MANAGERIAL
ASPECTS OF
EUROPEAN
INTEGRATION
Prof. dr. Philippe van Gruisen
,Managerial Aspects of European Integration ____________________________________ 4
Session 1: Introduction _________________________________________________________ 4
Part 1: Introduction to the course ______________________________________________________________ 4
The EU and its member states _______________________________________________________________ 5
Part 2: History of European Integration __________________________________________________________ 6
Two strands of European integration _________________________________________________________ 7
Session 2: institutions _________________________________________________________ 13
Part 1: institutions and procedures ____________________________________________________________ 13
The big-5 institutions ______________________________________________________________________ 13
Legislative process ________________________________________________________________________ 21
Legislative process: the role of national Parliaments _________________________________________ 22
Part II: Distribution of competences and the EU budget _________________________________________ 23
The EU budget: revenues __________________________________________________________________ 24
Session 3&4: Spatial models __________________________________________________ 25
Part I: Introduction to spatial models __________________________________________________________ 25
Key elements _____________________________________________________________________________ 27
The median voter theorem MVT (Black) ______________________________________________________ 32
K-majority voter theorem (KMVT)____________________________________________________________ 41
Part II: Spatial models applied to the EU _______________________________________________________ 44
Theoretical predictions ____________________________________________________________________ 44
Empirical verification ______________________________________________________________________ 51
Session 5: Lobbying ___________________________________________________________ 56
Part I: Principles of effective lobbying __________________________________________________________ 56
Facts on lobbying _________________________________________________________________________ 56
Access ___________________________________________________________________________________ 64
Part II: More on lobbying ______________________________________________________________________ 64
Hiring of former officeholders ______________________________________________________________ 64
A model of interest group formation _________________________________________________________ 66
Session 6: EU Competition Policy ______________________________________________ 69
Part I: Economic implications of European integration __________________________________________ 69
Effect of integration on competition between companies, prices and mark-up __________________ 72
Part II: EU competition policy _________________________________________________________________ 74
Collusion and cartels ______________________________________________________________________ 76
Abuse of dominant position ________________________________________________________________ 79
Mergers __________________________________________________________________________________ 81
State aid _________________________________________________________________________________ 85
Session 7: Internal market _____________________________________________________ 88
Part I: Internal market ________________________________________________________________________ 88
Introduction ______________________________________________________________________________ 88
Free movement of goods __________________________________________________________________ 91
2
, Part II: Internal market _______________________________________________________________________ 98
Free movement of services ________________________________________________________________ 98
Free movement of capital _________________________________________________________________ 100
Free movement of workers ________________________________________________________________ 101
Session 8: Environmental policy ______________________________________________ 110
Part I: EU environmental policy_______________________________________________________________ 110
Article 11 TFEU __________________________________________________________________________ 111
Article 191 TFEU _________________________________________________________________________ 111
Part II: The EU green deal ____________________________________________________________________ 119
EU Climate Law __________________________________________________________________________ 120
The circular economy action plan__________________________________________________________ 120
Farm to fork _____________________________________________________________________________ 121
Fit for 55_________________________________________________________________________________ 122
Session 9: Consumer policy __________________________________________________ 124
Part I: context ______________________________________________________________________________ 124
Why consumer policy? ___________________________________________________________________ 124
Results of a consumer survey _____________________________________________________________ 129
Part II: Consumer policy _____________________________________________________________________ 132
Article 169 TFEU _________________________________________________________________________ 132
Examples _______________________________________________________________________________ 140
General Data Protection Regulation (GDPR) (did this fast) ____________________________________ 141
Session 10: Guest Lecture ____________________________________________________ 144
EU trade policy, why and what _____________________________________________________________ 144
EU Trade Policy: How _____________________________________________________________________ 145
Case ____________________________________________________________________________________ 147
Session 11: Social policy _____________________________________________________ 150
Part I: Social policy _________________________________________________________________________ 150
History __________________________________________________________________________________ 150
What is good public policy? _______________________________________________________________ 154
Articles 151-155 TFEU ____________________________________________________________________ 161
Key directives ____________________________________________________________________________ 167
Topic 12: EU Taxation policy __________________________________________________ 172
Part I: Corporate taxation ____________________________________________________________________ 172
Facts and figures _________________________________________________________________________ 172
Trend over time __________________________________________________________________________ 173
Decision-making _________________________________________________________________________ 173
Part II: Tax policy____________________________________________________________________________ 174
Five important historical measures ________________________________________________________ 174
1. Code of conduct for business taxation ___________________________________________________ 177
Two other important elements_____________________________________________________________ 178
Recent measures ________________________________________________________________________ 180
3
, Managerial Aspects of European Integration
Session 1: Introduction
Part 1: Introduction to the course The environment of business = Market Environment
= Nonmarket Environment
Legislatures
Competitors
The environment of a business consists of a market Customers Company Suppliers
and a nonmarket component: Activists
New entrants
Managerial aspects of European integration 3
● Market component: include the interactions
between firms, suppliers, and customers that are governed by markets and
contracts
● Nonmarket component: composed of the social, political and legal
arrangements that structure interactions outside of (but in conjunction with)
markets and contracts (ex. regulations, laws ..)
Effective management in the market and nonmarket environment is necessary for
superior performance, especially for firms that do business in the European Union. Firms
need to understand both to have a good strategy.
WhyWhy
is isthe EUimportant
the EU important Whyfor
for managers?managers?
is the EU important forWhy
(2) managers? (1) important for managers? (3)
is the EU
EU is a legislative machine
Managerial aspects of European integration 10 Managerial aspects of European integration 11
Managerial aspects of European integration 9
The EU is constantly making new laws and regulations. It produces regulations that
influence which products are built and how business is conducted, not just in the EU but
everywhere in the world. This way the EU has significant power to affect global markets
through its ability to set standards in competition policy, environmental protection, food
safety, protection of privacy …
4
ASPECTS OF
EUROPEAN
INTEGRATION
Prof. dr. Philippe van Gruisen
,Managerial Aspects of European Integration ____________________________________ 4
Session 1: Introduction _________________________________________________________ 4
Part 1: Introduction to the course ______________________________________________________________ 4
The EU and its member states _______________________________________________________________ 5
Part 2: History of European Integration __________________________________________________________ 6
Two strands of European integration _________________________________________________________ 7
Session 2: institutions _________________________________________________________ 13
Part 1: institutions and procedures ____________________________________________________________ 13
The big-5 institutions ______________________________________________________________________ 13
Legislative process ________________________________________________________________________ 21
Legislative process: the role of national Parliaments _________________________________________ 22
Part II: Distribution of competences and the EU budget _________________________________________ 23
The EU budget: revenues __________________________________________________________________ 24
Session 3&4: Spatial models __________________________________________________ 25
Part I: Introduction to spatial models __________________________________________________________ 25
Key elements _____________________________________________________________________________ 27
The median voter theorem MVT (Black) ______________________________________________________ 32
K-majority voter theorem (KMVT)____________________________________________________________ 41
Part II: Spatial models applied to the EU _______________________________________________________ 44
Theoretical predictions ____________________________________________________________________ 44
Empirical verification ______________________________________________________________________ 51
Session 5: Lobbying ___________________________________________________________ 56
Part I: Principles of effective lobbying __________________________________________________________ 56
Facts on lobbying _________________________________________________________________________ 56
Access ___________________________________________________________________________________ 64
Part II: More on lobbying ______________________________________________________________________ 64
Hiring of former officeholders ______________________________________________________________ 64
A model of interest group formation _________________________________________________________ 66
Session 6: EU Competition Policy ______________________________________________ 69
Part I: Economic implications of European integration __________________________________________ 69
Effect of integration on competition between companies, prices and mark-up __________________ 72
Part II: EU competition policy _________________________________________________________________ 74
Collusion and cartels ______________________________________________________________________ 76
Abuse of dominant position ________________________________________________________________ 79
Mergers __________________________________________________________________________________ 81
State aid _________________________________________________________________________________ 85
Session 7: Internal market _____________________________________________________ 88
Part I: Internal market ________________________________________________________________________ 88
Introduction ______________________________________________________________________________ 88
Free movement of goods __________________________________________________________________ 91
2
, Part II: Internal market _______________________________________________________________________ 98
Free movement of services ________________________________________________________________ 98
Free movement of capital _________________________________________________________________ 100
Free movement of workers ________________________________________________________________ 101
Session 8: Environmental policy ______________________________________________ 110
Part I: EU environmental policy_______________________________________________________________ 110
Article 11 TFEU __________________________________________________________________________ 111
Article 191 TFEU _________________________________________________________________________ 111
Part II: The EU green deal ____________________________________________________________________ 119
EU Climate Law __________________________________________________________________________ 120
The circular economy action plan__________________________________________________________ 120
Farm to fork _____________________________________________________________________________ 121
Fit for 55_________________________________________________________________________________ 122
Session 9: Consumer policy __________________________________________________ 124
Part I: context ______________________________________________________________________________ 124
Why consumer policy? ___________________________________________________________________ 124
Results of a consumer survey _____________________________________________________________ 129
Part II: Consumer policy _____________________________________________________________________ 132
Article 169 TFEU _________________________________________________________________________ 132
Examples _______________________________________________________________________________ 140
General Data Protection Regulation (GDPR) (did this fast) ____________________________________ 141
Session 10: Guest Lecture ____________________________________________________ 144
EU trade policy, why and what _____________________________________________________________ 144
EU Trade Policy: How _____________________________________________________________________ 145
Case ____________________________________________________________________________________ 147
Session 11: Social policy _____________________________________________________ 150
Part I: Social policy _________________________________________________________________________ 150
History __________________________________________________________________________________ 150
What is good public policy? _______________________________________________________________ 154
Articles 151-155 TFEU ____________________________________________________________________ 161
Key directives ____________________________________________________________________________ 167
Topic 12: EU Taxation policy __________________________________________________ 172
Part I: Corporate taxation ____________________________________________________________________ 172
Facts and figures _________________________________________________________________________ 172
Trend over time __________________________________________________________________________ 173
Decision-making _________________________________________________________________________ 173
Part II: Tax policy____________________________________________________________________________ 174
Five important historical measures ________________________________________________________ 174
1. Code of conduct for business taxation ___________________________________________________ 177
Two other important elements_____________________________________________________________ 178
Recent measures ________________________________________________________________________ 180
3
, Managerial Aspects of European Integration
Session 1: Introduction
Part 1: Introduction to the course The environment of business = Market Environment
= Nonmarket Environment
Legislatures
Competitors
The environment of a business consists of a market Customers Company Suppliers
and a nonmarket component: Activists
New entrants
Managerial aspects of European integration 3
● Market component: include the interactions
between firms, suppliers, and customers that are governed by markets and
contracts
● Nonmarket component: composed of the social, political and legal
arrangements that structure interactions outside of (but in conjunction with)
markets and contracts (ex. regulations, laws ..)
Effective management in the market and nonmarket environment is necessary for
superior performance, especially for firms that do business in the European Union. Firms
need to understand both to have a good strategy.
WhyWhy
is isthe EUimportant
the EU important Whyfor
for managers?managers?
is the EU important forWhy
(2) managers? (1) important for managers? (3)
is the EU
EU is a legislative machine
Managerial aspects of European integration 10 Managerial aspects of European integration 11
Managerial aspects of European integration 9
The EU is constantly making new laws and regulations. It produces regulations that
influence which products are built and how business is conducted, not just in the EU but
everywhere in the world. This way the EU has significant power to affect global markets
through its ability to set standards in competition policy, environmental protection, food
safety, protection of privacy …
4
