A New Phase of European Integration: Organised Capitalisms in Post-Ricardian Europe

Abstract

In the past, economic integration in Europe was largely compatible with the preservation of different national varieties of capitalism. While product market integration intensified competition, member states could build on and foster their respective comparative advantage. Today, this no longer unequivocally holds true. This article contends that a new, 'post-Ricardian' phase of European integration has emerged in which the Commission's and the European Court of Justice's (ECJ's) attempts to promote economic integration systematically challenge the institutions of organised capitalism. It demonstrates this by discussing recent disputes over the Services Directive, the Takeover Directive, and company law. In the current phase of European integration, the Commission's and the ECJ's liberalisation attempts either transform the institutional foundations on which some of the member states' economic systems rely or they create political resistance to an extent that challenges the viability of the European project.This article starts from two separate but arguably linked observations. First, the aims and strategies of European integration have changed over the last 10-15 years. We will show that supranational actors no longer just eliminate discrimination against foreign companies. Going well beyond merely intensifying competition between national varieties of capitalism, recent directives put forward by the European Commission and decisions of the European Court of Justice (ECJ) aim at transforming national institutions and bringing them in line with the Anglo-Saxon model of capitalism. Market-making no longer implies enforcement of non-discrimination but the abolition of potential institutional impediments to free markets. Hence, we speak of a new, 'post-Ricardian' phase of European integration that threatens the diversity of 'institutional foundations of comparative advantage ' (Hall and Soskice 2001).

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