Integration processes and the European Union: some theoretical implications

This paper examines the extent to which a neo-functional or intergovernmental process may be at work in the evolving European Union (EU). Indeed, it investigates two models of governance that relate to these theories to allow an understanding of decision-making procedures at the EU level. An analysis of a service sector (the life insurance industry) has been undertaken in respect of its relationships with the EU decision-making institutions and it is considered that through self-interest, national life insurance industries attempt to create a Single European Market (SEM) in their own image. Following a discussion of the theoretical implications of neofunctionalism, intergovernmentalism, state-centric and multi-level governance the paper undertakes a comparative analysis of the Member States' regulatory regimes and combines this study with the results of a survey conducted in 1994 to create a regulation matrix: this gives an understanding of different regulatory environments in twelve Member States. Secondly, the survey results illustrate the separate kinds of regulatory environments that Member States wanted the single market to be and offers an explanation of how different understandings of legislation and regulatory structures may have been compromised. Additionally, a second survey and a number of interviews indicate decision-making procedures at the EU level and these are illustrated through a decision-making model. Finally, the extent of neo-functional and intergovernmental processes are posited in relation to the findings. In theoretical terms the paper identifies aspects of both neo-functionalism and intergovernmentalism. Indeed, it considers that multi-level governance is the predominant means of decision-making at the EU level. On a practical level, the paper indicates implications for the financial services sector in relation to participation in the EU decision-making process. Fundamentally, the paper identifies a process in a situation that relates to financial services and tentatively makes generalisations in respect of other industries within the financial services sector