Harmonisation and European Integration in Times of Crisis

Abstract

Globalisation, generally, and European integration, more specifically, have led to calls for the minimisation of legal diversity which can result in transaction costs and the lack of level-playing field for cross-border actors. One of the prevailing methods to achieve such level-playing field is legal harmonisation.

In the European Union in particular, harmonisation serves as a key tool for the integration of the internal market. The rationale behind such approach is that the European Union would be more appealing to external economic actors and investors if they only had to tackle one regime, instead of twenty-eight (one supranational and twenty-seven national) different ones. It is also argued that disparities between national legal systems create obstacles to the proper functioning of the internal market by producing competitive advantages for some actors with cross-border activities and by deterring foreign investment. It is thus not surprising that legal harmonisation has been at the top of the European institutions since the creation of the European Union.

However, legal harmonisation is not without its challenges. Although on the one hand, integrationists argue that European integration has achieved seminar milestones since the inception of the European Union—Europe has enjoyed the longest period of peace in its history; the European Union is one of the world’s most prosperous marketplaces; one of the largest trading entities; and an important source and recipient of foreign direct investment—Eurosceptics have claimed, on the other hand, that European integration has weakened national sovereignties, resulted in a lack of accountability and transparency on behalf of the European institutions, and that it operates from a circle of out-of-touch technocratic elites.

These challenges have been exacerbated by the multi-faceted crisis which has been hitting the European Union for the last decade or so, contributing to a politicisation of European integration and an increasing Eurosceptic mobilisation across borders. One of the main issues with the rise in Euroscepticism is that it questions the legitimacy of the European Union and the authority of the European institutions. Member States are reluctant to embrace further integration, including by means of harmonisation, accused of being the product of private legislators, heavily influenced by lobbying groups seeking to promote their own economic interests and working in an environment of scant accountability. Further, in times of crises, Member States tend to fall back on state-centric solutions, rather than pursuing common, coordinated policies to tackle these crises.

The United Kingdom’s vote to leave the European Union in 2016, the COVID-19 pandemic, as well as the energy crisis, mark the culmination of these tensions; the European Union is currently at a crossroads in the history of its integration. For the first time, it is witnessing direct disintegration. This chapter discusses the role that legal harmonisation can play in the convergence of legal systems in times of crises. It first determines whether harmonisation is desirable, before addressing the best approach in times of crises.