In recent years, the European Court of Justice (ECJ) has extended the scope of the four fundamental freedoms to politically and economically highly sensitive areas such as the right to strike and the regulation of working conditions of posted workers. This article analyses the domestic impact of two of the most controversial judgments -Laval (C-341/05) and Rüffert (C-346/06) -in Denmark, Sweden and Germany. In order to explain the different outcomes of the national adaptation processes, the article connects the literature on judicial Europeanization with political economy perspectives on the role of employers in economic and social regulation. The findings show that the differences between the cases can be traced back to different preferences of employers towards wage competition. The reason for this is that the ECJ's case law has shifted the balance of power between labour and capital in the domestic arenas in favour of business.

This paper analyzes how the apparently merely technical introduction of reversed qualified majority voting for the excessive deficit procedure included in the Six Pack and the Fiscal Compact shifts not only the institutional balance between the European Commission and the Member States but also the relationship between liberalization and social regulation in the EU. In bringing together institutional analysis and a political economy perspective, the paper shows how the strengthening of the Commission's discretionary decision‐making authority in a context of intergovernmental power imbalances between debtor and creditor states extends the asymmetry between market‐making and market‐correction to the area of political decision‐making. In consequence, economic and social policies are subordinated to the primacy of austerity.

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In this article, I argue that the European financial market integration cannot be understood without the European Commission's gradual enforcement of supranational competition law for financial services. The conflict over the liberalization of public banks in Germany demonstrates how the Directorate General for Competition (DG COMP) deepened financial market integration through legal proceedings without the participation of the Council of Ministers. How could DG COMP prevail over the fierce resistance of Germany even though member states never intended for European law to have enough leverage to alter core elements of national financial systems? The article focuses on DG COMP's capacities for strategic action. DG COMP was able to enforce European competition rules for financial services, skilfully combining its legal competences with political strategies. The case illustrates that the regulatory integration of financial services in the EU is much more driven by supranational institutions than assumed by the bulk of the literature.