The Cornerstone of Europe
2023 marks the 30th anniversary of not only of the European Union (EU), but also of the Single Market. Launched in 1985, the 1992 Program to complete an internal market worked to remove all legislative barriers to trade so that goods, services, capital, and people could move freely between member states. On that "cornerstone," Commission President Jacques Delors (1985-1995) argued, the European Economic Community (EEC) of the twentieth century could become a Union fit for the twenty-first, complete with a common currency by the turn of the millennium. And as the Brexit referendum and its aftermath showed, the market remains one of the most important aspects of regional integration for supporters and detractors alike.
But the centrality of the market to the European project has also fueled Euroscepticism. Already, the fact that the EEC emerged as the leading regional organization amid the multiplicity of postwar "Europes" revealed the primacy of trade over other cooperation objectives – like the Council of Europe's mission to defend human rights or the collective security promise of the Western European Union. In the context of widespread liberalization in the 1980s, the Single Market Program looked to its critics like an effort to encase the market in supranational institutions, insulated from democratic accountability. For skeptics, business efforts to influence market policymaking seemed to confirm their concerns that the integrity of Europe's market foundations had been compromised by corporate interests.
Until now, answering questions about business influence in the making of the Single Market has been hindered by archival rules, which typically seal sensitive documents for 30 years. As of this year, though, it is possible to consult the corporate and institutional records required to answer questions about the past, present, and possible futures of the EU and its market. These newly available sources have enabled me to reconstruct the Single Market Program through the lens of European business and connect the market's historical origins to contemporary debates about reforming the democratic deficit, remedying socioeconomic inequality, and regulating corporations. This research has revealed three things about business and the Single Market.
First, while more work is needed to democratize governance in the EU, firms and business associations often struggled to influence policymaking for the internal market. As with all social groups, interest associations suffered from fragmentation and coordination problems. Some individual chairmen were able to leverage their personal contacts in Brussels, and policymakers in the Commission did solicit input from industry groups in their attempts to create a market that would increase the global competitiveness of European business. But overall, business interests exerted less direct influence on market policymaking than we might expect.
Big businesses did play a considerable role in shaping the Single Market by other means, however. Multinational corporations were particularly well-positioned to benefit from regional economies of scale, and by Europeanizing, they integrated subsidiaries into their supply chains and developed region-wide standards for goods and services. They also facilitated valuable technology and capital transfers as they invested across member-state borders. But revenues, earned in part by exploiting wage level differences between countries, were often repatriated to home country headquarters, typically in Northwestern Europe, thereby exacerbating regional inequality.
Finally, European corporations valued the certainty of clear regulation. In fact, some automakers appealed to the Commission for stricter emissions standards in the 1980s to align European norms with those of international markets and to enable manufacturers to plan production farther in advance. This history offers lessons for the EU's governance of the green transition and its efforts to achieve a more humane social market economy in the wake of recent crises and in response to critics: the promise of certainty can motivate even businesses to advocate for more regulation.