reviewers for their extensivethoughts and insights on earlier drafts.

NOTES

1 There are many different terms used to describe a pattern of integration in whichsome member states pursue integration at a faster rate than others. These includeamong others ‘multispeed Europe’, ‘variable geometry’, ‘Europe a la carte’ and ‘dif-ferentiated integration’. For an explanation of the distinctions between these variousterminologies, see Ehlermann (1998); Stubb (1996, 2002); and Warleigh (2002).

2 Labeta (2009) expands upon this public goods model by exploring which govern-ments benefit from different types of externalities. She argues there are limited cir-cumstances under which both integrationists and laggards support a flexibleapproach to integration.

3 Several models examine how costs associated with opting out of a particular policyaffect bargaining in the EU and other international organizations (e.g., Schneiderand Cederman 1994; Slapin 2009; Voeten 2001). Other literature examines howpolicy differentiation among member states affects the trade-off between wideningand deepening within international organizations (Gilligan 2004; Stone et al.2008). Our approach differs from previous studies by focusing on how opting outaffects the identity and location of the pivotal decision-maker. No model of whichwe are aware examines how the opting out interacts with the EU’s decision-making rules.

4 Other mechanisms include Art. 350 TFEU, which allows for deeper co-operationbetween the Benelux countries, and Art. 184 TFEU, which allows for co-operationamong a subset of member states in the areas of research and technological develop-ment. These mechanisms focus on either particular regions or policy areas, and aretherefore not as encompassing as the mechanisms on which we focus. All treatyarticle numbers refer to the Lisbon Treaty.

5 There is some question about the importance of the Qualified Majority Vote (QMV)pivot in the Council (Achen 2006; Hayes-Renshaw and Wallace 1997; Mattila andLane 2001). Nevertheless, there is strong evidence that QMV matters (Golub 1999;Schulz and Konig 2000). It is uncontroversial among formal modelers to model theCouncil decision-making process as though the pivot matters (e.g., Crombez 1996,1997; Tsebelis 1994; Tsebelis and Garrett 2000). Regardless, our general argument iscompatible with any model in which a laggard’s decision to opt out can change thepolicy outcome. This would be true of the Nash bargaining solution (NBS) proposedby Achen (2006), for example. We believe that our model is based on a strongertheoretical foundation than the NBS, as it is rooted in the rules of EU decision-making, whereas the NBS is effectively a weighted average of member state positions.


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6 To simplify matters, the model ignores the conditional agenda-setting power of theEuropean Parliament or the Commission under some legislative procedures (consul-tation and co-operation) (Tsebelis 1994). In addition, the model does not considerother ways an agenda-setter’s proposal could be amended by members of theCouncil. This does not affect the conclusions we are drawing from the model. Allthat is required for our general argument is that policy change can make thelaggard worse off than under the status quo. It is also clearly the case that amember of Council can be made worse off under the co-decision procedure,which eliminates the possibility of conditional agenda setting. Allowing an integra-tionalist agenda-setter (e.g., the Commission or the Parliament under the co-decisionprocedure) to select the policy outcome within the winset of the status quo effectivelymodels the worst case scenario for the laggard.

7 In the event of indifference between staying or opting out, we assume the laggardstays.

8 For an excellent discussion of the inflation avoidant tendencies of independentcentral banks see Eijffinger and De Haan (1996: 29–31).

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institutional hokey-pokey: the politics of multispeed integration in the european union

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