The Governance System of the European Union

The European governance is an institutional arrangement enabling the cooperation and the competition among the states, the individuals and the pressure groups looking to maximize their welfare. The European governance system is a multi-level non-hierarchical structure, and authority is shared among the supranational bodies, as well as among the latter and the Member States. The structure of the European governance system is influenced by the need to achieve a political balance among the stakeholders, in the environment of a permanent conflict among the public interest regulations and the “captive” regulations (George J. Stigler ), the latter being determined by the rent extraction rent seeking. In this short analysis I describe the European governance, taking into account the policy-making framework under, “Two-pack”, “Sixpack”, and the Treaty on Stability, Coordination and Governance in the Economic and Monetary Union (TSCG) that increases the power of the supranational bodies . For this purpose I embarked on two different approaches: the economic theory of regulation (G. Stigler, G. Tullock, S. Peltzman, R.Posner) and the normative theories on power distribution. For the time being there is no bridge between these two theories. However, in the specialised literature, the approach to European governance system is mainly based on the normative theories on power distribution (the integration theories). The economic theory of regulation expresses the economic rationale of the decisions made by the EU supranational bodies and by the Member States at national level. This theory also helps the understanding of the behaviour at the supranational level of certain states whenever they negotiate economic policies with regard to currency, energy, tax coordination). For this reason, the economic theory of regulation is the framework for adjust the inefficient institutions3 whereas identifies solutions for public policies. The normative theories on power distribution emphasize how the competencies are shared among the supranational bodies and the EU Member States, as well as inside them. These theories are important mostly to emphasize how the power distribution has an influence on resource allocation and which group controls the resources allocation. I included here both the neo-intergovernmentalism and the neo-functionalism dealt with by the specialised literature as integration theories, along with the competitive federalism.