Constitutional agenda-setting through discretion in rule interpretation: why the European Parliament won at Amsterdam

It is a widely accepted that the 1999 Treaty of Amsterdam significantly increased the powers of the European Parliament (EP). The critical question, however, is why the European Union (EU) governments did this. I argue, contrary to existing explanations, that these changes came about because the EP was a ‘constitutional agenda-setter’. The rules in the EU Treaty, as established at Maastricht, were incomplete contracts, and the EU governments had imperfect information about the precise operation of the Treaty. As a result, the EP was able to re-interpret these rules to its advantage and threaten not to co-operate with the governments unless they accepted the EP's interpretations. The article shows how this process of discretion, interpretation and acceptance worked in the two main areas of EP power: in the legislative process (in the reform of the co-decision procedure), and in executive appointment (in the reform of the Commission investiture procedure). The article concludes that ‘agenda-setting through discretion in rule interpretation’ is a common story in the development of the powers of parliaments, both at the domestic and EU levels