Adviser, European Commission, Internal market Directorate-General
Address: European Commission, B-1049 Brussels, Belgium
E-mail: Auke.Haagsma@cec.eu.int

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In a mere fifty years the European Union has changed the political and economic landscapes of the old continent beyond belief. Where earlier attempts to bring about such revolutionary change in Europe always involved the – often massive – use of military power, the EU used none of this. The only instruments used were common institutions and the legal instruments they created. Already in the early stages of the process Community law played a very important role, in particular thanks to its main defender, the European Court of Justice. Without the ECJ case-law on "supremacy" and "direct effect" the EU would almost certainly have remained a much more traditional international organisation.

Supremacy and direct effect allow citizens to enforce rights granted by EU law against their own national authorities. One would expect that this made MS governments, who make up one of the two "chambers" of the EU legislature, reluctant to adopt further EU instruments which would create rights for citizens to enforce against them. Originally this was true of course and MS governments were indeed worried about the combined effect which these two concepts had on their powers under national law. However, gradually they came to appreciate that this powerful EU law also offered important advantages for them to bring about economic and other changes in their own countries, which would have been much harder or even impossible otherwise⁽¹⁾.

Rather than a by-product, such economic and other changes are an essential part of the EU's "delivery system". Indeed, rules alone cannot bring economic benefits. Such benefits are expected to come from the increased competition and the more efficient use of scarce resources which the single market in the widest sense is to bring about. It is therefore a combination of actions by public actors (the "state") and by economic actors (the "market") which helps achieve the EU's overall objectives as they are formulated in Art. 2 of the EC Treaty.

How much one needs of the one (the state) and how much of the other (the market) varies depending on the circumstances. In general one can say that if important changes in the economy or elsewhere are sought, more "state" is needed. This means clear, specific and probably fairly detailed rules as well as an active enforcement policy. Once change has set in, there will be less need for such strict state intervention and more can be left to the market. The state can then limit itself to more broadly formulated rules and intervene only to correct the more serious infringements.

The right relationship between the state and the market depends also on culturally based factors, however. Five such factors or "dimensions" of national cultures were recognized by Hofstede⁽²⁾. One of these is the degree to which "members" of a society tolerate uncertainty. The impact this has on the "state" is illustrated by the following examples:

According to Hofstede nation-states, especially those which have existed for some time, are characterised by a common culture⁽⁴⁾. This culture determines in part the most appropriate mix of "state" and "market" to achieve certain public goals. The EU is still very recent and has not yet had the time necessary to develop a common culture. Such a common EU culture is further hampered by different languages, educational and political systems and by the absence of more symbolic and emotional things like EU representation in high profile sports events. Moreover, these cultural differences between MS within the EU are almost as big as one will find anywhere in the world. Indeed, if one combines the "uncertainty avoidance" dimension with the degree to which societies are individualistic or more collectivist one finds the Nordic countries, the Netherlands, the UK and Ireland on one end of the spectrum (weak uncertainty avoidance and individualist) and countries such as Greece and Portugal on the other (strong uncertainty avoidance and collectivist).

Clearly such important differences must have a bearing on what constitutes the right mix of "state" and "market" in EU policy measures. Where in some MS citizens would want a large amount of state intervention (detailed rules and strict enforcement), in other MS the desired result would be best achieved if more was left to the market. Although this would call for solutions which take into account cultural differences⁽⁵⁾, the EU has traditionally favoured common solutions. Such one-size-fits-all solutions will almost certainly not work in the same manner throughout the EU, however. A very limited number of instruments offer therefore two or three alternative ways of solving a problem. Sometimes the instrument even admits that this is done to take into account differences between MS⁽⁶⁾.

Although solutions are therefore occasionally tailored to fit different cultures, one wonders why this is not done more often, given that cultural differences between MS are so important. The main reason for this is once again cultural. Citizens from countries with low uncertainty avoidance will be rather tolerant towards differentiated solutions. However, citizens from countries with high uncertainty avoidance will not be quite so flexible. These MS are therefore often in favour of full harmonisation of all rules and regulations which citizens moving across the EU or taking part in transactions in other MS are faced with.

A good example of this can be found in the contract law area. On 11 July 2001 the Commission issued a Communication on European Contract Law, in which it asked, inter alia, whether there were specific problems for the functioning of the internal market resulting from the co-existence of different national contract laws⁽⁷⁾. A group of academics primarily from Germany and Austria, two countries with high uncertainty avoidance, answered by pointing out that different contract laws created "anxieties" in the minds of businesses, which anxieties acted as important obstacles to free circulation. Moreover the group stated that such obstacles existed even when "the suspicion that foreign law on a given point will be significantly different is unfounded or exaggerated"⁽⁸⁾.

The use of the word "anxiety" and the absence of any explanation of how this could actually constitute an obstacle to free circulation show the extent to which this is based on (probably strongly felt) emotions rather than objective analysis. It is therefore also difficult for citizens from MS with very different cultures to understand the arguments used to underpin the far-reaching conclusions.

In such cases of very different assessments of the underlying problem and widely varying perceptions of the right mix of "state" and "market" from (culturally) different MS, the European Institutions will have to find middle ground. The end-result will almost certainly satisfy no-one entirely, but is the best one can hope for, as long as Europe has not been able to reach a higher degree of cultural integration.

Such further integration can only benefit from cross-cultural studies and discussions. It is also for this reason that one can only warmly welcome the initiative taken by the Durham European Law Institute to organise an annual conference of post-graduate researchers. At the conference they can discuss their papers with fellow researchers, teachers and other experts from across the EU. The theme of this year's conference, the European Citizen between the market and the state, yielded a number of high quality papers, two of which are published hereinafter.

Both papers examine certain aspects of EU citizenship. Izolda Bulvinaite focuses on the scope of the rights created by the inclusion of a specific article on citizenship in the EC Treaty. She comes to the conclusion that the ECJ has indeed given the provision an added-value beyond the mere restatement of previously existing rights. Hélene Oger concludes that there is a need to revise the concept of citizenship and to award full citizens' rights to third-country nationals who are "habitually residing" in the EU in order to guarantee them equal treatment compared with EU citizens.

In addition to these two papers a number of others were also presented at the conference. All of a generally high level they gave rise to interesting and very enlightening discussions. We can only hope therefore that the Durham European Law Institute's post-graduate conferences will become a tradition for many years to come.

^[*] The views presented are the sole responsibility of the author and do not necessarily coincide with those of the Commission.
⁽¹⁾ See for a description of the way in which the concepts of supremacy and direct effect led to an increased emphasis on the legislative agenda in the EU, inter alia in the 1992 Programme: Auke Haagsma, Reforming the EU: Promoting Involvement and Efficiency in the European Union in "The future of the European Union: Unity in Diversity" edited by Peter G. Xuereb, Malta, 2002, pp. 12-43 (http://home.um.edu.mt/edrc/publications/the_future.html)
⁽²⁾ In ground-breaking research which started in the late 1960s Geert Hofstede examined national cultures and their effects on organisations. Although the research was largely carried out in business organisations, including in particular in large multinational companies including in particular IBM, Prof. Hofstede's conclusions are widely considered to be relevant for governmental organisations as well. The original research was published in Geert Hofstede, Culture's Consequences : International Differences in Work-related Values, Beverly Hills, Cal. USA, Sage Publications, 1980. It was further enriched, developed and published in a more popular version in Hofstede's Cultures and organizations : Intercultural Cooperation and its Importance for survival – Software of the mind. Harper Collins, London, 1991.
⁽³⁾ From Hofstede [1991], p. 126.
⁽⁴⁾ Ibid. pp. 11 and 12.
⁽⁵⁾ The treaty would seem to allow the adoption of flexible solutions. Thus directives which are used primarily where MS have to incorporate rules of EU origin in their national regulatory and administrative system, are "binding, as to the result to be achieved, upon each Member State to which it is addressed". There is no requirement, therefore that directives are addressed to all MS and different solutions can be provided for different MS or groups of them. (Art. 249 EC Treaty http://europa.eu.int/eur-lex/en/treaties/dat/C_2002325EN.003301.html).
⁽⁶⁾ Thus Directive 92/13/EEC (review procedures in public procurement in the water, energy, transport and telecommunications sectors contains the following preambular language: "Whereas account must be taken of the specific nature of certain legal orders by authorizing the Member States to choose between the introduction of different powers for the review bodies which have equivalent effects". Differences between "legal orders" are often the result of cultural differences, of course (see http://europa.eu.int/eur-lex/en/consleg/pdf/1992/en_1992L0013_do_001.pdf)
⁽⁷⁾ Communication from the Commission to the Council and the European Parliament on European Contract Law, document COM(2001) 398 final, of 11 July 2001, pp. 17 and 18. http://europa.eu.int/comm/consumers/cons_int/safe_shop/fair_bus_pract/cont_law/cont_law_02_en.pdf
⁽⁸⁾ http://europa.eu.int/comm/consumers/cons_int/safe_shop/fair_bus_pract/cont_law/comments/5.23.pdf