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European Politics and Economy

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This has forced political actors in Europe to stake out positions on two fundamental issues: the structure of political authority in Europe, and the role of the state — at whatever territorial level — in the economy. To what extent should market activity be regulated at the European level, and to what extent — if at all — should the European Union redistribute from rich to poor In short, what form of capitalism do Europeans want
The institutional design of current cohesion policy has broad-ranging implications for EU governance. At the meso-level, it promotes a change in governance from public steering of social processes to self-governing networks of public and private actors. Public authorities provide the institutional framework that reduces transaction costs and encourages highly organized social subsystems to mobilize indigenous resources (Kohler-Koch 1996, 1998). The result is that authoritative actors at European, national or subnational level are compelled to collaborate with private actors. At the macro-level, the current EU cohesion policy is designed to give shape to a multi-level polity. It opens up intergovernmental bargaining among national governments to other governmental actors, and it upgrades limited collaboration among all these actors to more intensive, and more binding, commitments. This challenges state-centric governance in three ways: European institutions set general rules and co-ordinate. subnational authorities participate in making decisions. and the three parties are in a relationship of mutual dependency rather than hierarchy (Marks, 1996).
From the vantage point of traditional social policy, the objectives of the 1988 reform are modest. For one thing, the reformed EU cohesion policy gives priority to one type of cohesion problem: spatial economic disparities among regions (and to a lesser extent, local areas). Almost no emphasis is put on disparities between social groups and individuals within states, regions or local areas (McAleavey and De Rynck, 1997). Furthermore, the 1988 cohesion policy may actually impede efforts to create EU citizenship, because it supports programs only to the extent that it helps economic functionality or alleviates particular financial needs, and it does not justify cohesion efforts as a social entitlement (Anderson, 1995. McAleavey and De Rynck, 1997). One might, therefore, argue that current cohesion policy is merely the least bad solution in an opportunity structure inhospitable to European social policy.[2] However, the purpose of European regulated capitalism has not been to emulate traditional social policies at European level, but to formulate a viable alternative to European neoliberalism as well as to ineffective national welfare politics (Hooghe and Marks, 1998). From that perspective, the current cohesion policy appears far more effective.
The most influential advocate of European regulated capitalism has been former Commission president Jacques Delors (Delors, 1992. Ross, 1995). Most center-left and, selectively, Christian Democratic parties in Europe have come to support the project, but the coalition also includes trade unionists, environmentalists, local and regional governmental actors, and even certain business representatives atnational and European level.