Prior to the end of the Cold War, Europe’s security and defence depended critically on the United States’ commitment to NATO. The EU, under its successive guises, had no role whatsoever in this policy area. This was in part because most EU member states preferred the Union – as a self-styled ‘civilian actor’ – not to dabble in matters of war and peace; and in part because ‘Atlanticist’ countries like the UK refused to allow it. All this changed in 1989 with the fall of the Berlin Wall (see Box 16.4), for three main reasons. First, Europe ceased, in the 1990s, to be at the centre of the US radar screen. Washington had new and more important demons to chase in the Middle East and Asia. Second, the EU was gradually emerging as a global player and was eager to emerge as a foreign and security policy actor in its own right. Third, eruptions were occurring all around the EU’s periphery, from the Balkans to the Black Sea and from the Bosporus to the Atlantic. The need to engage in ‘crisis management’ in the neighbourhood became compelling. The US saw no reason why such a task should be assumed by Americans. A European agent was required to step up to the plate.

‘Schengen’ refers to an agreement signed between five member states of the EC – the Benelux countries, France and Germany – in June 1985 in the Luxembourgish town of the same name. The 1985 Schengen agreement and its implementing convention signed in June 1990 (the Convention Implementing the Schengen Agreement, hearafter CISA) are best known for establishing the Schengen area, where systematic, internal border controls between participating countries have been removed. For the best part of the 1990s, Schengen operated as an intergovernmental framework that involved EU member state representatives, but outside of the Community legal order and Union institutions. This situation came to an end with the entry into force of the Treaty of Amsterdam on 1 May 1999, which incorporated the Schengen framework in EU law and policy.

Agriculture is one of the oldest and most developed policy domains in the EU. Approximately 40 per cent of the EU budget is spent on the CAP. Current EU farm policy is very encompassing, affecting all types of agricultural issues ranging from production quota to food safety and animal welfare. Due to agriculture’s increasing multidimensional character – based on its interconnectedness with trade, environmental, development and social policies – a multitude of actors now mobilises and seeks access to decision makers when CAP reforms are negotiated. Despite the enhanced involvement of non-agricultural actors, an important point of critique on the CAP still focuses on the environmentally polluting effects of the intensive agriculture that it supports. Although the Commission has been trying to give the CAP a greener image for more than a decade, its efforts have only had mixed results.

Adopted by 152 countries on 19 December 2018, the Global Compact for Safe, Orderly and Regular Migration is the first meaningful attempt to organise global migration governance and to diminish the negative consequences of restrictive migration policies by calling explicitly for the creation of humanitarian visas and improved migration statistics and encouraging stakeholders and in particular states to respect migrants’ rights. It also makes international cooperation between countries of origin, transit and destination a central pillar of a global strategy.

This chapter will investigate the decision-making structure of the EU. The EU is organised around supranational political institutions (such as the Commission and the EP) and political institutions representing member state governments (such as the Council of Ministers and the European Council). Certainly, other institutions affect the decision-making process, such as the ECJ or the ECB. However, they are technical institutions, whose functioning and deliberations are determined by their intrinsic rules rather than by political considerations. There are several interpretations of the EU decision-making structure. Börzel (2016: 12) posits that ‘the EU’s governance has evolved over time developing different varieties of inter- and transgovernmental negotiation and regulatory competition in the shadow of supranational hierarchy’. Wallace and Reh (2015) identified five regularised policy-making patterns (Community method, regulatory method, distributional model, intense transgovernmentalism and policy coordination) used for dealing with the various policy realms of the EU. Research on interstitial policies detected additional policy micro-patterns, although temporally bounded. This variety is generally reduced to four distinct patterns of taking decisions in the EU: Community method, centralised regulation, policy coordination and intergovernmental method. This Chapter regroups the four patterns into two basic decision-making regimes as a heuristic device for identifying the fundamental decision-making differentiation institutionalised within the EU. They are defined as decision-making regimes because they constitute a stable (although flexible) combination of rules and actors. The chapter assumes that the EU, since 1992, has ended up consolidating two decision-making regimes: supranational (inclusive of the Community method and centralised regulation) and intergovernmental (inclusive of policy coordination and intergovernmental method) which are stable decision-making regimes and not only transitory forms of intergovernmental and transgovernmental governance patterns or micro-decision-making patterns changing over time.

The objective of social policy is to limit inequalities in resource distribution within societies. On the one hand, it consists in regulating markets and working conditions; on the other, it uses redistributive mechanisms (i.e. cash transfers and services) to offset contrast in income distribution and tackle poverty. The EU exhibits the lowest level of inequalities compared to countries around the globe, including the United States. However, recent studies also show that, in some respects, the EU falls short of its promise of welfare and social cohesion for all. While general levels of income have been rising continuously over the past decades, inequalities among individuals have only declined slowly. When looking at the Gini coefficient, the most common indicator for measuring inequalities, it appears that the decrease of inequalities has come to a stalemate in the EU-27, with the euro area even displaying an increase of the index since 2008 (while the US has known a sharper increase of inequalities, starting from a significantly higher level). Moreover, the catch-up process of the poorest regions in terms of living standards has not taken place to the expected extent. In some regions of Southern and Eastern Europe or the Baltic countries, the recession has meant a severe degradation of welfare for many people. Today, the EU still exhibits a clear contrast between a wealthy core of Continental and Northern countries versus the poorest peripheries in the south and east of the continent (see chapter 17).

Having an LoLR to the financial system and the state is one of the essential preconditions of economic stability (see Box 9.1). Since the late nineteenth century the LoLR function was played by national central banks acting as custodians of both national currencies and domestic monetary systems. Since central banks do not have to make profits and since they cannot have liquidity problems with their own money, they can create as much money as they want within their mandates to keep prices stable. In other words, they issue the ‘last’ money and are therefore uniquely well-positioned to address systemic liquidity problems. Moreover, even under normal conditions, financial institutions may need to borrow overnight from the central bank at a low ‘administered’ rate (the so-called discount window) whenever they experience short-term liquidity shortfalls and are in need of a quick cash infusion.

The nature of the EU has always been uncertain. Depending on the contexts, it has oscillated between a form of intergovernmental economic cooperation and a sui generis political supranational construction. While proponents of intergovernmentalism see the EU as an organisation that brings together nation states with the aim of increased economic cooperation, promoters of the EU as a polity conceive it as a union where the bonds between the peoples of Europe beyond the nation states are strengthened. These contrasting visions have shaped the integration process over time. This satisfied both federalists and intergovernmentalists as the outcomes of integration ‘proved to be compatible with analyses from each of these perspectives’ (Bellamy and Castiglione, 2000: 67). However, the issue of what the EU is and what can be expected from it remains a matter of heightened political debate and academic controversies. Today we know that the EU is more than an intergovernmental form of economic cooperation. However, despite the development of the political Union over time, the EU is not a state as it lacks a demos and a shared identity.