Jean Monnet Center at NYU School of Law



We have attempted in this paper to show that creating European regulatory agencies can increase both the efficiency and the legitimacy of the decision-making process within the EU. We have also argued, contrary to the prevailing school of thought, that this could be legally possible under the current treaties.248

In doing so, we have drawn on the US model of independent regulatory agencies. We found that, despite fundamental differences between the two systems, US federalism and the emerging European federalism face similar problems. One such parallel problem relates to the efficiency and legitimacy of the regulatory process in an increasingly complex and changing environment. We asserted that where the Americans take a realistic and pragmatic approach, Europeans are always prisoners of a flagrantly dogmatic legalism.

This dogmatic approach is especially visible when it comes to the delegation of regulatory powers involving a real margin of discretion. It is rooted in a rigid conception of institutional balance within the Community based on case law dating back 45 years. It is blocking any development of European decision-making mechanisms.

Arguing essentially from a legal point of view, supported by arguments from other disciplines, in particular the political sciences and governance theory, we have attempted to re-situate this caselaw in its historic context and in the current reality of institutional balance. We were thus able to affirm that the revised and corrected Meroni doctrine presents no obstacle to the creation of such bodies.

We then analysed the range of means available for effective control of agency activity, which sets limits on their independence and increases their accountability. We concluded that this regulatory whole could establish and ensure bodies that not only respected the institutional balance, but were also capable of revitalising it, via a clearer and more visible division of powers, and keeping up with its development, by introducing participation and cooperation, not only between the existing institutions, but also between them and emerging players, such as networks of parties affected by Community regulation.

We were thus able to argue that the involvement of such agencies in a decision-making process subject to operational rules and tough but justified judicial review means better protection for the rights of European citizens. At the same time, it can raise the quality of public debate on the main European issues.

We also argued that the operation of agencies contributes to better management of the scientific and technical expertise required in modern rulemaking procedures.

Generally speaking, a model of a European regulatory agency based on these principles is not only feasible, but also highly desirable, since it can significantly help to modernise Community governance and to improve governance worldwide.

While I hope they are convincing, legal/political arguments do not of course suffice to take this step. What is required is strong political determination on the part of the Member States and all the European Institutions, giving rise to a new administrative and regulatory culture. This will not be easy since all involved display a curious tendency to believe that they will lose out: the Commission, since it will have to give up some of its decision-making prerogatives, and the Council, since it will no longer have direct control (via the committee procedure) over the same part of regulatory activity.

The European Parliament will perhaps be the only player to be more open to this possibility, in view of its relative absence from implementing procedures, although all the Institutions would still need to be persuaded not to attempt (in return) to interfere in the day-to-day management of these new bodies, thus avoiding the temptation to micro-manage, which is well known to be detrimental to the smooth operation of agencies. However, I consider this fear, shared by the Community executive and legislative powers, to constitute a further argument in support of the necessity of the operation.

Nonetheless, I cannot be excessively optimistic that these changes will come about rapidly. Since the issue, rightly or wrongly, has constitutional implications, resistance will be strong. Hence the usefulness of putting forward two interim proposals.

Until the logjam is broken (whether or not by an amendment to the Treaty), the Commission could follow one or both of two alternatives:

a) Identify the areas requiring decentralised regulation and entrust them to independent offices within its own administration.

I dare to hope that this would pose no major problems. On the contrary, such an approach would have a number of advantages: it would be an intramural version and a small-scale model of what should become Europe's regulatory landscape in the 21st century. It could have an educational dimension, removing existing prejudices from people's minds. This would make the transition to a real system of regulatory agencies much easier.

b) Propose and have adopted the European APA and apply it in full to current committee procedures.249

This poses no problems in the light of the Treaty and could have the positive effect of obliging the Commission to forward proposals for measures not only to Parliament but to the public by publishing them in the Official Journal, with an invitation to submit comments to which it would have to reply, without being bound by them in terms of the outcome. The Council would have the same obligations, if, after discussions in the committee, it decided to modify the content of the Commission's proposal. Interested groups would thus be able to participate in the administrative procedure, which would allow them first, to express their ideas, and second, to bring informed actions before the ECJ for infringement of essential procedural requirements (under the APA)250 and for manifest error of appraisal (minimum check on legality) if they are directly and individually affected. It goes without saying that they could always contest the substance before the national courts after the adoption of the implementing measures.

The committee procedure would have everything to gain in terms of credibility, as would Community regulation.

The combined proposal would consist in setting up specialised offices and applying the European APA to them. This would circumvent the constitutional problem, simplifying and enhancing the regulatory process. The transition to a fullyfledged system of agencies would become even easier. This would form an interim system allowing attitudes to change with a view to introducing the definitive solution.251

Finally, the existence of a central European authority for the adoption, implementation and enforcement of regulatory commitments in certain areas is perhaps more important than the location of this authority. It is essential that agencies should exist; inside or outside the Commission is secondary. In this respect, the proposal of a European network of national regulators must be further explored.252 It is a simple formula, not presupposing any delegation of authority and consequently without any institutional implications. It has also the advantage of being operational in all the cases. It responds to the necessity of an europeanization of the regulatory process, without any centralization movement.

To link up with the premises set out at the very beginning of this paper, let us go back over them again. The EU has an unwritten constitution in the form of the Treaties and the Community method born of their application. It is an original creation, which is both noble and functional; noble, because adherence to its philosophy is voluntary, and functional, because it has generated a vast and successful integration process. It must be preserved and adapted to new realities. The process of regulation is one such area that requires adaptation. There are others that the IGC will attempt to resolve with a view to enlargement. There are still others that the White Paper on governance will highlight, including the crucial problem, connected with this paper, of opening the EU to its citizens and improving public dialogue. A number of proposals are already on the table. They should gradually be implemented, beginning with the easiest to introduce and moving on to the more difficult, which will require an amendment of the Treaties.

For all these reasons, I would be happy if these considerations could make a modest contribution to the current debate, all the more so if all involved could agree that the EU's Institutionsneed not only an administrative facelift to move on, but also far-reaching structural changes.

Cambridge, Winter 2000-2001. Xénophon A. Yataganas.

248 It is even preferable, because a special treaty provision may introduce other undesirable inflexibilities in the overall decisionmaking process. I thank Pr. J.H.Weiler to point me out this particular danger.

249 A similar proposal already exists: F. Bignami: The administrative State..., op. cit., in fine, section VIII: "Proposal for notice and comment in the Community".

250 Which will de facto open up the Court under Article 230, since individual and direct interest is much easier to prove where compliance with procedural requirements is concerned.

251 Nevertheless, I must accept that imposing a havy control mecanism to not independent entities could be counterproductif. The control measures cited before concern really independent agencies disposing a certain margin of discretionnary power.

252 R.Dehousse: Les avantages et les inconvénients..., cited unpublished paper.



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