Europe in the throes.

Author:Pignal, Stanley


BRUSSELS--In a detailed three-page memo published nearly two decades ago, an unnamed European Union official set about codifying just what constitutes a good banana. Few could have predicted that "Commission Regulation (EC) No 2257/94 of 16 September 1994 laying down quality standards for bananas" would ever attract much outside attention. Even by the lexicon of regulatory documents, it is a turgid read. It lays down technical specifications for fruit imported or grown in the EU: their size ("minimum 14 cm"), how their crown is cut ("not beveled or torn") and their shape ("free from abnormal curvature"). The blameless Eurocrat behind it could not have guessed that his proposals, which became law the following year, would morph into a cause celebre among detractors of the European Union.

British tabloids led the charge, claiming the EU had become so regulation-crazed it even had an edict about "bendy bananas." They used it as an illustration of how unelected bureaucrats were intent on burdening citizens in the EU's 27 member states with unnecessary red tape. Even the banana rule's partial repeal in 2008, part of a general amnesty for deformed fruit and vegetables, did little to quell the discontent of those who see the EU as a meddling force sapping national sovereignty. Periodically, the Commission still tries to fend off those rehashing the "bendy bananas" by explaining that setting such standards is the norm in all countries and essential for the smooth functioning of international trade. It is to no avail.

Laying aside the synthetic indignation of the British tabloids, the episode was among the first to highlight the creeping regulatory power of the European Union. Six decades of integration have turned Brussels, the home of the EU's major institutions, into the principal drafting venue for laws that affect the bloc's 500 million citizens. The historic shift towards monolithic, pan-European power--and it truly is historic has continued even as the EU finds itself in the throes of a debt crisis that could call into question its very survival. From the environment to finance, anti-trust legislation to animal welfare, the union is increasingly governed by a single set of standards, which all too often are unevenly enforced or implemented. Quietly, EU norms have displaced national ones in a way even its own citizens do not always realize.

It is difficult to convey the scale of the EU's regulatory ambitions. There is no nook or cranny of human activity in Europe that is not affected by it. As a gauge of the sheer amount of material that comes out of Brussels, consider this: Every year, the EU prints between 700 and 800 editions of its Official Journal, which compiles the decisions of the EU. The bulk of the Journal is dedicated to legislation that member states agree to observe. The physical copy runs to around 34,000 pages a year, taking up more than 13 feet of shelf space. And that is only for the English version. There are 23 official languages of the EU, from Slovak to Estonian to Portuguese to Irish and so on. Each gets a full translation on a daily basis.

A recent issue of the Journal, picked at random, gives a flavor of the scope. In 38 pages of text and some annexes, it describes how the EU has decided to increase the wages and pensions of EU employees working in Estonia to account for inflation; adjust fishing quotas in the Black Sea and nearby areas; approve the fungicide azoxystrobin and several related compounds for use in the EU; set the amount of aid for dried fodder at 33 [euro] ($43.50) per metric ton; tweak the standard import values for determining the entry price of certain fruits and vegetables; fix the export refunds on milk products, eggs, and pork; consent to a new fingerprinting scheme in the Czech Republic; approve several new bodies to certify sustainability in the biofuels sector; and call on member states to ensure all citizens are given access to basic bank accounts. That was the list for a single day--July 21, 2011--by no means an exceptional day.

"I would estimate that 60 to 70 percent of regulations in Europe today come either directly from the EU, or are measures taken in response to EU rules," says Philippe De Buck, director general of BusinessEurope, a powerful employers' lobby based in Brussels. Others put the figure closer to 80 percent. In all manners of policy, rules that once would have been crafted at the national level are now created in Brussels.


The reason for the growing regulatory clout of the EU, say policymakers, business groups, and lobbyists, is linked to the growing influence of the European Union. Half a dozen treaties since its inception in 1957, particularly the Lisbon Treaty of 2009, have bolstered the EU's power in fields from foreign affairs to international trade. In many areas of policy, power has trickled upward from the national to the EU level. Of course, some powers, most notably over fiscal policy, have remained in the hands of governments, a hard reality which has caused many of the problems the Eurozone is now experiencing. The process of governments granting the EU more authority continues to come in waves. The strongest, which took shape in the mid-1980s, resulted in the gradual creation of a single market for goods and services in the then-12 countries of the EU.

The single market acts as a sort of international trade pact on steroids, eliminating non-tariff barriers stemming from divergent local regulations. So any attempt by national governments to come up with home-grown regulation is now interpreted as a de facto barrier to intra-EU trade, thus breaching the spirit, if not the letter, of the single market.

For EU countries, a single market has offered something akin to regulatory economies of scale. Actions once taken by 27 countries individually can now be done at the European level instead. Take, for instance, the regulation of chemicals--hardly a matter of high politics for any country, but a requirement nonetheless. In the past, each member state had its own regulations, which were broadly similar but could vary in important respects. This is problematic for a single market. If you can use a given chemical in Germany but not in Austria, it becomes necessary to police the import of all chemicals crossing the border. The EU rationale is that this is undesirable, and so it opted to harmonize the chemical laws instead. In 2005, the sweeping REACH regulation (short for "Registration, Evaluation, Authorization and Restriction of Chemicals") did exactly this, building on previous EU rules.

Instinctively, this new tier of government, layered atop Europe's nanny states, would appear to be an unwelcome added burden for businesses operating on the continent. The European Union is renowned for its snail-paced, indecisive decision-making, as the Eurozone crisis has shown. In fact, European-level regulation is overwhelmingly favored by businesses. Their rationale is that even though EU regulations are sometimes cumbersome and onerous, it is inevitably better to have one set of rules applied to the bloc than 27 divergent regulations at national levels. This is true even if the standardized rules are more stringent than some of the...

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